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Judgment
Vithayathil, J.—The Plaintiff is the Appellant. The suit is for recovery of property. The plaint property belonged to the tar wad of the Plaintiff. A member of the tarwad instituted O.S. No. 100 of 1102 of the Nagercoil District Court for partition of the, tarwad properties including the property.
The karnavan of the tarwad was one Narayana Pillai, the father of the Defendants. He claimed value of improvements effected by him in the tarwad properties. The suit was compromised between the parties, and Ext. A, compromise petition was filed in Court on 15-8-1110. (Jude: the compromise the plaint property was allotted to the Plaintiff''s branch. It was provided in the com promise that for the amount agreed to be paid to Narayana Pillai as value of improvements, various branches of the tarwad should pay him particular amounts within a period of four years and recover the properties included in R schedule and allotted to their respective shares from Narayana falling which he was to become the full owner of those properties. The decree was passed in of the compromise. Exhibit I is the cop of the decree.
Narayana Pillai was, in possession of the plaint property till he died and after his death the Defendants are in, possession. In the partition in the Plaintiff''s branch Plaintiff got full right to the plaint property. The present suit was ''filed on 21-3-1121 for recovery of possession of the property on payment of the, value of improvements the Plaintiff''s branch was liable to pay under the compromise i.e. Rs. 1764 Chs. 24. It is alleged that the provision in Ext. A to the effect that Narayana Pillai would acquire full title to the property if the value of improvements due to him was not paid within 4 years from the date of the compromise is invalid and that the Plaintiff has got subsisting title to the property.
The main contention of the Defendants is that the Plaintiff''s title to the plaint property has been lost by reason of the non-payment of the value of improvements to, Narayana Pillai within the period stipulated in the compromise and that the suit is therefore not maintainable. It is also contended that the suit is barred by limitation, estoppel and res judicata and that the Plaintiff''s branch tarwad has relinquished its right to the: suit property.
The Defendants have also claimed the value of improvements effected in the property after the date of the is allowed to recover possession of the property. The amount payable by the, Plaintiff''s branch as value of improvements to Narayana Pillai was hot paid within the stipulated time or has it been deposited, in Court. The Court below held that the, agreement contained in Ex. A to the effect that Narayana, Pillai would acquire full title to the property if the value of improvements, due to him is not paid within four years is a valid agreement and that therefore the Plaintiff''s branch has lost its title to the plaint property. The suit was therefore dismissed with costs.
The main ground urged in. the appeal is that the agreement in Ex. A to the effect that Narayana Pillai would acquire title to the plaint property on default by the Plaintiff''s branch to pay the value of improvements, due to him, is illegal being a clog on the equity of redemption. According to the Appellant his right to redeem the property within the period allowed by law cannot be affected by that agreement.
In the Court below the Plaintiff, relied on the decision if a Pull Bench of the erstwhile Travancore High Court reported in- ''Velandi Vadhyar v. Sankara Pandia Mudaliar'' 1943 Trav. L.R. 425 (FB) (A) for the position, that the agreement is invalied being dog on the equity of redemption.
That was a case in which it was stipulated in a hypothecation bond that if the amount covered by the bond was not paid within a certain date it would be open to the hypothecatec to treat the document as a sale and to take possession of the properties included in the hypothecation the consideration for the sale being the amount payable under the bond. On failure by the hypothecator to pay the amount within the stipulated time the hypothecates (sic) to recover possession of the properties. It was hold by the full bench that the provision In the document was a dog on the enquity of redemption and was therefore invalid the Court below was of opinion that this ruling would not apply to (sic) facts of this case. According to the learned judge this is a case of a usufructuary mortgage where ''1943 Trav. L.R. 425 (A) related to a hypothecation.
After the decision of this case by the district Court the question whether the rule relating to dog on the equity of redemption would apply to a usufructuary mortgage came up for consideration before a Full Bench of the Travancore High Court in - ''Padmanabha Pillai v. Umamtifceswata Iyer'' 1948 Trav. L.R. 556 (B). it was held in that case that
in the case of possessory mortgages as in the case of simple hypothecations, a simultaneous clog on the equity which absolutely prevent redemption or materially impairs the right under the principle of Section 60, (British Indian T.P. Act cannot be given effect to and must be relieved against.
We find no reason why we should not follow this decision of the Travancore High Court.
It was, however, argued for the Respondents that the provision, in Ex. A does not am6unt to creating a mortgage in favour of the father of the Defendants. Under Ex. A the different branches of the tarwad had to pay particular amounts to Narayana Pillai as value of improvements due to him and he was allowed to be in possession of R schedule properties including the plaint property till he was paid those amounts. If the amount payable by each branch was not paid within 4 years, the right to recover possession of the property allotted to the share of that branch would be forfeited and Narayana Pillai would acquire full right to the same. This provision amounts to creating a usufructuary mortgage as defined in Section 58(d), T.P. Act in favour of Narayana Pillai in respect of the properties included in R schedule.
A mortgage need not necessarily be for the purpose of securing payment of money advanced as a loan. It may be for securing "performance of an engagement which may give rise to a pecuniary liability". When the mortgagor authorises the mortgagee to retain possession of the property until payment of the mortgage money the transaction amounts to a usufructuary mortgage.
