Calcutta High Court
Jnanendra Nath Singh Roy vs Shorashi Charan Mitra And Ors. on 6 January, 1800
Equivalent citations: 69IND. CAS.759
JUDGMENT
1. The plaintiffs respondents are the representatives of Babu Sarada Charan Mitra, who instituted the suit out of which. this appeal arises Babu Sarada Charan Mitra was, according to the plaintiffs, a purchase of certain patni and holder of dar-patni leases in a property called Lalpur. The shit is brought against persons whom we call the Rays, the defendants-appellant!?, in whose favour a mortgage was executed of this property in 1896 by three persons whom we will refer to as the Bhatiasharyas. A suit was brought on the mortgage in 1909 by the mortgagees against the mortgagors (the Bhattacharyas) only, and without impleading Babu Sarada Charan Mitra, who, should, it is conceded, have been made a party if he had an interest in the property as is claimed for him. In the mortgage-suit, the then plaintiffs remitted a sum of some Rs. 4,000, and one of the principal questions in this suit is, whether the plaintiffs are entitled to the benefit of such remission, The date of the preliminary decree in the mortgage-suit was the 7th December 1909, and of the final decree the 25th January 1913. The Rays purchased the mortgaged property in execution of their degree in 1914 and obtained possession of it on the 4th August 1915, and are now in possession. The emit first seeks for a declaration that the debt due under the mortgage of the 9th August 1895 was satisfied before the institution of the suit on the said mortgage, and that the said suit, the decree obtained thereunder and the sale under that decree were fraudulent and are not binding upon the plaintiffs. The judgement under appeal is against the plaintiffs-respondents on this part of their case and no attempt has been made to reverse it. It is further prayed in the suit that, should the Court find that any portion of the mortgage-debt still remains unpaid, an apportionment of the mortgage-debt may be made between the different mortgaged properties; that an account be taken of what has been realised by the Singha Ray defendants-appellants, for redemption of the mortgaged properties, if necessary, and for the possession of the entire 8 annas share of the patni taluk Lot Lalpnr after such redemption. It is cot necessary to say, anything, upon the prayer for apportionment, because the manner in which the learned Judge has dealt with this contention hag not been contested before us. The real question which we have to decide is, whether or not the plaintiffs-respondents have a right to redeem and, if so, upon what terms. The learned Judge has held in favour of redemption on the terms of the desires passed in the mortgage-Suit. The defend-ants appeal on the ground that there was no right to redeem and, if there was, redemption could only be on the footing of the mortgage.
2. Tie main facts relevant to the arguments addressed to us in appeal are as follows: The property in suit, Lalpnr, belonged to one Upendra Nath Bbattaeharya, who had four sons, namely Nabi Kumar Bhattacharya, Kashi Nath Bhattacharya, Harendra Nath Bhatiasharya and Debendra Nath Bhattacharya, The last named was a lunatic. The others are referred to as the three brothers, the Bhattacharjee. These three brothers obtained Letters of Administration of their father's estate and on the 9th August 1896, executed, with the previous sanction of the District Judge, the mortgage which we have mentioned, of this and other properties for the sum of Rs. 7,025 carrying compound interest at 10 1/2 per sent, per annum with annual rests. The interest sanctioned by the District Judge was 9 per cent, simple interest. During the months of July and August 1901, these three brothers executed in favour of Babu Sarada Charan Mitra three dar-patni leases in respect of their 6 annas share in the property. On the 2nd August 1902 Aghore Mohinee Debi, the wife of the lunatic Debendra, as manager of his property, with the sanction of the District Judge, sold a 2-annaa share of the latter's patni right to Babu Sarada Charan Mitra. In January in the same year in execution of a money-decree the 6-annas patni interest of the three brothers was sold in execution and bought by one Tripura Charan Chatterji, who, in August 1915, sold the property to Babu Sarada Charan Mitra. The result, therefore, of these transactions (if real and not benami as alleged) was that Bahu Sarada Charan Mitra had an 8--annas patni interest in the property in suit and was dar-patnidar Under himself as regards the 6-annas. At the date of the mortgage suit his interest (if real) was 2-annas patni and a 6-annas dar-patni interest in the property mortgaged.
