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Monohar Das Mahanta Moharaj Vs. Hazarimull Babu - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Judge
Reported in(1931)33BOMLR1345
AppellantMonohar Das Mahanta Moharaj
RespondentHazarimull Babu
DispositionAppeal allowed
Excerpt:
.....properties to fall into arrears. the prior mortgagee, to protect his interest and stop the revenue sale, deposited the amount of the arrears under section 9 of beng. act xi of 1859. the mortgage deed also provided that if the mortgagors did not pay the government revenue the mortgagee would be competent to pay the same and the money so paid would be realisable from the mortgaged property. the mortgagee having sued to enforce a further charge for the arrears so paid against the mortgaged properties in priority of the subsequent mortgagee:-;held, that the first mortgagee was entitled to enforce the further charge in respect of the payments of revenue made after the passing of the final decree in priority to the subsequent mortgagee:;nugenderchunder ghose v. sreemutty kaminee..........of the subordinate judge of burdwan, raises the question whether the holder of a final decree for sale of mortgaged property is entitled to maintain a separate suit to enforce a further charge against such property for payments made to prevent a sale for arrears of revenue which fell due after the passing of the final decree and while execution proceedings were pending.2. in 1918 the then mahant of the asthal math instituted a suit on a mortgage executed in his favour on january 39, 1905, against the mortgagors, the tewari family, who are represented in the present suit by defendants nos. 1 to 6, joining the present defendant no. 7, in whose favour they had executed subsequent mortgages, and also other members of his family, who were interested in an earlier usufructuary mortgage of.....
Judgment:

John Wallis, J.

1. This case, which comes before this Board on appeal from a judgment of the High Court at Calcutta reversing the judgment of the Subordinate Judge of Burdwan, raises the question whether the holder of a final decree for sale of mortgaged property is entitled to maintain a separate suit to enforce a further charge against such property for payments made to prevent a sale for arrears of revenue which fell due after the passing of the final decree and while execution proceedings were pending.

2. In 1918 the then Mahant of the Asthal Math instituted a suit on a mortgage executed in his favour on January 39, 1905, against the mortgagors, the Tewari family, who are represented in the present suit by defendants Nos. 1 to 6, joining the present defendant No. 7, in whose favour they had executed subsequent mortgages, and also other members of his family, who were interested in an earlier usufructuary mortgage of some of the properties mortgaged to the Mahant. According to the finding of the lower Courts, prior to the institution of the present suit, the sole interest in this usufructuary mortgage had become vested in the present defendant No 7.

3. The Mahant obtained a preliminary decree for sale on June 23, 1919, and a final decree on June 6, 1920. Shortly afterwards he died and was succeeded in office by the present plaintiff, who took out execution proceedings in mortgage execution case No. 258 of 1922.

4. While these execution proceedings were pending the Tewari family, the mortgagors, allowed the Government revenue on some of the mortgaged properties for the years 1923 and 1924 to fall into arrears, and on each occasion the plaintiff, to protect his interest and stop the revenue sale, deposited the amount of the arrears under the provisions of Section 9 of Beng. Act XI of 1859, which is in the following terms:-

9. Deposits receivable from persons not proprietors.-The Collector or other officer as aforesaid shall, at; any time before sunset of the latest day of payment determined according to Section 3 of this Act, receive as a deposit from any person not being a proprietor of the estate or share of an estate in arrear, the amount of the arrear of revenue duo, to be credited in payment of the arrear at sunset as aforesaid, unless before that time the arrear shall have been paid by a defaulting proprietor of the estate.

And in case the person so depositing, whose money shall have been credited in the manner aforesaid, shall be a party in a suit pending before a Court of Justice for the possession of the estate or share from which the arrear is due, or any part thereof, it shall be competent to the said Court be order the said party to be put into temporary possession of the said estate or share, or part thereof, subject to the rules in force for taking security in the cases of parties in civil suits.

And if the person so depositing, whose money shall have been oredited as aforesaid, shall prove before a competent Civil Court that the deposit was made in order to protect an interest of the said person, which would have been endangered or damaged by the sale, or which he believed in good faith would have been endangered or damaged by the sale, he shall be entitled to recover the amount of the deposit, with or without interest as the Court may determine, from the defaulting proprietor.

And if the party so depositing, whose money shall have been credited as aforesaid, shall prove before such a Court that the deposit was necessary in order to protect any lien he had on the estate or share or part thereof, the amount so credited shall be added to the amount of the original lien.

5. On June 14, 1924, the plaintiff filed the present mortgage suit, No. 9 of 1924, to enforce a further charge for these payments against the mortgaged properties, misleading as defendant Nos. 1 to 6 the members of the Tewari family, the mortgagors, defendant No. 7, the subsequent mortgagee, and certain other members of defendant No. 7's family, who were found to have no interest in the mortgaged property. The mortgage deed of January 30, 1905, contained the following covenant by the mortgagors:-

We shall duly pay into the Collaborate revenues of the mortgaged property held in zemindari right ...If we do not pay, you shall be competent to pay the same into the Collectorate ... if you so desire, and the money so paid shall continue to be realisable from the mortgaged property like the money of this bond.

6. The plaintiff claimed by virtue of these provisions in the mortgage bond and of the provisions of Section 9 of Beng. Act XI of 1859, set out above, to be entitled to add to the amount of the original lien the sums of money which he had deposited on account of arrears of Government revenue. He also claimed the same relief in respect of certain cusses which he had paid, but this claim has been disallowed and is not now in question.