The Court below also took the view that the transaction in question is a usufructuary mortgage. In - ''Muhammad Sher Khan v. Swami Dayal AIR 1922 P.C. 17 (C)the Privy Council held that the principle relating to clog on the equity of redemption embodied in Section 60, T.P. Act, would apply even to anomalous mortgages. We are therefore. of opinion that the principle laid down in � 1948 Trav. L.R. 556 (B)'' applies to this case and that the agreement in Ext. A is a clog on the equity of redemption and that it is therefore invalid.
It was next argued for the Respondents that since the terms of the compromise Ex. A have merged in the decree passed,by the Court the matter is res judicata between the parties and that so long as the decree stands the Plaintiff is, bound by the terms thereof.
This question directly arose for consideration in - K. Ambu Nair Vs. E.C. Kelu Nair and Another, It was held in that case that an illegal term In an agreement consented to by parties and embodied in a consent decree does not make that term enforceable or a defence in a subsequent -suit. According to the learned Judges, the judgment obtained upon such a contract cannot .be of more validity than the invalid contract in which it is founded Their Lordships observed:
So far as the decrees founded in contracts are concerned it has always been held that the " Court can give relief in a separate suit or in execution proceedings where the terms of the Consent decree are against the provisions of any statute.
Reliance was placed on the decision of the Privy Council in - ''G.N.W. C. Rly. Co. v. Charlebois'' (1889) AQ 114 (E). In that case Lord Hobhouse observed:
It is quite clear that a company cannot do what is beyond its legal powers by simply going into Court and consenting to a decree which orders that the thing shall be done.
Reference was also made to the decision in - ''Lakshmanaswami Naidu v. Ransamma'' 26 Mad. 31 (F) in which case it was held that if the terms of a contract which are opposed to public policy are embodied in a compromise decree, those terms could not be enforced.
To the same effect are the decisions in -''Nagappa v. Venkata Rao'' 24 Mad. 265 (G); ''Kusadhaj Bhakta v. Brojamohan'' AIR 1916 Cal 816 (H) ''Mira Moti. Ju Deo v. Mt. Janki'' AIR 1926 Nag 20 (I) and - ''Sasadhar Ganguli v. Raghab Singh'' AIR 1930 Pat 234 (J)
In - ''Krishna Bai v. Had Govind'' AIR 31 Born 15 (K), Sir Lawrence Jenkins C.J. made the following observation:
It was laid down in - ''Wentworth v. Bullen'' (1829) 9 B and C 841 (L), and has since been repeatedly affirmed that the contract of the parties is not, the less a contract and subject to the incidents of a contract, because there is superadded a command of a judge." Beaman, J. observed thus in that case; "By private agreement converted into a decree, parties cannot empower themselves to do that which they could not have done by private agreement alone.
In - Budhu Ahir Vs. Emperor, Mukerji, C.J. quoted with approval the observation of Kay, L.J. in - ''Hud- dersfield Banking and Co. v. Lister'' (1895) 2 Ch. 273 (N) that "a consent order is a mere creature of the agreement''. In - ''Thoma Cherian v. Oommen Thoma'' 26 Trav. L.J. 971 (Co the Travancore High Court held that a compromise decree may be treated as a contract between the parties with all the incidents of a contract and that it stands on no higher footing.
In the light of these rulings, there can be no, doubt that the provision in the compromise, decree relating to the forfeiture of the right of redemption does not cease to be a contract between the parties, even though it is embodied in the decree and that the decree is no bar to the parties to the contract contending that the agreement is illegal and unenforceable in law. All that the Court did in this case was to embody in the decree the terms of the compromise. There was no adjudication by the Court on the question whether the terms of the compromise are lawful or not. In the circumstances, we are of opinion that Ex. I decree does not operate as res judicata between the parties, so far as this question is concerned.
It was next argued for the Respondents that the Plaintiff has relinquished his right to the property by reason of his agreeing to mutation being effected by the revenue authorities on the application of the Defendants. We'' do not think that mere omission on the part of the Plaintiff to object to mutation-being effected in the revenue records on the application of the Defendants, will amount to a relinquishment by the Plaintiff of his title to the plaint property.
A similar contention was raised in - ''1948 Trav. L.R. 556 (B) also and it was repelled by their Lordships who held on the authority of the decision in. - Ram Singh and Others Vs. Baij Nath and Others, that
a mere admission by the mortgagor or understanding between him and the mortgagee that the mortgagee has become the owner of the property cannot extinguish the mortgage or destroy the right of redemption
We, therefore, hold that the Plaintiff''s right to re-deem the property subsisting and that, the suit is maintainable.
The Defendants have, claimed the value of improvements effected by them after the date of the compromise decree. The Court, below found that the value of such improvements is, Rs. 427 Chs. 4. Neither side has objected to that finding. We are of opinion that the Defendants are entitled to this amount over and above the ''Sum of Rs. 1767 Chs. 24 payable by the Plaintiff''s branch under the terms of the compromise Ex. ''A.''
The Plaintiff will be ''entitled to mesne profits only from the date of deposit of both these amounts. The rate of mesne profits will be Rs. 150 per annum as found by the Court below.
In the result we set aside the decree i-of the Court below and allow the Plaintiff to recover possession of the plaint property on deposit of T. Rs. 2195.
The Plaintiff will be entitled to mesne profits at the rate of Rs. 150 per annum after deposit of the amount mentioned above, with notice to the Defendants until recovery of possession of the, property or until the expiration of three years whichever event happens earlier.
The parties will bear their respective costs'' in the Court below. The Plaintiff will get his costs in this Court from the Defendants.
The appeal is allowed in the manner stated above.