3. The case of the appellants, however, is that the plaintiffs have no title, as they allege that all the leases and sales to which we have referred were not real transactions. It is alleged that they were paper transactions without consideration, made benami for the benefit of the mortgagors. Stress is laid in this connection on the circumstances that Babu Sarada Charan Mitra was aware of and advised the mortgagees in respect of, the mortgage suit and yet was not made a party to it. The evidence as to this part of the case is not clear. Farther, it is said that if he really had an interest snob as is claimed for him, he would have redeemed the mortgage before this. Each of the said transactions was attacked in the lower Court, but this part of the case was not very seriously pressed before us and for good reasons. There is no question whatever but that the dar-patni leases were granted to Babu Sarada Charan Mitra and that these were real transactions. That this is so is borne out by the evidence produced by the appellants themselves. If so, then the dar-patni interest in Babu Sarada Charan Mitra was sufficient to support the suit for redemption, whatever may be the case as regards the subsequent sales to and purchase by him. But we see no reason for dissenting from the learned Judge's decision on this part of the case. He holds that the dar-patni leases to Babu Sarada Charan Mitra were for consideration; and that the rent was paid by Babu Sarada Charan Mitra, who was in undisturbed possession of the disputed 8-annas share of the patni taluk for a period of more than 12 years, until August 1915. when symbolical possession of the property was taken by the appellants. As regards the sale to Babu Sarada Charan Mitra by Sreemati Aghore Mohinee Debi, we have the District Judge's order granting permission to Sreemati Aghore Mohinee Debi to sell her husband's (the lunatic's) 2 annas share in the putni taluk, Lastly, as regards the purchase of the 6-annas patni interest by Tripura Charan Chatterji and the sale of the same by him to Babu Sarada Charan Mitra, there is not, as the learned Judge holds, any document which supports the suggestion that the purchase money was paid by the Bhat-featharya defendants, the mortgagors, and the account-books of Tripura, Charan show that the purchase was made by him with his own money. Ha holds, therefore, as we do, that the transactions mentioned above were real transactions for consideration and, if so, it is conceded that they support the right of the plaintiffs to redeem,
4. The real question in this case is one of greater difficulty, and has been argued at great length. It is not denied that if Sarada Chandra Mitra had the interest in the property which we find him to have had, he should have been made a party to the previous suit and would have been entitled to and is now entitled to redeem. The real and substantial question in this case is as to the terms upon which such redemption should be allowed.
5. The Subordinate Judge has allowed redemption on payment of the decretal amount in the previous suit together with 6 per cent, interest from 7th December 1909, the date of the previous preliminary decree, to the date fixed for redemption in the present suit. The appellant contends that this is wrong. This issue raises the question whether when a person insists upon his right to redeem on the ground that he was not a party to and bound by the decree, the account should be taken on the footing of the decree or of the security which he seeks to redeem. For the appellants it is urged that the respondent cannot both say that the decree is not binding on him and take the benefit of it. He cannot both repudiate and approbate. His right is a right to redeem the mortgage, the mortgage-decree being set aside to enable him to do so, For the respondent it is urged that the mortgagees were at fault in not making their predecessor a party. If he had been made a party, he would (it is assumed) have had the benefit of the remission made in that suit by the mortgagee as also of the order made in that suit as regards interest. Reliance is placed on the following observations of the Privy Council in Sukhi v. Ghulam Safdar Khan 65 Ind. Cas. 151 : 43 A. 469 : (1921) M.W.N. 445 : 14 L.W. 162 : 26 C.W.N. 279 : 42 M.L.J. 16 : 30 M.L.T. 175 : 24 Bom.L.R. 590 : 48 I.A. 465 : (1922) A.I.R. (P.C.) 11 (P.C.), "The plaintiff is a puisne mortgagee seeking to enforce her mortgage, the prior mortgagee in his suit having failed to make her a party, it is the duty of the Court to give the plaintiff an opportunity of occupying the position which she would have occupied if she. had been a party to the former suit. "
