Case: R. Santhankumar Nadar Vs. Indian Bank Ltd., Madras &amp; Ors

2. The owners of the property situate in the City of Madras created a mortgage over it in 1944 in favour of one Jagmohan Prasad Bhatta with power to him to sell the mortgaged property without the intervention of the Court. On April 22, 1950 the appellant before us purchased a small portion of the property from the mortagagors the vendors covenanting to get the property mentioned in the schedule to the document released from the mortgages mentioned within a period of one year, in default whereof the vendee was to be at liberty to enforce his rights to compel the vendors to do so in appropriate proceedings and the vendors agreed to indemnify the purchaser for all such expenses and damages. The original mortgagee died on March 14, 1950 leaving a will and bequeathing the entire property in equal shares to several persons. The executor to the will of the deceased executed a deed of transfer in favour of the said legatees on May 14, 1951. The legatees executed a general power of attorney in favour of one Gangadhar Bhatta, the 8th defendant conferring on him all powers including the power to realise the amounts due under the mortgage, dated September 21, 1944 and to take other necessary steps. On May 28, 1952 a notice was issued in terms of the mortgage-deed under S. 69 of the Transfer of Property Act. There is no dispute that it was not served on the appellant. The sale was widely advertised and was adjourned from time to time till April 26, 1953 when the property was purchased by the 1st respondent, the Indian Bank Ltd., for a sum of Rs. 1,12,500. The sale-deed in favour of the bank was executed on July 4, 1953. The bank filed a suit on April 26, 1954 praying for vacant possession of portions of the property, decree for mesne profits against some of the defendants and other reliefs. Before the learned single Judge of the Madras High Court who heard the suit it was contended on behalf of the present appellant that the sale was invalid in the absence of notice thereof to him. The learned Judge turned down the contention that the sale was fraudulent as alleged by the appellant. He also rejected the contention put forward on behalf of the appellant that he was a bona fide purchaser within the meaning of S. 51 of the Transfer of Property Act and as such entitled to the improvements effected by him, namely, the cost of erecting the structures he had put up thereon. The appellant filed an appeal before the High Court of Madras alleging identical grounds in appeal. After losing in the High Court, the appellant applied for special leave to this Court which was granted raising six grounds his petition. By his statement of case filed in this Court, the appellant sought to contend that the provisions of S. 69 of the Transfer of Property Act allowing the exercise of the power of sale after notice to any one of the mortgagors offended Arts. 19 and 14 of the Constitution and as such were liable to be struck down. In Para. 2 of his written statement he had raised the plea that the power of sale in terms of S. 69 of the. Transfer of Property Act was ultra vires the Constitution of India as being discriminatory and opposed to the fundamental rights of citizens. Apparently the plea was abandoned at the hearing because no issue was raised thereon at the trial of the suit or in appeal to Division Bench.

Court's reasoning:
3. The point that the sale under the provisions of the mortgage-deed was invalid because of want of notice to the 16th defendant is not one of substanceThe language of this sub-section is clear and unambiguous. The section lays down in no uncertain terms that the requisite notice may be given to the mortgagor or one of several mortgagors where there is a number of them, the obvious idea being that the mortgagor who is given the notice is constituted the agent of the other mortgagors to receive the same. It may be hard on a person in the position of a mortgagor to get no notice under this section if he comes to learn that the property has been sold without any notice to him. But if there has been no fraud or collusion in the matter, he has no cause for complaintThis contention cannot be accepted. It will be noticed that in the Bombay case there was no reference to S. 69 of the Transfer of Property Act or the powers of the mortgagee thereunder. Moreover, the mortgage-deed in that case expressly provided for notice being given to the mortgagors or their assigns. In the present case, the mortgagors had not parted will their entire interest in the property. At best the appellant stood in the shoes of the mortgagors with respect to a portion of the property. He knew of the power of sale contained in the mortgage-deed and that is why he wanted to safeguard himself against such sale by insertion of a clause for indemnityIn our opinion, that section can have no manner of application to the facts of this case. Under that section, a transferee of immovable property making any improvement therein, believing in good faith that he is absolutely entitled thereto has a right to require the person subsequently evicting him therefrom on the strength of a better title, to have the value of the improvement estimated and paid or secured to him or to purchase his interest in the property at the then market value there of. In this case there can be no question of the appellant believing that he was absolutely entitled to the property. He knew that he was purchasing a small portion of it and that his vendors stood to lose the property unless they paid up the mortgage money on receipt of notice from the mortgagee. As already mentioned, the appellant wanted to safe guard himself against such an eventuality by the insertion of a clause in his deed of sale and the Court directed the setting apart of Rs. 9,000 from out of the sale proceeds for the purpose. We do not think that the case referred to by the learned counsel Narayana Rao v. Basavarayappa, AIR 1956 SC 727  , has any application to the facts of this case.