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Damodar Venkatesh Dhopade Vs. Narhar Balwant Kulkarni - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberLetters Patent Appeal No. 18 of 1940
Judge
Reported inAIR1943Bom65; (1943)45BOMLR87
AppellantDamodar Venkatesh Dhopade
RespondentNarhar Balwant Kulkarni
DispositionAppeal allowed
Excerpt:
mortgage-accounts-mortgage decree-mortgagee entitled under decree to retain possession in lieu of interest till payment of decretal amount-mortgagee entering into possession-suit by mortgagor for accounts whether maintainable-dekkhan agriculturists' relief act (xvii of 1879).;under a mortgage decree the mortgagee was entitled to retain possession of the mortgaged property until the payment of a fixed sum by the mortgagor. the mortgagee entered into possession and some years later the mortgagor filed a suit against him for accounts of the rents and profits of the property. on the question whether the mortgagee was liable to account :-;(1) that in such a case the question whether the mortgagee in possession was liable to account depended on the terms of the decree in the mortgage suit..........1934 by the successor-in-title of the mortgagor against the grandson of the mortgagee and it was a suit for accounts of the mortgage.3. in a case of this kind the question whether a mortgagee in possession is liable to account, or to be redeemed, depends on the terms of the decree in the mortgage suit. for that proposition authority hardly seems to be necessary, but it can be found in tani v. hari (1887) p.j. 315. the trial judge, acting on this principle, the correctness of which has not been disputed, construed the decree of 1874, and he held that it negatived the mortgagor's right to claim an account. as it was provided in the decree that the mortgagee was entitled to retain possession until the payment of a fixed sum, viz. rs. 4,578, there could he no question of accounting, because.....
Judgment:

Broomfield, J.

1. This is a Letters Patent appeal from a decision of Mr. Justice Wassoodew.

2. The point for determination is whether a mortgagee in possession is liable to account under the following circumstances. In the year 1867 there was a mortgage, the terms of which are set out by Mr. Justice Wassoodew as follows :-

That the advance, of Rs. 3,000 should be paid in yearly instalments of Rs. 200, that if the instalments were not paid, the mortgaged property which yielded an annual rental of Rs. 200 should be handed over to the mortgagee, that the latter should enjoy the profits in lieu of interest, and that interest thereof should run at 12 per cent, per annum.

This translation of the operative terms of the mortgage is admittedly correct, except in one point. The original mortgage makes it clear that the interest at twelve per cent. per annum was provided merely for the period after default and before delivery of possession. It appears that the mortgagor neither paid the money nor handed over possession and in 1873 the mortgagee had to sue to recover his money. In 1874 a decree was made which provided as follows :-

It is found that Rs. 2,800 are due for principal and Rs. 1,778 for interest making up a total of Rs. 4,578 in terms of the bond. Consequently the mortgagee is entitled to possession of the property mortgaged except survey No. 24. If the Defendant mortgagor pays Rs. 4,578 to the mortgagee the proper thing will have been done. Until that sum is paid the property mentioned in the suit bearing survey Nos. 597 and 572 shall remain in the possession of the mortgagee.

The suit from which the present appeal arises was brought in 1934 by the successor-in-title of the mortgagor against the grandson of the mortgagee and it was a suit for accounts of the mortgage.

3. In a case of this kind the question whether a mortgagee in possession is liable to account, or to be redeemed, depends on the terms of the decree in the mortgage suit. For that proposition authority hardly seems to be necessary, but it can be found in Tani v. Hari (1887) P.J. 315. The trial Judge, acting on this principle, the correctness of which has not been disputed, construed the decree of 1874, and he held that it negatived the mortgagor's right to claim an account. As it was provided in the decree that the mortgagee was entitled to retain possession until the payment of a fixed sum, viz. Rs. 4,578, there could he no question of accounting, because he must be considered to be in possession in lieu of future interest only. The trial Judge thought that it was unnecessary to consider other issues which had been raised, and he dismissed the suit for accounts as not maintainable.