6. In the first place, it seems to us clear that: this, the latest decision of the Judicial Committee establishes that the account mast be taken on the footing of the mortgage which subsists and which it. is sought to redeem and not, as the learned Judge holds, merely on payment of the amount decreed in the previous suit with interest at the rate of 6 percent. No doubt, the decisions of the Judicial Committee Het Ram v. Shadi Ram 45 Ind. Cas. 798 : 40 A. 407 : 45 I.A. 130 : 5 P.L.W. 88 : 16 A.L.J. 607 : 35 M.L.J. 1 : 24 M.L.T. 92 : 28 C.L.J. 188 : (1918) M.W.N. 518 : 20 Bom.L.R. 798 : 22 C.W.N. 1033 : 9 L.W. 550 : 12 Bur.L.T. 72 (P.C.) and Matru Lal v. Durga Kunwar 55 Ind. Cas. 969 : 42 A. 364 : 47 I.A. 71 : 18 A.L.J. 306 : 38 M.L.J. 419 : 11 L.W. 529 : (1920) M.W.N. 338 : 2 U.P.L. R. (P.C.) 75 : 22 Bom.L.R. 553 : 32 C.L.J. 121 : 27 M.L.T. 319 : 25 C.W.N. 397 (P.C.) favour the respondent, but, as pointed out in the litest decision of Sukhi v. Ghulam Safdar Khan 65 Ind. Cas. 151 : 43 A. 469 : (1921) M.W.N. 445 : 14 L.W. 162 : 26 C.W.N. 279 : 42 M.L.J. 16 : 30 M.L.T. 175 : 24 Bom.L.R. 590 : 48 I.A. 465 : (1922) A.I.R. (P.C.) 11 (P.C.), Section 89 of the Transfer of Property act has been repealed by the Code of Civil Procedure, 1903, and the words in Section 89 "and thereupon the defendant's right to redeem and the security shall be both extinguished" have gone. It was these words which were the foundation for the view that the account must be taken on the footing of the decree, as according to the former provisions the mortgage was (apparently against all persons) extinguished. But these words have gone and their Lordships say: "Now the words being gone, their Lordships feel no difficulty in holding that the law remains as it certainly was before the Transfer of Property Act." According to that law, see Vines Chunder Sircar v. Zahur Fatima 18 C. 164 : 171. A. 201 : 5 Sar. P.C.J. 507 : 9 Ind. Dec. (N.S.) 110 (P.C.) the account in such a case should be taken on the footing of the, mortgage. The plaintiffs not being bound by the decree are in the same position as if no suit on the mortgage had been brought. We do not think that the third position taken up can be supported, namely, that we should deal with the matter as if the suit on the mortgage was pending and the respondent is now being made a party to that suit.
7. But it is then said, assuming but not admitting, that the account must be taken on the footing of the mortgage, yet the Privy Council in Sukhi v. Ghulam Safdar Khan 65 Ind. Cas. 151 : 43 A. 469 : (1921) M.W.N. 445 : 14 L.W. 162 : 26 C.W.N. 279 : 42 M.L.J. 16 : 30 M.L.T. 175 : 24 Bom.L.R. 590 : 48 I.A. 465 : (1922) A.I.R. (P.C.) 11 (P.C.) say in the passage already cited: "The plaintiff is a puisne mortgagee seeking to enforce her mortgage, the prior mortgagee in his suit having failed to make her a party. It is the duty of the Court to give the plaintiff the opportunity of occupying the position she would have occupied if she had been a party to the former suit," and it is urged that the plaintiffs should be allowed to redeem on the same terms as if they ware parties to the decree. It may well be that in a suit of such a character as this we must take notice of events occurring subsequent to the mortgage or decree. The facts of the case relied on is an instance of this. Bat the use to which these words are pat here is not, we think, justified by the decision.
8. As stated in the previous mortgage sail the mortgagee made a remision of some Rs. 4,000.
9. In the plaint in the suit of 1909 (Exhibit D) the mortgages plaintiff stated "there being no possibility of the entire amount being realised from the property as stated in Schedule kha, the plaintiffs are suing for the sum of Rs. 4,225 and the claim with regard to the interest (that is outstanding) is given 'up."
10. It is argued that the respondents should now also get the benefit of the remission made in the previous suit in favour of the mortgagors, on the above-mentioned principle laid down by the Privy Council- And next it is argued that interest should be calculated at the rate of 9 per cent. simple interest as sanctioned by the District Judge and not 10 per cent, compound interest, and that such interest should run not from the date of the mortgage to the date of payment fixed in this suit but from the mortgage date to the date of payment fixed in the previous suit, because that would have been the order had the respondents been made a party to the previous suit. The argument as to the rate at 9 per cent, is based on the fact that the sanction of the District Judge to the mortgage was for a mortgage carrying simple interest at 9 per sent. As regards this contention, which would apply only to the 2-annas share of Debendra, we may say at once that a disposal of property by an administrator in contravention of Section 90 (3) of the Probate and Administration Act is only viodabla and not viod and the same has not been avoided on his behalf or by the assignee of his share. We hold then that the contrast rate was 10 1/2 per cent, interest as stated in the mortgage.
