Patna High Court
Mt. Barti Kuer And Anr. vs Brahmchari Singh And Ors. on 3 May, 1961
Equivalent citations: AIR1961PAT439, AIR 1961 PATNA 439
Author: V. Ramaswami
Bench: V. Ramaswami
JUDGMENT Choudhary, J.
1. This appeal by defendants 1 and 2 arises out of a suit for redemption.
2. On the 18th of November, 1927, Jatadhari Singh father of the plaintiffs, executed a usufructuary mortgage bond in favour of Bujhawan Singh, husband of defendant No. 3 and father of defendant No. 4, for a sum of Rs. 1,825/- in respect of lands appertaining to entire khata Nos. 46, 77 and 296 and portions of khata Nos. 47 and 78, lying in village Bagoni. According to the stipulation in the mortgage bond, the rent of the holdings had to be paid by the mortgagee for the lands given in the usufructuary mortgage and by the mortgagor for the lands which were outside the mortgage and were in possession of the mortgagor.
Thus the mortgagor had to pay rent for a portion of the holdings bearing khata Nos. 47 and 78, and the mortgagee had to pay entire rent for the holding bearing khata Nos. 46, 77 and 296 and a portion of the rent for the holding bearing khata Nos. 47 and 78. According to the finding of the lower appellate court, the mortgagee had to pay a sum of Rs. 66/- as rent and the mortgagor a sum of Rs. 33/- for these two khatas per year.
Both the courts below have found that both the mortgagor and the mortgagee defaulted in payment of the rent of these two khatas, as a result of which these two holdings, khata Nos. 47 and 78 were sold in execution of decrees for rent and were purchased by the mortgagee in the benami name of his relation Surajnath Singh, husband of defendant No. 1 and father of defendant No. 2. The case of the plaintiffs is that, in spite of the auction sale, their right of redemption subsisted and they tendered the mortgage money but the defendants refused to accept the same. Hence, they instituted the suit for redemption. Defendants 5 and 6 were made parties to the suit as being subsequent purchasers of some of the lands appertaining to khata No. 78 from Surajnath Singh.
3. The suit was mainly contested by defendants 1 and 2 who pleaded, inter alia, that since the sale of the two holdings was held due to the default of the plaintiffs themselves, their right of redemption was lost so far as the lands appertaining to khata Nos. 47 and 78 were concerned. Defendants 3 and 4, the heirs of the mortgagee, filed a written statement supporting the defence of defendants 1 and 2, but with respect to the lands appertaining to other khatas, namely, khata Nos. 46, 77 and 296, they admitted that the plaintiffs were entitled to get a decree for redemption.
4. Both the courts below, applying the principle of Section 90 of the Indian Trusts Act. held that the right of redemption was not extinguished by the auction sale of the two khatast referred to above. It appears that in a compromise in a certain criminal case, Surajnath. Singh had stated that his possession was that of a mortgagee and he was entitled to retain possession till redemption. The courts below, therefore, held that the defendants were estopped from challenging the right of redemption claimed by the plaintiffs. The suit of the plaintiffs was, accordingly decreed. Defendants 1 and 2, being thus aggrieved have presented this second appeal.
5. So far as the question of estoppel is concerned, Mr. Sinha, appearing on behalf of the appellants, has contended that title could not be created by admission in the compromise petition in the criminal case, and Mr. Das appearing for the plaintiffs respondents, has not challenged the correctness of this submission. We are, therefore, proceeding On the footing that the bar of estoppel is not applicable to the defendants in this case.
6. The real question to be decided in this case is, whether by reason of the auction sale in execution of the decrees for rent obtained for the lands appertaining to khata Nos. 47 and 78, the right of redemption of the plaintiffs was lost or not. The court below have relied on Section 90 of the Indian Trusts Act, which is in the following, terms.
"Where a tenant for life, co-owner, mortgagee, or other qualified owner of any property by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage."
As has been pointed out by a Bench of this Court in Jay Prosad Choubey v. Mt. Jasoda, AIR 1958 Pat 649, in order that the principle of Section 90 of the Trusts Act should apply, it must be shown that the mortgagee in possession by availing himself of his position as such has gained any advantage. In another Bench decision of this court in Jadubans Sahai v. Bahuria Phulpati Kuer, 1957 Pat LR 178 : (AIR 1957 Pat 452), it has been pointed out that there must be some causal connection between the acts Of commission or omission on the part of the mortgagee and the advantage he gained. If, therefore. there is absence of such causal connection or a mortgagee in possession having gained advantage of his position the principle of Section 90 of the Indian Trusts Act would not be applicable.
