ORDER
Govardhan, J.
1. Plaintiffs are the appellants.
2. The averments in the plaint are as follows: The first plaintiff mortgaged the suit property belonging to the plaintiffs in favour of one Periyasami Servai on 7.11.1961 for a period of five years both on his behalf and on behalf of the plaintiffs 2 and 3.
3. The first defendant has got the mortgage made over to him on 28.9.1963. The first plaintiff had executed a second mortgage, for a sum of Rs. 3,000 for a period of eight years both on his behalf and on behalf of the other two plaintiffs on 13.4.1966. He had again executed a mortgage for Rs. 5,000/- for a period of 10 years. On 1.11.1969, he has received Rs. l 1,000 and executed the mortgage for 13 years. The period of mortgage expires by 1.11.1982. The plaintiffs have to pay Rs. 41,000 to the first defendant. The defendants 1 and 2 are entitled to half share in the mortgage as per the partition between them dated 6.12.1976. The plaintiff claimed the benefits under Act 40 of 1979 and issued a notice on 21.9.1981 stating that the mortgage has been discharged and requiring the defendants to deliver possession of the property. The first defendant has sent a reply with false averments. The allegation that the plaintiffs have executed an agreement of sale on 31.10.1982, in favour of the first defendant is not correct. The plaintiffs are prepared to pay the mortgage amount of Rs. 41,000 and redeem the mortgage. The defendants refused. The property yields an income of Rs. 2,000 per month. The plaintiffs are entitled to redeem the suit property. Hence the suit.
4. Defendants 1 and 2 in their written statement contend as follows: The allegation that the mortgage expires on 1.11.1982 and the plaintiffs have to pay Rs. 41,000 is correct. On 1.10.1975, the first plaintiff had executed an agreement of sale in favour of the first defendant and the first defendant is in possession and enjoyment of the property in that capacity. The sale price was fixed at Rs. l lakh. The first defendant has assured to pay Rs. 60,000 on the expiry of the mortgage period and have the sale deed. The first plaintiff agreed for the same and received Rs. 2,000 on a promissory note and executed the agreement of sale on 1.10.1975. The plaintiffs are therefore not entitled to redeem the mortgage. The first defendant was willing to have the sale deed as per the agreement. The plaintiff demanded a higher price for the property for which the first defendant did not agree. The first defendant had spent Rs. 17,000 for effecting repairs in the suit property which is in a dilapidated condition. The plaintiffs arc not entitled to the benefits of Act 40 of 1979. The income from the property is only Rs. 400 and not Rs. 2,000 as alleged. The suit is liable to be dismissed.
5. The plaintiffs have filed a reply statement reiterating their earlier stand.
6. Defendants 3 to 6 remained ex parte.
7. On the above pleadings, the trial Court has held that the first plaintiff had entered into an agreement of sale on 1.10.1975 with the first defendant and the plaintiffs and therefore arc not entitled to redeem the suit property and on those findings dismissed the suit.
8. Aggrieved over the same, the plaintiffs have come forward with this appeal.
9. The plaintiffs' suit for redemption has been dismissed by the trial Court on the ground that the plaintiffs' right to redeem the property mortgaged in favour of the first defendant for Rs. 41,000 has been lost by them as per the proviso to Section 60 of the Transfer of Property Act which is as follows:
' 60. Right of mortgager to redeem.- At any time after the principal money has become due, mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the mortgagee is in possession of the mortgaged property, to delivery possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:
Provided that the right covered by this section has not been extinguished by act of the parties or by decree of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption.
Nothing in this section shall be deemed to render invalid any provision to this effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.'
