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M.C. CHAGANLAL SOWEAR V. P. ANANTARAMAN AND ANR

Chaganlal v. Anantaraman, AIR 1961 Mad 415

ISSUE:

  • Whether a mortgagee is entitled to treat interest due under a mortgage as a charge upon the mortgaged property in the absence of any contract to the contrary?

RULE:

  • Section 58(a) and 60 of the Transfer of Property Act.

FACTS:

  • The mortgage sought to be redeemed was executed on 20th March 1930 by the 2nd respondent and his undivided brother one Vaidyanathan, who died subsequently, for securing repayment of a sum of Rs. 2000 borrowed by them along with their uncle. On 5-3-1952 the second respondent sold the mortgaged property to the first respondent directing the latter to redeem the mortgage.
  • The first respondent offered to redeem the mortgage on payment of Rs. 2000, the principal amount, but the first defendant (appellant) refused the offer and insisted that besides the principal, the other sums including interest due under the provisions of the mortgage deed should also be paid before the mortgage could be redeemed.
  • Thereupon, the suit, O. S. No. 114 of 1952, was filed by the first respondent in the court of the District Munsit of Poonamallee.
  • The first respondent-plaintiff was entitled to the relief of redemption on payment of the principal sum of Rs. 2000 and as that sum has been deposited into court, he passed a preliminary decree for redemption. There was an appeal by the first defendant to the court of the District Judge of Chingleput.
  • The learned District Judge allowed the appeal and set aside the decree passed by the District Munsif and remitted the suit to the District Munsif for adjudication as to what would be the amount due to the mortgagee in the light of the observations made in his judgment.
  • The plaintiff would not be entitled to obtain redemption unless he paid also the other amounts including interest, which were payable under the deed of mortgage. Against the order of remand passed by the District Judge, there was an appeal to this court, C. M. A, No. 106 of 1956. Ramaswami Goundcr, J. allowed that appeal and restored the decree of the District Munsiff, but granted leave to appeal. Hence this appeal by the first defendant.

HELD:

  • The Madras High Court held that the construction placed on the material provisions of the mortgage deed by the learned District Judge was right and the learned Judge was wrong in holding that there was a contract contrary to the general rule that interest payable under a mortgage deed would also be charged to the mortgaged property and would be included in the mortgage money on payment of which alone the mortgagor would be entitled to obtain redemption of the mortgage.
  • The appeal was allowed and the order of the learned District Judge remitting the suit to the District Munsif for ascertaining the amount actually due under the mortgage is restored.