7. Applying the above principle of law, it has now to be seen whether in the present case Section 90 of the Indian Trusts Act can be of any assistance to the mortgagors. As already stated, the courts below have come to a concurrent decision that the sale was held due to the default of both the mortgagor and the mortgagee. They have also concurrently held that the purchase in the name of Surajnath Singh was actually made by the mortgagee in possession. On behalf of the appellants, it has been contended on these two findings that though the mortgagee himself was the purchaser the sale was not held due to his fault only, and the mortgagor was equally responsible for bringing about the sale, and as such the right of redemption was lost. Tt has been urged that in a case where the mortgagor himself is in default, the principle of Section 90 of the Trusts Act is inapplicable.
8. There are ample authorities to show that, where the sale is held due to the default of the mortgagor, his right of redemption does not subsist, even though the mortgagee himself is the purchaser at the auction sale. In Satahu Singh v. Sonful Singh, Second Appeal No. 942 of 1947, D/-31-1-1950 (Pat), in execution of a decree for rent obtained by the landlord, the entire holding was put to sale and purchased by the mortgagees themselves. It was held in that case that the liability to pay rent of the properties given in usufructuary mortgage was on the mortgagors themselves who defaulted in making payment of the same.
Their Lordships further held that, the sale having been brought about due to the default of the mortgagors themselves, they had to thank themselves, and nobody else and the purchase by the mortgagees coulcl not enure to the benefit of the mortgagors. The same view was taken in 1957 Pat LR 178 : (AIR 1957 Pat 452), referred to above wherein, it was held that where there was no attempt at all on the part of the mortgagee to take any un-due advantage of her position as such and when she had discharged all her obligations under the mortgage and the sale was brought about in spite of her, it cannot be said that the mortgagee had by availing herself of her position as such, gained an advantage in derogation of the rights of the other persons interested in the properties within the meaning of Section 90 of the Trusts Act. In AIR 1958 Pat 649, referred to above, the mortgagors were the defaulters, as a result of which the mortgaged properties were sold in execution of a decree for rent and were purchased by the mortgagees themselves. It was held that the mortgage was entirely extinguished by the auction sale and the right of redemption did not subsist.
9. To the above extent, the law is clearly established. Mr. Das, appearing for the plaintiffs respondents, has, however, contended that these decisions have no application to a case where, along with the mortgagor, the mortgagee himself is also a defaulter, and due to the default of the both the mortgaged property has been sold and purchased by the mortgagee. He contends that the principle of 'once a mortgage always a mortgage' must be applied to such a case and the equitable principle of Section 90 of the Trusts Act has full application to it.
He has relied, in support of this contention, on a Supreme Court decision in Sidhakamal Nayan Ramanuj Das v. Bira Naik, AIR 1954 SC 336, and this court's decisions in Deo Saran Singh v. Barhu Singh AIR 1952 Pat 286 and Subedar Rai v. Bachai Pandey, AIR 1960 Pat 423. On behalf of the appellants, however, it has been contended by Mr. Sinha that even where both the mortgagor and the mortgagee are the defaulters the principle involved in the decisions referred to above in regard to the default of the mortgagor could be equally applicable and the mortgager could be extinguished by sale of the mortgaged property brought about due-to the default of both the mortgagor and the mortgagee. In support of his contention he has relied on two unreported decisions of this court in Ram Khelawan Mahton v. Prem Sukh Dass, Second Appeal No. 1063 of 1949, D/- 18-12-1956 (Pat) and Ram Tapesar Rai v. Arjun Rai, Second Appeal No. 2512 of 1946, D/- 31-8-1949 (Pat).
10. In my opinion the submission made on behalf of the appellants is well founded and must prevail. In Second Appeal No. 2512 of 1946 (Pat), the holding came to be sold for default committed both by the mortgagor and the mortgagee and the purchase was made by the mortgagee, and the question raised was whether the right of redemption of the mortgage still subsisted after the above sale. Their Lordships pointed out in that connection that the plaintiffs could not insist upon the application of the equitable rule that the defendants should be treated as mortgagees even after the sale, when the plaintiffs themselves were in default and did not carry out the terms of their contract, and that a person who wants to insist upon equity being done to him must also show equity in his favour.
In Second Appeal No. 1063 of 1949 (Pat), also, the liability to pay rent was on both the mortgagors and the mortgagees, though a major portion of the rent had to be paid by the mortgagors, on a default being made by both the properties were sold and purchased by the mortgagees. Their Lordships held that the mortgagees could not, therefore, be said to have purchased the holding in the rent execution case by availing themselves of their position as mortgagees within the meaning of Section 90 of the Trusts Act.