The learned Senior Counsel Mr. Chandramouli has argued that the respondents herein has contended that there is an agreement of sale executed by the first plaintiff in favour of the first defendant under Ex.B-4, which has been denied by the plaintiffs and which has/been upheld by the trial Court is in respect of an ancestral property of the first defendant as per the mortgage deed under Ex.A-1, whereas the agreement of sale under Ex.B-4 is said to have been executed only by the first plaintiff in favour of the first defendant and on the very same ground that the right conferred under Section 60 of the Transfer of Property Act on the mortgagors to redeem the property cannot be said to be extinguished, in view of the fact that the sons of the first plaintiff on whose behalf also, the mortgage has been created were not parties to the agreement of sale under Ex.B-4. According to the learned counsel, as per the agreement dated 1.10.1975 whose genuineness is disputed by the plaintiff, the sale deed has to be executed seven years later and the suit filed by the respondent for specific performance is pending and it has been stayed by an order of this Court in C.M.P.No.9471 of 1990 and the right of the plaintiffs in the said suit O.S. No. 218 of 1985 viz., the respondents herein for a decree for specific performance is to be considered by framing specific issues in that suit and they cannot be considered in this simple suit for redemption and suffice it to find out whether the plaintiffs' right to redeem the property mortgaged in favour of the first defendant has been extinguished, by virtue of the alleged agreement of sale said to have been executed by the first plaintiff alone, assuming that he is entitled to execute such an agreement.
10. The learned Senior Counsel Mr. E.P. Padmanabhan would on the other hand argue that it is not a case where the mortgagor and the mortgagee has novated the mortgage by subsequent arrangement i.e., no agreement between them. In order to appreciate the argument of the learned Senior Counsel appearing for the appellants that the plaintiffs' right to redeem the property has been lost by them by act of the parties. When the C.M.P. No. 9471 of 1990 was moved for stay of further proceedings in O.S. No. 218 of 1985, the learned Judge who has heard the same, has observed an follows: 'in view of the fact that there is finding in the judgment of the Court below to the effect that the agreement put forward by the respondents herein is true, the suit O.S. No. 218 of 1985 which is based on the said agreement has to be stayed till the disposal of the appeal. If the appeal is dismissed then the respondents herein will automatically succeed in the other suit O.S. No. 218 of 1985. If the appeal is allowed and the finding is vacated then what should be done will have to be decided in that suit. In the circumstances, interest of justice requires grant of stay as prayed for. Hence this petition is ordered.' This observation of the learned Judge is to the effect that stay has been granted only on account of the finding in the judgment of the trial Court to the effect that the agreement pet forward by the respondents is true. The learned counsel appearing for the appellants has argued that even if the agreement put forward by the respondents is true, the plaintiffs' right to redeem the property cannot be said to have been lost by them. Therefore, I am of opinion that we can decide this appeal as to whether the plaintiffs' right to redeem the property has been lost by them by virtue of the proviso to Section 60 of the Transfer of Property Act assuming that the agreement is true. As the learned Judge has observed in C.M.P.No.9471 of 1990, if this appeal is dismissed, the upholding the version of the respondents that the appellants have lost their rights to redeem the property everything comes to an end. On the other hand, if the appeal is allowed, upholding the case of the appellants that the plaintiffs' right to redeem the property has not been lost by them, by giving such a finding and the finding of the trial Court on this aspect being Vacated, the right of the respondents herein will be left over to be decided in O.S.No.218 of 1985 since it is the specific case of the appellants herein that even if the agreement under Ex.B-4 is valid, the plaintiffs cannot be said to have lost their right to redeem the property and the finding of the trial Court on that aspect has to be vacated and the appeal has to be allowed. Therefore, the ensuing discussion on the merits of this appeal, with regard to the right of the appellants who are mortgagors, to redeem the property mortgaged by them in favour of the first defendant is decided assuming the agreement under Ex.B-4 to be true and without going to the merits of that finding in the judgment of the trial Court.
11. The learned Senior Counsel Mr. Chandramouli has stressed that even if the agreement of sale under Ex.B-4 is true, right of the plaintiffs to redeem does not get extinguished and Ruling relied by the trial Court reported in Meenakshi Velu and Anr. v. Kasturi Sakunthala and Ors., I.L.R. (1967) Mad 161 has been over-ruled by the decision of the Supreme Court reported in Narandas Karsondas v. S.A. Kamtam and Anr., : [1977]2SCR341 and the plaintiffs have also deposited, the mortgage amount in the trial Court and therefore, the plaintiffs should succeed. The learned Senior Counsel Mr. E. Padmanabhan would on the other hand argue that proviso to Section 60 provides for extinguishment of the right of the mortgagor to redeem a mortgaged property and the said proviso is not exhaustive and if it is proved, that the debts are cleared, by virtue of the agreement under Ex. B-4 between the parties, it must be held that by virtue of the said agreement, the parties have agreed to extinguish the right of the plaintiffs for redemption.