11. The argument as to the period for which the contractual rate should run is based on the observation of the Privy Council that the party redeeming should be given the opportunity of occupying the same position as he would have occupied if he had been made a party to the former suit. If effect is given to the respondents' contention, then the result is this. Although the account is not (as we read the Judicial, Committee's latest decision) to be taken on the basis of the decree but of the mortgage, actually the same results follow as if the decree were made the basis of the account, for the respondents in such case would, according to their contention, get the remission allowed in the previous suit, and the period daring which the contract rate is to run would be that determined in the previous suit. We do not think that the judgment of the Privy Council justifies this argument. Is it the fact, moreover, that if Babu S, C. Mitra had been made a party to the former suit be would have got the benefit of the remission? Whether this remission would have been adhered to if the purchaser and sub-lessee had been originally a party or had been subsequently a party we cannot say, it is possible that the mortgagee may have been willing to remit his claim against the defendants to his suit who were not prepared to redeem a property, the value of which was small, but might have pressed it if the purchaser and lessee had been a party; for the latter, though under no personal obligation to pay, may have desired and may have been willing and able to redeem, in which case the mortgagee might have pressed a claim which he had thus an opportunity of realising. It is argued that unless we adopt the respondents' contention it would be a hardship on them, because they would suffer through the default of the mortgagees to make Babu S. C. Mitra a party to their suit as they should have done. Bat the answer we think in this or any similar case is that the hardship does not exist, as it is always open to the person not made party to redeem or to enforce his right of redemption by suit, It. is possible that Babu S, C. Mitra might have not found it convenient or worthwhile to redeem at the time fixed by the previous decree as may be inferred from the fact that knowing all the circumstances he made no attempt to redeem all these years and possibly only did so in this suit owing to an inereased value in the property.
12. In support of the plaintiffs' contention relianse is mainly placed upon the case of Gangadas Bhattar v. Jogendra Nath Mitter 11 C.W.N. 403 : 5 C.L.J. 315 and also on some passages in the judgments of the cases sited above on behalf of the appellants. In the case of Gangadas Bhattar v. Jogendra Nath Mitter 11 C.W.N. 403 : 5 C.L.J. 315 the position shortly stated was this. The first mortgagee purchased the property in execution of his mortgage decree to which a puisne mortgagee was not a party. The puisne mortgagee had, in the meantime, purchased some of the properties in execution of his decree on his own mortgage. The first mortgagee then sued for recovery of possession on the basis of his purchase of the mortgaged properties and the question was on what terms the defendants in that suit for possession were bound to redeem the plaintiff in order to retain possession of the properties as against him. The learned Judges seem to have been of opinion that the liability under the mortgage would be terminated on the date of the decree when it would pass from the domain of contract into the domain of judgment. This appears to us would have been so, having regard to the concluding words of Section 89 of the Transfer of Property Act under which the mortgage decree was passed. Sea Het Ram v. Shadi Ram 45 Ind. Cas. 798 : 40 A. 407 : 45 I.A. 130 : 5 P.L.W. 88 : 16 A.L.J. 607 : 35 M.L.J. 1 : 24 M.L.T. 92 : 28 C.L.J. 188 : (1918) M.W.N. 518 : 20 Bom.L.R. 798 : 22 C.W.N. 1033 : 9 L.W. 550 : 12 Bur.L.T. 72 (P.C.). The position has, as already stated, now bean altered by the omission of those words in the corresponding rule of the Civil Procedure Code (Order XXXIV, Rule 5) which replaces the repealed Section 89 of the Transfer of Property Act: see Sukhi v. Ghulam Safdar Khan 65 Ind. Cas. 151 : 43 A. 469 : (1921) M.W.N. 445 : 14 L.W. 162 : 26 C.W.N. 279 : 42 M.L.J. 16 : 30 M.L.T. 175 : 24 Bom.L.R. 590 : 48 I.A. 465 : (1922) A.I.R. (P.C.) 11 (P.C.). Than in Gangadas Bhattar v. Jogendra Nath Mitter 11 C.W.N. 403 : 5 C.L.J. 315 the learned Judges observe as follows, taking a hypothetical case: "in the first place, the mortgagee cannot legitimately ignore the fact that the mortgage debt has bean converted into a judgment-debt, and execution has followed thereupon because it is only in his characters as a purchaser and not as a mortgagee that he is entitled to possession. In the second place, if the suit for possession were treated as in substance a suit to enforce