1. The lower appellate Court has reversed a decree for sale obtained by the plaintiffs as mortgagees. The ground assigned for this decision is that where in the case of a usufructuary mortgage the mortgagor agrees to redeem by payment of the principal after a stated period the mortgagee has no higher or better rights than he has under a simple usufructuary mortgage.
2. The mortgage in question was effected in the year 1869.
3. At that date the right of sale by mortgagees in the mofussil was governed by Regulation V of 1827, Section XV, Clause 3, which provides that in the absence of any special agreement or recognised law or usage to the contrary either party may at any time by the institution of a civil suit cause the property to be applied to the liquidation of the debt; the surplus if any being restored to the owner.
4. In the case of mortgages prior in date to the time when the Transfer of Property Act was extended to this Presidency, the then existing rights of the parties remain unaffected: Section 2 of Act IV of 1882. We are, therefore, in this case only concerned with the law enacted by the Regulation and with the terms of the agreement between the parties.
5. The instrument of mortgage after providing that the mortgagee in possession should manage the property taking the profits in lieu of interest proceeds:
The amount of Rs. 1,750 is borrowed on the said premises. We three of us shall after paying off the said amount of debt after 15 years from this day redeem our premises. Perhaps any one of us three might within the period pay off at one time the amount of rupees according to his share. You should allow redemption of the premises proportionately after receiving the amount and you should pass a receipt for the monies received.
6. The period of fifteen years has long since expired and the question we have to determine is whether there is contained in the words above quoted expressly or by implication an agreement that the property shall not by means of a suit be applied in liquidation of the debt. We think there is not.
7. The case is very similar to those of Mahadaji v. Joti 17 B. 425 and Ramchandra v. Tripura bai (1898) P.J. 43. There is a distinct covenant to pay after fifteen years, with an option to pay within that period, the money borrowed on the premises.
8. It is an agreement of a different class from those which were under consideration in Idrus v. Abdul Rahiman 16 B. 303 and Sadashiv Abaji v. Vyankatrao 20 B. 296. In the cases there was no promise by the mortgagor to pay but it was provided that he should be free to take possession whenever he chose to pay after the fixed period agreed upon for the mortgagee's enjoyment. In the case of Krishna v. Hari 10 Bom. L.R. 615 relied upon by the learned Judge in the Court below, the agreement was of the same kind as that in Idrus' case 16 B. 303.
9. We reverse the decree of the lower appellate Court and restore that of the first Court with costs throughout other than the costs of cross-objections.