4. There was an appeal to the District Court which was heard by the Assistant Judge, and he differed from the trial Court and remanded the case for trial on the other issues. He thought that the case was governed by Datatraya v. Anaji (1886) P.J. 237 and that the mortgagee was liable to account.

5. Then there was a second appeal which was heard by Mr. Justice Wassoodew. He pointed out that Datatraya v. Anaji, the case relied on by the Assistant Judge, was not in point, because in that case the decree had not directed that the mortgagee was to retain possession until payment of a fixed sum. Mr. Justice Wassoodew considered on the other hand that two Bombay cases, viz. Navlu v. Raghu I.L.R. 1884) 8 Bom. 303 and Tani v. Hari, were in point and dealt with: decrees the terms of which were very similar to the decree which has to be construed in the present case. The learned Judge, however, took the view that the authority of these cases was weakened by a Privy Council decision, Sri Raja Papamma Rao v. Sri Vira Pratapa H.V. Ramachandra Razu. (1896) I.L.R. 19 Mad. 249 On the authority of this latter case he felt that he was bound to conclude not only that the mortgagee must submit to be redeemed but also that he was liable to account for the period of possession. Consequently the order of the lower appellate Court was upheld.

6. It will be necessary to refer briefly to these various cases. In Navlu v. Raghu there had been a mortgage in 1864 and in 1874 the mortgagee obtained a decree against the mortgagor ordering the latter to pay the former the sum of Rs. 40 and providing that in default of payment the mortgagee was to take possession of the land until the said sum should be paid. Subsequently the mortgagor sued to redeem the property, and in his suit he claimed an account of the mortgagee's possession. It was held that the mortgagee was not liable to account. The ratio decidendi was that the decree in 1874 had superseded the contractual relations between the parties, that the decree entitled the mortgagee to retain possession with all benefits of possession until: the mortgagor should pay a definite sum and that the mortgagee therefore under the decree had a complete title to the land until such payment was made. This case was approved in Tani v. Hari, to which I have already made reference. There also there had been a decree which provided that the mortgagee was to remain in possession of the mortgaged property until the decretal amount was paid, and a full bench of this Court held that the case was covered by Navlu v. Raghu and the mortgagor could not claim accounts. Datatraya v. Anaji, the case relied on by the learned Assistant Judge, was distinguished on the ground that there the decree simply awarded possession of the mortgaged property to the mortgagee and did not provide that he was to retain that possession till payment of a sum already determined.

7. Mr. Chitale, who appears for the respondent before us, made an attempt to distinguish Navlu v. Raghu. He argued first that the decree which was being construed in Navlu v. Raghu had put an end to the relation of mortgagor and mortgagee. That, however, is a misreading of the judgment. It is clear from the judgment at page 306 of the report that although the Court considered the argument that the relation constituted by the decree was not one of mortgage, its final conclusion was that even after the decree the relation was by way of mortgage between the parties, although it was a new relation different from that created by the mortgage itself. The fact that it was found to be a new relation, not the relation of the original agreement, was also relied upon by Mr. Chitale, but though Navlu v. Raghu may perhaps be distinguished on that point of detail, it is of no assistance to the respondent, because in our case the original mortgage bond provided, just as the decree in the mortgagee's suit did, that the mortgagee was entitled to possession in lieu of interest. That of course implied that he was not liable to account. These cases, Navlu v. Raghu and Tani v. Hari, are binding on this Court, unless Mr. Justice Wassoodew is right in his view that they are inconsistent with the ruling of the Privy Council in Sri Raja Papamma Rao v. Sri Vira Pratapa H. v. Ramachandra Razu.