11. So far as the cases cited by Mr. Das are concerned, they have no application to the facts of the present case. In AIR 1954 SC 336, what happened was that a tenant under the Orissa Tenancy Act mortgaged his land with the mortgagee under a simple mortgage. The land was put up for sale -in execution of the landlord's decree for arrears of rent, and the mortgagee on paying up the amount obtained possession, of the same under Section 225 of the Orissa Tenancy Act. The land was again sold in execution of a decree for arrears of rent and was purchased by the mortgagee himself. It was held by the Supreme Court that the case was governed by Section 90 of the Trusts Act and the right of redemption was not lost.
It has been contended by Mr. Das, that this was a case where the default in payment of rent was made entirely by the mortgagor himself, because the mortgage originally being a simple one, the liability to pay rent was on the mortgagor himself. In my opinion, however, the argument is not correct. Though under the original simple mortgage the mortgagor was liable to pay the rent, the position was altered when the mortgagee took possession under Section 225 of the Orissa Tenancy Act.
Under the statute he became a mortgagee in possession and was, therefore, under Section 76 (c) of the Transfer of Property Act, liable to pay rent thereof. A provision similar to Section 225 of the Orissa Tenancy Act is to be found in Section 171 of the Bihar Tenancy Act under which also a mortgagee is entitled to obtain possession of the mortgaged property on payment of the decretal dues in court to prevent sale of the same in execution of a decree for rent.
It has been held in Mt. Bibi Ganshul Fatma v. Badri Singh, AIR 1952 Pat 155, by a Bench of this court that, where a mortgagee obtains possession of the land on payment of the amount of the rent in accordance with the! provision of Section 171 of the Bihar Tenancy Act, a statutory mortgage is created in his favour under that section but the rights and liabilities of the mortgagor and mortgagee are governed by the law which applies to mortgages in general.
Section 76 (c) of the Transfer of Property Act casts a duty upon the mortgagee in possession to pay Government revenue, all other charges of a public nature and all rent accruing due in respect of the property out of the income of the same, in the absence of a contract to the contrary. Therefore in the above Supreme Court case liability to pay rent was entirely on the statutory mortgagee and he having purchased the holding in execution of a decree for arrears of rent due to his own default, could not extinguish the right of redemption.
That case, therefore, has no application to the present case. In AIR 1952 Pat 286, though according to the findings of the courts below both the mortgagors and the mortgagees were liable to pay rent, and the sale was, therefore, brought about not entirely due to the default of the mortgagees only, but also due to the default of the mortgagors themselves, this court, on construing the documents, came to the conclusion that the liability to pay the entire rental of the holding was on the mortgagees.
In those circumstances, their Lordships applied the principle of Section 90 of the Trusts Act, and held that the right of redemption was not lost. In AIR 1960 Pat 423, the rent decree and the sale following that decree were the result of the non-payment both by the plaintiff mortgagor and the defendant-mortgagee and the principle of Section 90 of the Trusts Act was applied.
But it appears that in that case it was found by the High Court that the defendant-mortgagee, not only defaulted in discharging his obligation to pay the rent, but he did so in order to bring about the sale so that he might gain advantage for himself. In that view of the matter as held in that case, Section 90 of the Trusts Act will undoubtedly come into application. That case also, therefore, has no application to the facts of the present case.
12. On a careful consideration of the authorities referred to above, my concluded opinion is that where in a case of a mortgage with possession the liability to pay rent is on both the mortgagor and the mortgagee and the sale of the mortgaged property is brought about due to the default of both, the right of the mortgagor to redeem the mortgage is extinguished even if the mortgagee himself is the purchaser at the auction sale, and the principle of Section 90 of the Indian Trusts Act has no application to such a case.
13. The result, therefore, is that the right of the plaintiffs to redeem the usufructuary mortgage, so far as the lands of khata Nos. 47 and 78 are concerned is extinguished and they cannot redeem the mortgage with respect to those lands. They are, however, entitled to redeem the lands appertaining to the other three khatas, namely, khatas Nos. 46, 77 and 296 with respect to which their right of redemption was admitted by the mortgagee-defendants 3 and 4 on payment of the proportionate amount of the mortgage money.
14. The appeal is, accordingly, allowed in part and the judgment and decree of the court below are set aside so far as the lands appertaining to khata Nos. 47 and 78 are concerned. The judgment and decree of the court below with respect to the other lands covered by the usufructuary mortgage in question are however maintained. In the circumstances of the case, the parties will bear their own costs of this court.
Ramaswami, C.J.
15. I agree.