Rukkumani Ammal (died) and Another vs Kamachi Ammal

This appeal arises out of an obstruction offered by the appellant at the time of delivery to the respondent of certain property, in execution of a

mortgage decree. The appellant is a Court auction purchaser; that purchase was in execution of a simple money decree against the debtor. The

latter, an agriculturist entitled to the benefit of Act V of 1954 was indebted to a creditor under a promissory note of the year 1950. No suit coma

be filed against an agriculturist debtor during the time when Act V of 1954 and the Ordinance which preceded were in force. The prohibition

contained in those two enactments was in force from 6-12-1953 to 1-7-1955. The legislation also provided safeguards to the creditor who was

prevented from filing a suit for recovery of his dues. Section 6 which is one of these provisions says:

Effect of transfer of immovable property by debtor:--Every transfer of immovable property by a debtor entitled to the benefit of Section 3 or

Section 4, made after the commencement of the Ordinance and before the 1st of March 1955, shall, in any suit or other proceeding, with respect

to such transfer, be presumed, until the contrary is proven, to have been made with intent to defeat or delay the creditors of the transferor.

The creditor filed a suit; S. C. No. 296 of 1955, immediately after the expiry of that Act, obtained a decree, and, in execution of the same, brought

the property which forms We subject matter of this appeal, to sale. The appellant as said earlier, became the purchaser. That was on 21-7-1958.

The appellant also obtained possession of the property,

The debtor did not, however, conform to the terms of Section 6, which I have extracted above. He created a mortgage over the property on

21-7-1954, during the time when the said Act was in force. The mortgagee instituted O. S. No. 5 of 1957 on the basis of the mortgage and

obtained a decree. The decree was duly put in execution, and, in the sale that was held on 31-7-1958 the respondent a third party became the

purchaser. It will be noticed that the sale under the mortgage decree took place about a week after the sale in execution of the small cause simple

money decree referred to above.

Two matters have to be noticed now. (1) The mortgage was created by the debtor before the execution proceedings under the simple money

decree in S.C.S. No. 296 of 1955 were started. The mortgage was, however, contrary to the prohibition contained in Section 6 of Act V of 1954,

(2) The purchase by the appellant under the simple money decree was subsequent to the institution of the mortgage suit, which was made on 4-1-

1957. Normally, the Court-sale in favour of the appellant will not avail against the purchaser under the mortgage decree both by reason of the tact

that the title of the latter will go back to the date of the mortgage and also on the principle of lis pendens.

When the respondent sought delivery of possession of the property, obstruction was offered by the appellant. The application was, however,

dismissed by the trial court. On appeal by the respondent, the learned District Judge at Tiruchirapalli, allowed the appeal and directed the removal

of obstruction. In this second appeal against the order of the learned District Judge, two points have been urged: (1) that no appeal lay to the lower

appellate Court as the matter was one that came under Order 21 Rules 95 and 97, and not u/s 47 C.P.C. and (2) that the mortgage created at a

time when Act V of 1954 was in force, was invalid, and that therefore the respondent could derive no title by virtue of his purchase under a decree

passed on that mortgage.

There is no substance in the first point. The appellant, as the purchaser in execution of a money decree, will be a representative of the judgment

debtor. The respondent, on the other hand, as the purchaser of the same property in execution of a mortgage decree against the same debtor will

combine in himself not merely his interests but that of the mortgagee decreeholder as well. This question is now too well settled to require any

elaborate discussion. In AIR 1940 11 (Privy Council) the Privy Council has observed,

While the purchaser at an execution sale under a mere money decree gets no more than the right, title and interest of the judgment-debtor at the

date of the sale, the purchaser under a mortgage decree gets the right, title and interest in the mortgaged subjects which the mortgagor had at the

date of the mortgage and charged thereby. Buying the mortgaged property free from encumbrances he gets, as it is sometimes put, the title both the

mortgagee and of those interested in the equity of redemption. He is not a mere successor in interest of the owner of the equity of redemption at

the date of the sale.

Mr. Balasubramaniam, who appears for the appellant, brings to my attention the decision of a Bench of this Court in A. Mallari Rao Vs. Sivagnana

Vandayar, . In that case, there was a charge decree, in execution of which a stranger auction purchaser purchased the property, subject to the

charge. Resistance was offered to delivery of possession by a purchaser from the judgment-debtor. An application filed under Order 21 Rule 97

C.P.C. was dismissed. It was held that no appeal would lie, as the dispute between the rival purchasers was not coming within Section 47 C.P.C.

The learned Judges, dealing with this question observed,

But it is contended on behalf of the appellant that the present case is on a different footing from that of a money decree, as here the sale was in

execution of a charge decree which is as good as a mortgage decree, and that the stranger auction purchaser in respect of a mortgage decree

represents not only the mortgagors but also the mortgagee. No decision of this or any other Court has been cited in support of this contention, but

reliance has been placed on the following observation in the judgment of the latest Full Bench case referred to above. ....''''

The learned Judges have referred to the ruling in Thondam Annamalai Mudali Vs. Tiruttani Ramasami Mudali and Others, and held that it was not

decisive of the question. The decision of the Privy Council, to which I have made reference just now, was not brought to the notice of the learned

Judges. I am therefore very doubtful of the soundness of the observations contained in A. Mallari Rao Vs. Sivagnana Vandayar, . It follows that

the dispute in the present case between the purchaser in execution of a mortgage decree and the one who purchased in execution of a simple

money decree against the same debtor will come u/s 47 C.P.C. The appeal filed before the lower appellate Court was therefore competent.

The other contention relates to the validity of the Court sale in execution of the mortgage decree, the contention being that the mortgage was

invalid, as it was contrary to the prohibition implicit in Section 6 of Madras Act v of 1954. The section does not by itself invalidate any alienation of

a debtor during, the period when the Act was in force. It only enacts a presumption--and that, a rebuttable resumption that, if the question of the

validity of an ilienation by an agriculturist-debtor arises in any proceeding with respect to that alienation, it shall be presumed to have been made

with an intent to defeat and delay the creditors. Prima facie, an alienation made by an agriculturist during the currency of that statute will

undoubtedly be valid as between the parties to it. It will not be open to the judgment debtor to say, for example, that the alienation is invalid u/s 6

and that therefore he will not be bound by it. The appellant who is only a representative of the judgment debtor cannot likewise contest the validity

of the alienation. Apart from that circumstance, Section 6 would only enable the creditor defeated, delayed or defrauded to cancel the alienation

u/s 53 of the Transfer of Property Act. He can also rely upon it as an act of insolvency if other conditions are satisfied. Except for this, any

alienation made by an agriculturist debtor will be valid until it is avoided. Under the section, the burden will be on the debtor to prove that the

alienation was not made with a view to defeat or delay the creditors. The occasion for applying the rule will arise duly when there is a suit or

proceeding with respect to the alienation. In other words the validity of the alienation should directly arise for consideration therein. In the present

case, there is no proceeding in which the mortgage is in question. As I stated earlier, the appellant has not attacked the validity of the mortgage in

favour of the respondent''s predeuessor-in-title in any legal proceeding. He only seeks now to raise the question in execution of that decree that, as

the mortgage contravened the provisions of Section 6 referred to above, the decree that followed should be held to be void. That however cannot

be done. Even applying the section it can only mean that the mortgage was intended to detect and delay creditors: that will be no answer to

proceedings in execution of the mortgage decree. I am therefore of opinion that the mortgage sale in favour of the respondent is a valid one until

properly set aside and that the order of the lower appellate Court is correct.

The appeal fails and is dismissed with costs.