Madras High CourtS. Srinivasa Aiyangar And Ors. vs Radhakrishna Pillai on 12 November, 1913Equivalent citations: (1914) 26 MLJ 47Author: S AiyarJUDGMENT Sadasiva Aiyar, J.

1. This is an appeal against an Order of remand. The appellants are the defendants.

2. The plaintiff sued for redemption of a mortgage created in 1884. This mortgage document(Exhibit A) begins by calling itself a usufructuary mortgage and in two or three places in the courseof the deed, it is expressly called a usufructuary mortgage deed. It, however, contains a clause that ifthe mortgage amount was not paid on a date which is stipulated in the document at an interval ofexactly nine years from the date of the document the mortgage was to work itself out as a sale for theprincipal ' amount due on the mortgage bond. Possession was given to the mortgagee in accordancewith the nature of the document and its spirit. At the end, there is a covenant to this effect. " I, themortgagor, shall pay to you the costs of the construction of earth work . etc., on the date fixed forredemption as per your accounts along with the mortgage money."

3. The question is, what is the nature of this document? It is contended by the appellant's learnedVakil that this is a combination of three kinds of mortgages, a simple mortgage, a usufructuarymortgage and a mortgage by a conditional sale. The plaintiff's contention, on the other hand, is thatit is a usufructuary mortgage with a covenant at the end clogging the equity of redemption. I aminclined to think that it is a combination of a simple mortgage and a usufructuary mortgage with acovenant clogging the equity of redemption. I think it cannot be called a mortgage by a conditionalsale, as it was executed after the Transfer of Property Act came into force, and it does not comewithin the definition of a mortgage by a conditional sale found in Section 58 Clause (c) of theTransfer of Property Act. There is no ostensible sale of the mortgaged property on the date of thedocument. It is what was known as the Hindu form of a mortgage by a conditional sale before theTransfer of Property Act was enacted ; but it seems to me that the definition given in Section 58Clause (c) of the Act was expressly framed so as to exclude this Hindu form of mortgage byconditional sale from the definition of mortgage by conditional sale in the Transfer of Property Act,That Hindu form of mortgage by conditional sale which began as a mortgage and worked itself outas a sale on breach of certain conditions by the mortgagor formed the subject of several decisions ofthe High Courts and the Privy Council, and because much confusion resulted from conflicts betweenthose decisions, their Lordships of the Privy Council expressly stated in Thumbusatni Moodely v.Hussain Rowthen (1875) I.L.R. 1 M. 23. "An Act" of the Legislature " affirming the right of themortgagor to redeem until foreclosure by a judicial proceeding, and giving to the mortgagee themeans of obtaining such a foreclosure, with a, reservation in favour of mortgagees whose titles,under the law as understood before 1858, had become absolute before a date to be fixed by the Act,would probably settle the law without injustice to any party." I think that the Transfer of PropertyAct, so far as the Hindu form of mortgage by conditional sale was concerned, treated it as amortgage either simple or usufructuary according to its terms and treated the condition as to itsafterwards working out as a sale as not enforceable by enacting Section 60 in the Act which gives tomortgagors generally a right to redeem. A mortgage deed which begins as a mortgage transaction

S. Srinivasa Aiyangar And Ors. vs Radhakrishna Pillai on 12 November, 1913

Indian Kanoon - http://indiankanoon.org/doc/1245838/ 1

cannot, in my opinion, be called a mortgage by conditional sale, though it is a mortgage which givesthe mortgagee after a certain time and on breach of certain conditions by the mortgagor a right toclaim a title as vendee. It is a mortgage with a clause providing for a future conditional sale and nota mortgage by means of a present sale transaction.

4. If, then, this document is not a mortgage by conditional sale it is clearly a usufructuary mortgageaccording to the definition in Section 58 Clause (d) of the Transfer of Property Act. I think, that asthere is the covenant at the end by the mortgagor which expressly says, " I shall pay some moniesalong with the mortgage money on the date of redemption" the document might according to itsliteral construction be treated as containing a personal covenant to pay the mortgage money; andfollowing Rama Brahmam v. Venkata-narasa Pantulu (1912) 23 M.L.J. 131 I would hold that, owingto the existence of that covenant, it is also a simple mortgage. Hence the document becomes acombination of a simple and usufructuary mortgage.

5. It was next contended that even a combination of a simple and a usufructuary mortgage is ananomalous mortgage under the definition of Section 98 of the Transfer of Property Act. That sectionis as follows: " In the case of a mortgage not being a simple mortgage or a mortgage by conditionalsale, an usufructuary mortgage an English mortgage or a combination of the first and third, or thesecond and third, of such forms; the rights and liabilities of the parties shall be determined by theircontract as evidenced in the mortgage deed, and so far as such contract does not extend, by localusage." The construction sought to be put by the appellant's learned Vakil upon this section is thatthe words " in the case of a mortgage being" should be understood before the words, "a combinationof the first and third." I do not think that this is a reasonable construction of the section. I think themeaning is " or in the case of a mortgage not being a combination etc."