the security against the previously excluded parson, the mortgagee would be successfully mat with the plea of limitation." There is, however, no analogy between such a case and the present one. It seams to us that under the latter ruling of the Privy Council in Het Ram's case 45 Ind. Cas. 798 : 40 A. 407 : 45 I.A. 130 : 5 P.L.W. 88 : 16 A.L.J. 607 : 35 M.L.J. 1 : 24 M.L.T. 92 : 28 C.L.J. 188 : (1918) M.W.N. 518 : 20 Bom.L.R. 798 : 22 C.W.N. 1033 : 9 L.W. 550 : 12 Bur.L.T. 72 (P.C.) She plaintiff in the case of Gangadas Bhattar v. Jogendra Nath Mitter 11 C.W.N. 403 : 5 C.L.J. 315 would not have been entitled to any relief. Here the plaintiff seeks to redeem the mortgagee on the basis that he is not bound by the decree. It is true that there are observations in the judgment of Gangadas's case 11 C.W.N. 403 : 5 C.L.J. 315 which would seem to support the contention of the plaintiff, but having regard to the decision of the Judicial Committee in Sukhi v. Ghulam Safdar Khan 65 Ind. Cas. 151 : 43 A. 469 : (1921) M.W.N. 445 : 14 L.W. 162 : 26 C.W.N. 279 : 42 M.L.J. 16 : 30 M.L.T. 175 : 24 Bom.L.R. 590 : 48 I.A. 465 : (1922) A.I.R. (P.C.) 11 (P.C.) we do not think that those observations are now binding on us.
13. The respondent next contends on the strength of a passage in Umes Chunder Sircar v. Zahur Fatima 18 C. 164 : 171. A. 201 : 5 Sar. P.C.J. 507 : 9 Ind. Dec. (N.S.) 110 (P.C.) that he is entitled to the remission made in the previous suit, as their Lordships observed, that the penal rats of interest could not be claimed in that case because it was not claimed in the previous suit in 1S75. We think, however, that their Lordships did not allow the penal rate of interest, not because it was not claimed in the previous suit, but because it was penal. Their Lordships, however, allowed sash interest as the contrast gave the mortgagee. We are of opinion, therefore, that so for as the plaintiff is concerned the mortgage of the defendant subsists and that the plaintiff should not be allowed to approbate and reprobate the decree in the previous suit and he can only be allowed to redeem on the terms of the mortgage and on payment of interest; at the rate payable under the mortgage up to the date of redemption to be fixed in this case.
14. In our opinion we must deal with the matter as if there had been no suit at all, This follows from acceptance of the principle that the account is to be taken on the footing of the mortgage. That being so, the mortgagees are entitled to receive the whole of the principal earn due on the mortgage with interest at the bond fate of 10 1/2 per cent, from the date of the bond until the date which (as the date for redemption fixed by the lower Court is now passed) we fix as a date three months from the date of the declaration of the amount payable under this decree and thereafter at 6 per sent. As regards the actual profits realised since the 4th of August 1915, when the mortgees obtained possession of the mortgaged property, the learned Judge has, without taking any account, simply directed that such realisations be set off against interest payable, This is a rough and ready method which may be adopted with the consent of the parties. But here the respondents object to this course in their cross-objection, which must be allowed. The amount of profits should not be taken as an equivalent of the interest due. We, therefore, direct that an account be taken of what is due to the defendant No. 1, who is the assignee of the other mortgagees, defendants Nos. 2 to 4, for the principal and interest on the mortgage and for his costs of the suit up to this date, allowing credit for all the sums paid to the mortgagees and the actual profits realised by them during the period they have been in possession of the mortgaged property, plaintiff being given three months from the date of declaration of the amount due on the account hereby directed for redemption of the mortgage. The usual redemption decree is hereby made. In the result both the appeal and cross-objection succeed and the judgment and decree of the lower Court are reversed. We pass in lieu thereof a decree in terms of this judgment. The appellant is entitled to his costs against the plaintiffs-respondents to be assessed on the valuation of the appeal against which the plaintiffs respondents may sat off the costs of their cross-objection, which in part succeeds, and which costs we assess at Rs. 150 as hearing fee and no further costs. As regards respondents Nos. 6 to 9, who were only concerned with the question of apportionment, the cross-objection by plaintiffs-respondents was not pressed and are dismissed. In respect of them, the 'plaintiffs-respondents will pay to the respondents Nos. 6 to 9, five gold mohurs as hearing fee.
15. The account directed by us will be taken by the lower Court and returned to this Court in order that this Court may draw up the decree.