12. The Supreme Court has held in the decision reported in Jayasingh v. Krishna, : AIR1985SC1646 as follows:
'The right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of the right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee who has entered into possession of the mortgaged property under a mortgage will have to give up possession of the property when a suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground. This flows from the legal principle which is applicable to all mortgages, namely 'Once a mortgage, always a mortgage.'
Let us decide the right of the appellants herein bearing the above principle adumberated by the Supreme Court referred above. In the decision reported in Meenakshi Velu and Anr. v. Kasturi Sakunthala and Ors., I.L.R. (1967) Mad. 161, a learned Judge of this Court has held that in a case where an auction sale of mortgaged property by mortgagee in exercise of power of sale conferred by a deed of mortgage, is hold mortgagor's right to redeem mortgage docs not survive after the exercise of powers of sale. The learned counsel appearing for the respondents who has relied upon the above decision, has also referred to the decisions reported in V. paily v. K Augusthy, A.I.R.1967 Ker. 247 and Anweerappa v. Shetty, : AIR1979AP156 and would argue that the decision reported in Meenakshi Velu and Anr. K. Kasthuri Sakunthala of others, I.L.R. 1967 Mad. 161 still holds good. In the decision reported in V. Pally v. K. Augusthy, A.I.R. 1967 Ker. 247, a Full Bench of the Kerala High Court has observed that, 'in the case where the mortgagor deposits the price of redemption fixed by the Court, the mortgage comes to an end. Section 60 of the Transfer of Property Act which provides for a right of mortgagor to redeem which affords the right of the mortgagor to redeem as a proviso which is to the effect that such a right is subsisting provided, the said right has not been extinguished by the act of parties or by a decree of a Court.' There is no dispute over this proposition. In the decision reported in V. Pa'Uv v. K. Augusthy, A.I.R.1967 Ker. 247 the Full Bench has upheld this proviso to Section 60 under which the right of the mortgagor comes to an end by a decree of the Court since the Court has directed the mortgagor to deposit the price of redemption. In the case on hand, there is no decree relied by the respondent. Therefore, the above Ruling is not applicable to the facts of the present case.
13. In the decision reported in Anweerappa v. Shetty, : AIR1979AP156 in which the learned Judge has considered the circumstances under which the extinguishment of right to redeem by purchase by a mortgagee, the learned judge has considered the effect of Section 53A of the Transfer of Property Act and has observed that the sale deed which has not been registered can be relied on the prove part-performance. In the case on hand, question of applying the plea of part-performance in respect of a sale deed which has not been registered does not arise since Ex.B-4 is only an agreement of sale and not a sale deed as such. Therefore, this Ruling is not available to the respondents.
14. The learned Senior Counsel appearing for the respondents Mr. E. Padmanabhan has also referred to decision reported in K. Narayana v. Meenakshi, : AIR1974Mad158 wherein a Division Bench of this Court considered the proviso to Section 60 in a sale held in execution of power of sale under Section 69 and has held that 'the right of redemption docs not subsist and the mortgage came to an end by act of parties and mat the mortgagor's right to redemption. The Division Bench has also observed that the right of redemption is extinguished only when the sale is completed by a registered instrument is not correct.' Relying upon these decision, the learned Senior Counsel Mr. E. Padmanabhan has argued that it is wrong to suppose that the words 'act of parties' in Section 60 means only the transfer of equity of redemption by a regular sale deed and that even a subsequent oral agreement made early and voluntarily by parties to a mortgage whereby the mortgagor agrees to a release of the equity of redemption in favour of the mortgagee will operate an an extinguishment of right of redemption. According to the learned counsel appearing for the respondents, by executing Ex. B- 4, the first plaintiff viz., the mortgagor had agreed to a release of the equity of redemption in favour of the mortgagee viz., the first defendant and it will operate as an extinguishment of right of redemption and the trial Court has correct decide the case on hand and there is nothing to interfere with the same.
