1. This is a Letters Patent Appeal from the judgment of the Chief Justice in Second Appeal No. 102 of 1920. The suit was Original Suit No. 43 of 1915, and was filed by the plaintiffs who are trustees of a wakf, and they sue to recover possession of three lots, which had been alienated by former trustees, in breach of trust and in excess of their authority as trustees, to the defendant or defendant's predecessor-in-title. Lots Nos. 1 and 2 were sold by these former trustees on the 9th May 1903. Lot No. 3 had been mortgaged by them on the 9th September 1901. The District Judge in First Appeal dismissed the suit as regards lots Nos. 1 and 2 as time-barred under Article 134 of the Indian Limitation Act. But as to lot No. 3 the learned District Judge held that time was saved by time occupied in Suit No. 3 of 1910 which had been filed by the plaintiffs to secure a declaration that the property in suit was wakf property. He accordingly set aside the mortgage and decreed possession to the plaintiffs subject to their paying compensation of Rs. 99 to the defendant.
2. In Second Appeal No. 102 of 1920, the learned Chief Justice held that as regards lots Nos. 1 and 2 time was also saved because the period occupied in prosecuting Suit No. 3 of 1910 would be taken into account. He, therefore, held that the plaintiffs were entitled to a declaration that the sale of these two lots on the 9th May 1903 was invalid. But as regards the prayer for possession, the defendants pleaded mortgages, one of the 5th of September 1891, and the other in 1898, under which they were in possession at the time of the sale. As to these, the learned Chief Justice held that those mortgages were extinguished by merger, and accordingly decreed the plaintiff's suit. As to lot No. 3, the learned Chief Justice erroneously referred to the decree passed by the District Judge as a decree for redemption on payment of the sum of Rs. 99, and he accordingly varied the decree and decreed the plaintiffs' claim for possession without payment of this sum which is really compensation but by mistake referred to as redemption money.
3. In this Letters Patent Appeal filed by the defendant, it is admitted that the defendant's title as regards lots Nos. 1 and 2 under the sale of the 9th May 1903 cannot be sustained; but Mr. Patwardhan urges that the mortgages of 1891 and 1898 were not extinguished by merger. The law on the subject is enacted in Section 101 of the Transfer of Property Act under which on the acquisition of superior right the inferior right is extinguished unless the owner declares by express words or necessary implication that it shall continue to subsist or such continuance would be for his benefit.
4. Now, there has been here no such declaration as is contemplated by this section; but Mr. Patwardhan laid stress on the last words of the section and argues that the continuance of the mortgage would be for the benefit of his client, and, therefore, it must be held that there was no merger. The last clause of Section 101 of the Transfer of Property Act, i.e., the words 'continuance would be for his benefit' are merely a guide to the intention of the owner, and it seems to me clear that the question of benefit must be decided in view of the circumstances existing at the time of the transaction. Otherwise the nature of the title might be in suspense for an indefinite time. Where there is no mesne incumbrance outstanding at the time of the sale, the conclusion seems to be inevitable that the mortgage has been extinguished. I refer in this connection to the case of Lomba Gomaji v. Vishvanath Amrit Tilvankar I.L.R. (1893) l8 Bom. 86 and the remarks of Jenkins C.J. in the case of Fakiraya v. Gadigaya I.L.R. (1901) 26 Bom. 88. In any case, the terms of the section throw the onus on the owner to prove circumstances from which it can be inferred that it was to his interest to keep the charge alive, so that at the time of the transaction that was his intention. No such evidence has been given on behalf of the defendants. I, therefore, think that the conclusion arrived at by the learned Chief Justice that these mortgages were extinguished on the plaintiffs' sale is correct.
5. It is also faintly urged that the defendant was entitled to tack his adverse possession as purchaser since 1903 to his prior adverse possession as mortgagee. But possession cannot be tacked unless it is indentical in nature, Before 1903 the defendants were holding adversely only to the extent of their mortgage interest.
6. The appellant, therefore, has no case as regards lots Nos. 1 and 2.
7. As regards lot No. 3, it is true that the learned Chief Justice has treated Rs. 99 as redemption money, whereas the District Judge decreed payment of this sum not by way of enforcement of the mortgage but as compensation awardable to the defendant in return for setting aside the mortgage. However, no objection has been taken to this sum in appeal, and as it is not shown that the trust estate received any benefit from the mortgage money, it is doubtful whether this is a case in which compensation could have been awarded.
8. I, therefore, confirm the decree of the learned Chief Justice and dismiss this appeal with costs.
9. On the question of possession in regard to lots Nos. 1 and 2, I do not see how the fact of the defendant's having possession from 1891 under his mortgage deed can affect the question of limitation that arises in the suit. Admittedly Article 134 of the Indian Limitation Act is the proper article to apply, and under that limitation runs only from the date of the transfer by the trustee or mortgagee and not from the preliminary conveyance, bequest or mortgage. This is clear from the use of the word 'transfer' in the third column, corresponding to the word 'transferred' in the 1st column of the article, and is supported by a comparison of the wording of the preceding Article 133, where the word 'purchase' in column 3 clearly also refers to the subsequent transaction mentioned in the 1st column. Article 142 or Article 144 does not apply to this particular case, and, therefore, no question of adverse possession, in my opinion, arises.
10. In regard to the question of merger, I agree with my learned Brother that the time to be considered in determining whether the continuance of the incumbrance would be for the benefit of the owner of the incumbrance must be the time of the transaction under which he becomes absolutely entitled to the property. On this point I agree with the view taken in the case of Jugal Kishore v. Ram Narain I.L.R. (1912) All. 268.
11. The second point is whether in this case we should draw a presumption that the defendant when he obtained the sale deed of 1903 intended the incumbrance to subsist because it was for his benefit to do so. No doubt, in the case of Gokaldas Gopaldas v. Puranmal Premsukhdas I.L.R. (1884) Cal. 1035 it is said : 'The ordinary rule is that a man having a right to act in either of two ways, shall be assumed to have acted according to his interest.' But that was a case where a mortgagor's right, title and interest in certain immoveables was sold subject to a first and a second mortgage and the purchaser afterwards paid off the first mortgage. There was, therefore, another incumbrance subsisting, and it clearly was for the banefit of the purchaser of the mortgagor's right, title and interest that there should not be merger. Their Lordships' remark, I think, is intended to apply to cases of that description. Thus after referring to the familiar instance of a tenant for life paying off a charge after the inheritance, they say: 'In each case it may be for the advantage of the owner of a partial interest to keep on foot a charge upon the corpus which he has paid.' But that is a very different case to one where the purchaser is the original mortgagee and there is no outstanding incumbrance. On this point I may refer to the remarks of Chief Justice Bellows in an American case cited in Ghose's Law of Mortgage in India, 4th edition, Vol. I, page 488. He says: 'The doctrine of merger springs from the fact that when the entire equitable and legal estates are united in the same person, there can be no occasion to keep them distinct, for ordinarily it could be of no use to the owner to keep up a charge upon an estate of which he was seised in fee simple.' I think, therefore, the ordinary presumption in such a case is that the owner does not intend to keep up the charge upon the estate to which he has acquired a full title. This counteracts the rule laid down in Gokaldas Gopaldas v. Puranmal Premsukhdas, and I think the learned Chief Justice was right in holding that in this case there had been a merger.
12. On the other points I agree with what my learned Brother has said and concur in the proposed order.