7. The Subordinate Judge held that the payments of revenue had been made to protect the mortgage property and that both under the provisions of the mortgage deed and of Beng. Act XI of 1859 the plaintiff was entitled to add them to his lien.

8. He also held that the payments having been made after the passing of the final decree and before sale, there was no sufficient reason why the charge should not be enforced by a separate suit. As regards priority, he held that the plaintiff was entitled to priority over the subsequent mortgagee. He accordingly passed a preliminary decree for the amount of the revenue payments with interest at the contract rate until the date fixed for payment.

9. From this preliminary decree defendant No. 7, the subsequent mortgagee, preferred an appeal to the High Court. The learned Judges of the High Court agreed with the lower Court that the deposits were made with a view to protect an interest which would have been endangered or damaged by the revenue sale within the meaning of Section 9 of Beng. Act XI of 1859, but held, as their Lordships read the judgment, that in respect of such deposits the plaintiff was not entitled to priority over the subsequent mortgagee unless he could tack them on to the mortgage debt in a suit on his mortgage, which, of course, he could not do in the case of deposits made after the passing of his mortgage decree.

10. They accordingly, in modification of the decree of the Subordinate Judge, dismissed the suit as against defendant No. 7, the subsequent mortgagee, and directed that the decretal amount should be a charge on the surplus sale proceeds of the properties, if any, after satisfying the mortgage decrees of the plaintiff and of defendant No. 7, and should be recoverable from defendants Nos. 1 to 6 personally.

11. In dealing with this question their Lordships think it desirable to refer in the first place to the decision of the Board in Nugenderchunder Ghose v. Sreemutty Kaminee Dossee (1867) 11 M.I.A. 241 The deposit of Government revenue to prevent a sale of the mortgaged properties in that case was governed by Section 9 of Beng. Act I of 1845, which was in the same terms as Section 9 of Beng. Act XI of 1859, omitting the last sentence as to the amount of the deposit being added to the amount of the original lien. The High Court had expressed the opinion that the depositor had no lien, but was confined to the personal remedy given by the section as it then stood. Their Lordships, however, expressed the opinion that the effect of the section was to give a personal remedy in addition to the lien, and observed (p. 258):-

Considering that the payment of the revenue by the mortgagee will prevent the Talook from being sold, their Lordships would, if that were the sole ' question for their consideration, find it difficult to come to any other conclusion than that the person who had such an interest in the Talook as entitled him to pay the revenue due to the Government, and did actually pay it, was thereby entitled to a charge on the Talook against all persons interested therein...

12. They were, however, of opinion that the suit out of which the appeal arose was not a suit to enforce such a lien, but to enforce the personal liability created under Section 9 of Beng. Act I of 1845. It appears from the judgment that no suit had been brought in that case to enforce the mortgage, and the case, therefore, is not a direct authority as to the effect of a deposit under Section 9 by the holder of a mortgage decree for sale in respect of arrears of revenue which had fallen duo after the mortgage decree and before the sale of the security. It appears to their Lordships, however, that the interest of the decree holder in the security directed to be sold is pending sale at least as great as that of a mortgagee before decree, and that the fact of his having obtained a mortgage decree before his claim to a lien arose is no sufficient reason for depriving him of such lien in respect of what are really subsequent salvage payments in the absence of a statutory provision to that effect. Accordingly the deposit in the present case was necessary to protect the appellant's lien, and the effect of the new provision in Section 9 of Beng. Act XI of 1859 is to enable him to add the amount of the deposit to his original lien.

13. For the respondent much reliance has been placed on the decision of this Board in Sundar Koer v. Sham Krishen which was followed in Jagannath Prosad Singh Chowdhury v. Suraj mal Jalal In their Lordships' opinion, all that was decided in the earlier case was that under the Transfer of Property Act the effect of the preliminary decree is to convert the mortgage claim into a judgment debt, and the mortgagee, as stated in the judgment, into a judgment creditor or decree holder, and consequently to deprive him of any right to further interest at the contract rate in respect of his mortgage claim covered by the decree. As regards the present question, the only effect of the preliminary decree was to make the mortgaged property security for the judgment debt pending realisation by sale as provided in the decree, and pending such realisation, the plaintiff, as a secured decree-holder, was just as much interested in the preservation of the security as he had been under his mortgage while it subsisted, and their Lordships see no reason why he should not be entitled, in accordance with the opinion of the Board in the case already cited, to a first charge in respect of the payments of revenue made after the passing of the final decree, which were really in the nature of salvage payments on behalf of all persons interested.

14. In the present case the same result is reached as to subsequent encumbrances by reference to the mortgage deed itself. The authority conferred upon the mortgagee by that deed to pay the Government revenue in respect of which the mortgagors make default is not limited in point of time. It is necessarily intended to continue so long as the mortgagee remains interested under the mortgage in the mortgaged properties. When the payment is so made it becomes by the very terms of the deed a further charge upon the properties which, presumably, is enforceable as such.

15. For these reasons their Lordships are of opinion that the appeal should be allowed and the decree of the Subordinate Judge restored, with this modification-that instead of a decree for sale the plaintiff should have a declaration that he is entitled to a first charge on the sale proceeds in the mortgage suit, and they will humbly advise His Majesty accordingly. The respondents will pay the appellant's costs both here and in the appellate Court.


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