6. Reliance was placed upon the decision in Amarchand v. Kilamorar (1903) I.L.R. 27 B.600. In thatcase the respondent was not represented, and I think that that case was wrongly decided. Referencewas also made to Ramayya v. Guruva (1890) I.L.R. 14 M. 232. No doubt there is an observation inthat case that the Subordinate Judge who decided the case in the Lower Court treated the mortgagein question in that case as an anamolous mortgage; but I do not think that the learned judges of thisCourt intended to state that that opinion of the Subordinate Judge was correct. Again, reference wasmade to Ammanna v. Gurumurthi (1892) I.L.R. 16 M. 64. There is an observation there that thetransaction evidenced by the document in question in that case was a mortgage by way ofconditional sale as defined in Section 58, Clause (c) of Act IV of 1882. That observation was notnecessary for the decision in that case, and with the greatest respect I dissent from that observation,though it seems to be accepted without criticism by Shephard and Brown (Page 238) and by Gour(paragraph 1044) in their Commentaries on the Transfer of Property Act. In the result I hold thatthe mortgage deed in this case is not an anamolous mortgage as defined in Section 98 of theTransfer of Property Act, but it is a combination of a simple mortgage and an usufructuary mortgageand hence that it is redeemable. That in the case of such a mortgage, the provisions of Section 60would apply seems to me to be clear from the observations in p. 707 of Macpherson in his book onthe Law of Mortgage. The case in Perayya v. Venkata (1888) I.L.R. 11 M. 403 also shows that theright of redemption is not extinguished by the existence of a covenant at the end of the mortgagedeed similar to the terms given in the present mortgage deed. See also Ankimer v. Subbiah (1911)

S. Srinivasa Aiyangar And Ors. vs Radhakrishna Pillai on 12 November, 1913

Indian Kanoon - http://indiankanoon.org/doc/1245838/ 2

I.L.R. 35 M. 744 where even less onerous terms were held not to destroy the right of redemption.

7. In this view, it is not necessary for me to consider the question whether the learned District Judgewas right in his view that, even if it was an anamolous mortgage, Section 60 of the Transfer ofProperty Act would allow the mortgagor to redeem the mortgage and that the terms of Section 98should be read subject to the provisions of Section 60 and other sections of the Transfer of PropertyAct; I need only, say that I would find it very difficult to hold that the express terms of Section 98which are intended to apply specially to anamolous mortgages can be controlled by the provisions ofprevious sections of the Act which deal with other matters.

8. In the result I would dismiss the appeal with costs.

Spencer, J.

9. I agree with my learned brother in the interpretation he has put on Section 98 of the Transfer ofProperty Act. I find it quite impossible to read the words " or a combination of the first and third, orthe second and third, of such forms" as not being governed by the negative which comes at thebeginning of the sentence. If a different construction is to be put upon this section it would benecessary to imply the words "in the case of" between the words " or" and "a combination" etc. Thiswould be a violation of the meaning of the plain English of the sentence. I am unable to follow thestatement of the learned Judges who decided Amarchand v. Kilamorar (1903) I.L.R. 27 B. 600 that acombination of a simple mortgage and a usufructuary mortgage is an anamolous mortgageprovided, for by Section 98. Mr. Gour in paragraph 1603 of his book on the Law of Transfer inBritish India treats this statement as an oversight and in paragraph 1606 speaks of there being sixand only six forms of mortgages eliminated by this section from the category of anamolousmortgages.

10. As regards the mortgage deed Ex. A, as I read the document I am inclined to treat it as either ausufructuary mortgage deed with a clause containing a clog on the equity of redemption, or ausufructuary mortgage deed combined with a mortgage by conditional sale. In either case, it will besubject to the conditions of Section 60 of the Transfer of Property Act, and no act of the parties otherthan a transaction outside the mortgage deed itself will extinguish the right of redemption. VidePerayya v. Venkata (1888) I.L.R. 11 M. 403.

11. The words which provide for the payment of repairs, improvements etc., along with the mortgagemoney are evidently intended to take effect in the event of the mortgage being redeemed. I do notconsider that they constitute a personal undertaking to pay, nor are there any other words in thisdocument which can be construed as a personal covenant, express or implied to pay the mortgagemoney. Compare Gopalasami v. Arunachella (1892) I.L.R. 15 M. 304. In this respect this case maybe distinguishable from that of Kangayya Gurukkal v. Kalimuthu Annavi (1903) I.L.R. 27 M. 526, inwhich a personal promise to pay was contained in the words " We shall cause Rs. 200 to be paid andwe shall redeem our land."

S. Srinivasa Aiyangar And Ors. vs Radhakrishna Pillai on 12 November, 1913

Indian Kanoon - http://indiankanoon.org/doc/1245838/ 3

12. If Section 58 Clause (c) of the Transfer of Property Act is to be read strictly, it is necessary thatthere should be an ostensible sale of the mortgaged property to constitute a mortgage by conditionalsale. There are no words in Ex. A which by themselves create a sale; but the document implies that,if payment is not made by the stipulated date, the property shall be held and enjoyed by themortgage as if he had obtained it by absolute sale. In some cases, such words have been treated as amortgage usufructuary by conditional sale. Instances are given in paragraph 1605, p. 1025 of of Mr.Gour's book. The next paragraph describes anamolous mortgages.

13. In Tukaram v. Ramchand (1901) I.L.R. 26 B. 252, the document which passed the ownership ofthe property usufructuarily mortgaged in case of failure to pay the mortgage money on theprescr ibed date , was construed, as an anamolous mortgage . But in that case , theusufructuary-mortgage seems to have been combined with a lease and that may have led the learnedJudges to treat it as an anamolous mortgage. Whether the present document be treated as anusufructuary mortgage combined with a mortgage by conditional sale, as the Lower Appellate Courttreated it, or an usufructuary mortgage with a clog on the equity of redemption, in either case, theJudgment of the Lower Appellate Court will have to be upheld and this appeal dismissed with costs,and I therefore, agree in the order proposed by my learned brother.

S. Srinivasa Aiyangar And Ors. vs Radhakrishna Pillai on 12 November, 1913

Indian Kanoon - http://indiankanoon.org/doc/1245838/ 4