15. As against these Rulings relied by the learned counsel appearing for the respondents and the trial Court, the learned Senior counsel Mr. Chandramouli has argued that the Rulings prior to Narandas Karsondas v. S.A. Kamtam and Anr., : [1977]2SCR341 , cannot be said be binding on the Subordinate Courts, after the above decision viz., Narandas Karsondas v. S.A. Kamtam and Anr., : [1977]2SCR341 , which has over-ruled the decision relied by the trial Court viz., Meenakshi Velu and Anr. v. Kasturi Sakunthala and Ors., I.L.R. (1967) Mad. 161. In the decision relied by the learned counsel appearing for the appellants, viz., Narandas Karsondas v. S.A. Kamtam, : [1977]2SCR341 , the Supreme Court has considered the meaning of 'transfer' power of sale without intervention of Court, extinguishing of the right of redemption, Section 17 of the Indian Registration Act, etc., and has held laid the principle as follows:
'In India, the word 'transfer' is defined with reference to the word 'convey'. The word 'transfer' in English law in its narrower and more usual sense refers to the transfer of an estate in land. Section 205 of Law of Property Act in England defines; 'Conveyance' includes a mortgage, charge, lease, assent, vesting declaration, vesting instrument. The word 'conveys' in Section 5 of the Transfer of Property Act is used in the wider sense of conveying ownership.
The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by the Act of parties. The combined effect of Section 54 of the Transfer of Property Act and Section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and registration of transfer of the mortgagor's interest by registered instrument that the mortgagor's right of redemption will be extinguished. The conferment of power to sell without intervention of the Court in a Mortgage deed by itself will not deprive the mortgagor of his right to redemption. The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale.'
Their lordships who have made the above observation, have also referred to the decision relied by the trial Court viz., Meenakshi Velu and Anr. v. Kasturi Sakunthala and Ors., I.L.R. (1967) Mad. 161 on which the counsel for the appellants before them relied and has observed that it is contrary to the view expressed in the Ellappa Ndicker v. Sivasubramanian Maniagaram, AIR. 1937 Mad. 293 and also Bombay decision in Arraham Ezra Issac Mansoor v, Abdul Latif Usman, I.L.R. 1944 Bom. 549 and that they are entirely in agreement with the Bombay decision. Their Lordhips have further observed that the Madras decision Meenakshi Velu and Ors. v. Kasturi Sakunthala and Ors., I.L.R. (1967) Mad. 161 which holds a contrary view on which the counsel for the appellants relied is wrong. The Supreme Court has categorically held that the decision relied by the trial Court is wrong, Therefore, I am of opinion that the trial Court has committed an error in holding that the right of the plaintiffs to redeem the mortgaged, property has been lost by them in view of their entering into an agreement of sale under Ex.B-4. I am of opinion that the appeal has got to be allowed affording the right of redemption to the appellants. As already observed by me, this decision is arrived at the assumption that the agreement of sale under Ex.B-4 is valid. Even though the finding of the trial Court that the plaintiffs have lost their right of redemption as per the proviso to Section 60 of the Transfer of property Act is set aside, since it is set aside only on the assumption that the agreement of sale is valid, it is open for the respondents to agitate the matter for specific performance of the agreement which they are said to have entered into with the plaintiffs in the other suit.
16.. In the result, the appeal is allowed setting aside the judgment and decree of the trial Court and granting a decree in favour of the plaintiffs with liberty to the respondents to agitate their rights for specific performance of agreement of sale under Ex.B-4. Since the suit O.S. No. 218 of 1985 pending before the Sub Court, Madurai is of the year 1985, the Subordinate Judge is directed to dispose off the said suit within a period of four months from the date of receipt of the copy of this judgment. In this appeal, uninfluenced by the observations made in this judgment and giving liberty to both sides to adduce any further evidence in support of their respective contentions. In the circumstances of the case, there will be no order as to costs, in this appeal and the suit.