8. The decree which had to be construed in Sri Raja Papamma Rao v. Sri Vira Pratapa H. v. Ramachandra Razu provided that the mortgagors were to pay up the whole sum decreed, principal, interest and costs within three months, 'failing which the plaintiff (i.e. the mortgagee) shall be put in possession of the immoveable and moveable property specified in the bond sued upon as provided in the terms of the bond.' The bond had simply provided that if the debt was not discharged according to the instalments, the mortgagee was to recover the same by means of the mortgaged property and other property of the mortgagors. The question which the Judicial Committee had to determine was whether the decree amounted to a decree for foreclosure or precluded redemption. It was held that the decree did not operate as a foreclosure and the mortgagor was entitled to redeem. On what terms he was entitled to redeem the Board did not determine. It may well be that in that particular case the ordinary rule that a mortgagee in possession is accountable might apply. But their Lordships certainly did not find that a mortgagee is liable to account in spite of a provision in a decree that he is to hold possession until payment of the decreed sum, for no such clause appeared in the decree. This Privy Council case therefore is distinguishable from the present very much on the same grounds as Datatraya v. Anaji has been held to be distinguishable. We find ourselves unable to agree with Mr. Justice Wassoodew that the authority of Navlu v. Raghu or for that matter Tani v. Hari has been 'very much weakened' or indeed weakened at all by any of the observations of their Lordships in this case.

9. Reference was also made in the course of the argument to Radhabai v. Ramchandra Vishnu and Ramchandra Vishnu v. Radhabai. I.L.R. (1910) 35 Bom. 204 That case was held not to be covered by the rule laid down in Navlu v. Raghu and the mortgagee was ordered to account for the period of his possession. But that was because the decree there contained a provision for future interest and the decree on its face contemplated the taking of an account in the future to ascertain the amount of accrued interest due to the mortgagee. In the case with which we are concerned that is not so, because, as I have pointed out, there is no provision about future interest. The only provision about interest relates to the period prior to the mortgagee's taking possession. It may also be pointed out that in Radhabai v. Ramchandra this Court considered the Privy Council case of Sri Raja v. Sri Vira and held that it supported the conclusion to which this Court came in that case. But it is clear from the judgment that no inconsistency of any kind was found to exist between the Privy Council case and the cases of Navlu v. Raghu and Tani v. Hari which were regarded as binding.

10. In Mareppa v. Gundo Annaji I.L.R. (1918) 43 Bom. 1 it was held, following Tatya Vithoji v. Bapu Balaji, I.L.R. (1883) 7 Bom. 330 that although, Section 13 of the Dekkhan Agriculturists' Relief Act allows the Court to go behind a private settlement or a private contract, it does not empower the Court to go behind a civil Court's decree in which any preceding contract between the parties was merged.

11. On the construction of the decree of 1874 we agree with the learned trial' Judge. We think the natural meaning of the words used is that the mortgagor was bound to pay the whole of the decretal amount as a condition precedent to his recovering possession, and the mortgagee was entitled to retain possession till then without liability to account for it. In our opinion the examination of the case-law does not necessitate the taking of any view other than that suggested by the words of the decree themselves. We hold therefore that the trial Court rightly decided that a suit for accounts could not be maintained.

12. The learned advocate for the respondent contended that in any case the suit should not have been dismissed altogether and the plaintiff should have been given liberty to amend his plaint and ask for redemption in order to enable him to recover possession of the lands. It was pointed out that according to Tani v. Hari the proper way of obtaining possession is by a suit for redemption and not by proceedings in execution of the decree in the mortgagee's suit. The plaint in the suit contained a prayer that an amendment might be allowed in order that instalments might be prayed for 'in respect of the amount found due under the account so that the land might be redeemed from the mortgage.' No application for amendment was, however,.... made and the trial Judge says that the suit was maintained as a suit for accounts only and redemption was not asked for. In the view we take the mortgagor could only redeem on payment of the whole amount decreed in 1874 without any question of accounting, and it is difficult to see how any case could be made out for instalments, seeing that no payment appears to have been made for all these years. It is by no means clear that the clause as to liberty to apply to amend, to which Mr. Chitale Deferred, was really an indication of a desire to sue for redemption in the event of the Court refusing the main relief of accounts. In any case as the suit is one for accounts and not for redemption as it stands, there would seem to be nothing to prevent the mortgagor from suing separately for redemption if he thinks it worth while to do so and provided there is no bar of limitation. On the whole therefore we think the trial Judge was right in dismissing the whole suit.

13. We allow the appeal. The decrees in second and first appeal are both set aside and the decree of the trial Court is restored with costs throughout.


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