Case: K. Muthuswami Gounder Vs. N. Palaniappa Gounder

the respondent could contend that the appellant could not claim to be a puisne mortgagee as no charge arises from Ex. A-6. In that event it cannot be said that there is any inconsistency in the stand of the respondent. Therefore, we find that there is no merit in the contention of the appellant and the same is rejected. 11. Shri Parasaran next contended that on a proper interpretation, the document Exhibit A-6 in O.S. 108/50 dated 12.4.1950 creates a charge over property; that the language of the document made it clear that it was offered by way of security to the Court and a document executed in favour of the court under the orders of the Court should be given equal efficacy as a security bond and such a document creates a charge by operation of law. 12. In reply Shri Sanghi submitted that what was granted by Exhibit A-6 was only an undertaking, which would not amount to a charge. 13. The deed of security executed in the case in O.S. No. 108 of 1950 between Messrs Sandanam Mudaliar & Co. v. Ganesan Pillai reads as follows :- "Deed of security executed this the 12th day of April, 1950 in favour of Coimbatore Sub Court by M. Ganasan son of Magudapathi Gounder, Businessman & Agriculturist residing at Gowripuram, Karur Taluk Dt. The aforesaid plaintiff A.M. Sundara Mudaliar has filed the suit against me for recovery of Rs. 6,493.13 Annas with subsequent interest and costs. He has also obtained an order for attachment before judgment of the monies payable to me from South Indian Railway. In order to vacate the aforesaid order for attachment before judgment I have filed an application I.A. No. 811 of 1950 in the said suit O.S. 108 of 1950. As per the order of this Honble High Court I have executed this deed of security in the sum of Rs. 7,000/- and subsequent interest and cost over my self acquired properties in my possession and properties which are nanja lands and are described in the schedule. In the event of a decree being passed in the suit I will not alienate the properties till the decree is discharged. The properties set out hereunder belong to me under the right of purchase dated 14.10.46. There is already a prior mortgage over the properties for a sum of Rs. 3,000/- in favour of one Viravan Chettiar. These properties are capable of being plotted into house sites and therefore their present value is about Rs. 15,000/-. I hereby affirm that there is no kind of encumbrance whatsoever over the properties except the one mentioned above." A perusal of this document will indicate that there was an attachment before judgment for money payable to Ganesan by South Indian Railway and those monies stood attached to satisfy the decree to be passed in the said O.S. No. 108 of 1950. An application was filed by Ganesan to vacate the order of attachment in I.A. No. 811 of 1950 in O.S. No 108 of 1950. In compliance with the order of the Court he had executed a deed of security for a sum of Rs. 7,000/- and subsequent interest and costs over his self acquired properties in his possession described in the schedule. He stated that in the event of a decree being passed in the suit, he will not alienate the properties till the decree is discharged and, therefore, he describes the prior encumbrances in respect of the properties as on the date of the execution of the security bond. A charge is an obligation to make payment out of the property specified. In the present case there is no clear recital in the document of having created an obligation to make payment of the decretal amount out of the property in question. 14. The document Exhibit A-6 Security Bond does not in substance offer suit property by way of security. Even giving the most liberal construction to the document we cannot say that a charge as such has been created in respect of the suit property for money to be decreed in the suit. All that it states is that in the event of decrees being passed not to alienate the property till the decree is discharged, which is a mere undertaking without creating a charge. Therefore, we agree with the finding of the High Court that the document at Exhibit A-6 is not a charge. If that is so the suit filed by the appellant has got to be dismissed.15. There is yet another reason as to why the High Court held that the appellant cannot claim any rights under Exhibit A.6 the alleged Security Bond executed in O.S. 108/50. The decree obtained in that suit was a simple money decree and not a decree on a charge or mortgage with the result the appellant who purchased the property in execution of that decree did not acquire the rights under the said document Ex. A.6. This finding appears to be correct. The decree holder sought to execute the decree in E.P. 305/62 to order sale of the suit property stating that the same is secured in the bond Ex. P.6. However, the executing court did not proceed on that basis and raised objections thereto. Thereafter, the decree holder sought for attachment of the suit property independent of the so-called charge under Ex. A.6. If really the decree holder in the proceedings wanted to proceed on the basis of the security arising out of charge under Ex. A.6., the requirement of attachment was superfluous. Whether the claim under Ex. A.6 arising out of charge was given up or not, what was pursued in the execution proceeding was only to attach the suit property without recourse to charge under Ex. A.6. Therefore, the appellant could not have acquired any rights of mortgagee under Ex A.6, the security bond. For this reason also appellants suit is liable to be dismissed and the finding of the High Court, therefore, stands affirmed.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14. The document ExhibitSecurity Bond does not in substance offer suit property by way of security. Even giving the most liberal construction to the document we cannot say that a charge as such has been created in respect of the suit property for money to be decreed in the suit. All that it states is that in the event of decrees being passed not to alienate the property till the decree is discharged, which is a mere undertaking without creating a charge. Therefore, we agree with the finding of the High Court that the document at Exhibitis not a charge. If that is so the suit filed by the appellant has got to be dismissed.15. There is yet another reason as to why the High Court held that the appellant cannot claim any rights under Exhibit A.6 the alleged Security Bond executed in O.S. 108/50. The decree obtained in that suit was a simple money decree and not a decree on a charge or mortgage with the result the appellant who purchased the property in execution of that decree did not acquire the rights under the said document Ex. A.6. This finding appears to be correct. The decree holder sought to execute the decree in E.P. 305/62 to order sale of the suit property stating that the same is secured in the bond Ex. P.6. However, the executing court did not proceed on that basis and raised objections thereto. Thereafter, the decree holder sought for attachment of the suit property independent of thecharge under Ex. A.6. If really the decree holder in the proceedings wanted to proceed on the basis of the security arising out of charge under Ex. A.6., the requirement of attachment was superfluous. Whether the claim under Ex. A.6 arising out of charge was given up or not, what was pursued in the execution proceeding was only to attach the suit property without recourse to charge under Ex. A.6. Therefore, the appellant could not have acquired any rights of mortgagee under Ex A.6, the security bond. For this reason also appellants suit is liable to be dismissed and the finding of the High Court, therefore, stands affirmed.