1965 (5) TMI 39 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of Section 9-A (10) (ii) (b) of the Madras Agriculturists Relief Act to a mortgagee.
2. Whether the mortgage property was transferred in trust to a charity for valuable consideration.
3. Whether the mortgage right was the subject of a partition among the family members.

Issue-wise Detailed Analysis:

1. Applicability of Section 9-A (10) (ii) (b) of the Madras Agriculturists Relief Act to a Mortgagee:
The appeal raised the question of the applicability of Section 9-A (10) (ii) (b) of the Madras Agriculturists Relief Act (Madras Act IV of 1938), as amended by Act XV of 1943 and Act XXIII of 1943, to a mortgagee. The appellants filed a petition for scaling down the mortgage debt under the provisions of the Act. The primary contention was whether the mortgage interest had been transferred to a charity for valuable consideration, thus exempting it from being scaled down under the Act.

2. Transfer of Mortgage Property in Trust to a Charity for Valuable Consideration:
The respondents argued that the mortgage property was transferred in trust to a charity for valuable consideration, invoking Section 9-A (10) (ii) (b) of the Act. The Subordinate Judge initially held that the charity was not a transferee for valuable consideration, and therefore, the proviso to Section 9-A (10) (ii) (b) did not apply. However, the High Court reversed this decision, holding that the family transferred the mortgage interest for valuable consideration within the meaning of the Act. The Supreme Court agreed with the High Court's finding, stating that the transfer of the mortgage interest to the charity in discharge of an earlier obligation constituted valuable consideration.

3. Partition of Mortgage Right Among Family Members:
The respondents also contended that the mortgage right was the subject of a partition among the family members, and therefore, it was exempted under Section 9-A (10) (ii) (c) of the Act. The Subordinate Judge held that the partition of the family in the sense of division in status was effected before the relevant period and that the mortgage interest was not allotted to some or one of the family members but was instead created in favor of a charity. The High Court held that the expression "partition" in Section 9-A (10) (ii) (c) meant partition by metes and bounds and that the mortgage interest was not the subject of partition. The Supreme Court did not find it necessary to consider the applicability of Section 9-A (10) (ii) (c) since it agreed with the High Court's conclusion on the transfer for valuable consideration.

Conclusion:
The Supreme Court upheld the High Court's decision that the mortgage interest was transferred to a charity for valuable consideration, thus exempting it from being scaled down under the provisions of the Madras Agriculturists Relief Act. The appeal was dismissed with costs.