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Vrajlal Jivandas Vs. Venkataswami Lingaya Sayana - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberO.C.J Appeal No. 29 of 1927 and Suit No. 565 of 1925
Judge
Reported inAIR1928Bom123; (1928)30BOMLR402; 108Ind.Cas.794
AppellantVrajlal Jivandas
RespondentVenkataswami Lingaya Sayana
DispositionAppeal allowed
Excerpt:
.....execution of decree against mortgagor or his property-costs of mortgage suit-personal liability of mortgagor or his legal representatives to pay such costs.;where at a court sale of the mortgaged property in execution of a decree obtained by the mortgagee on the original side of the bombay high court, the mortgagee purchases the property, with leave of the court given in general terms, for an amount which falls short of the decretal amount, it is open to the mortgagee to execute the decree for the unpaid balance either against the mortgagor personally or against his other property.;even if rule 72a of order xxi of the civil procedure code, framed by the high court of bombay, does apply on its original side, yet the rules made by the high court under the transfer of property act to deal..........proper by appropriate pleas to put that defence forward so that the judgment might go in an appropriate form. as far as i can see they have not done that here. that being eo, the present order must go against them personally. whether they have an indemnity against their own beneficiaries or against the assets of the estate which they are representing is an entirely different matter with which we are not ooncerned on the present application.45. the result will be that the present application will succeed; and the words added in the draft decree for payment of the costs out of the estate must be struck out.46. as regards the costs of the present application, we think that the respondents, the representatives of the mortgagor, must pay these apart from the costs of the previous hearing of.....
Judgment:

Amberson Marten, Kt., C.J.

38. This is an application by the successful appellants -plaintiffs, who are mortgagees, to vary the minutes of our order of September 5, 1927, as regards costs. The actual order that was made in our judgment was this :-

I would accordingly allow this appeal, and set aside the order of Mr. Justice Mirza under appeal, and pass an order in terms of the notice of motion of April 8, 1927, together with such subsequent interest as may be due thereunder to the appellants. The respondents will pay the costs of the notice of motion throughout including the costs of this appeal.

Now, if the notice of motion of April 8 be looked at, it will be seen that it asks that the balance in question should be payable out of the estate of the deceased come to the hands of the defendants. It also asks separately for the costs of 'this application and the order to be made thereon,' Stopping there that was the order that this Court made. In drawing up the order, however, in the office there has been a direction added that the costs in question are only to come out of the estate of the deceased. The appellants object to that, and that is the point we have to determine. The case came before us a fortnight ago, but neither counsel then appeared to be in a position to argue the points of law that arise on this application, and we, accordingly, adjourned it. Today no authorities have been cited to us on the main point by counsel for the appellants, but Mr. Dalvi for the respondents has been good enough to refer us to certain passages in Halsbury's Laws of England, Vol. XXI, which state what we believe to be the accurate practice in England and also in Bombay on the point. One proposition is that unless there is an express condition in the mortgage as to payment of costs,-and in the present case there is none-then in the absence of special circumstances those costs are merely added to the mortgage security and are not payable by the mortgagor personally. Thus in paragraph 525 it is stated:-

In a foreclosure action the costs of the mortgagee are not, in the absence of special circumstances, payable by the mortgagor personally; the mortgagee adds them to his debt, and the mortgagor only pays them if ho redeems. And the mortgagee is not liable in general to pay the coats of any other party to the action.

39. And at p. 231, paragraph 422, it is stated :-

The contract bat wean mortgagor and mortgagee, as interpreted by the court, makes the mortgaged property a security for the costs properly incident to a suit for foreclosure or redemption.

40. As to this in Ex parte Fewings (1883) 25 Ch. D. 338 Cotton L.J. says (p. 352) :-

No doubt, if the debtor, in his character of mortgagor, claimed to redeem the mortgage, the Court would not grant him that which originally was an indulgence, a departure from the strict tenor of his legal right, without imposing upon him the condition of paying the mortgagee, not only the debt which he had contracted to pay by his covenant, but any expenses which had been properly incurred by the mortgagee in her position as such. But that is an entirely different thing from saying that an action of debt could be maintained by the mortgagee against the mortgagor for those expenses. It is said that the mortgagee's right in a redemption action is founded on an implied contract by the mortgagor to pay these costs, but I am of opinion there is no such contract, but as a condition of redemption that a Court of Equity imposes on the mortgagor the terms of paying all costs properly inourred by the mortgagee for the purpose of protecting the estate or himself as mortgagee.

41. On the other hand it is pointed out in paragraph 425 in Halsbury, Vol. XXI:-

But a mortgagor or subsequent incumbrancer, who raises an untenable defence, must pay personally any costs so occasioned for which the mortgagee's security is insufficient, and a redemption action, if the mortgagor fails to redeem, is dismissed with costs to be paid by him personally.

42. Now, what are the facts of the present case? The mortgagee sued to enforce his security. The property was sold. The purchase price was insufficient to pay even the principal and interest quite apart from coats. Accordingly, the mortgagee took out a notice of motion asking for payment of the difference between the amount due to him for principal and interest and the amount realised by the sale of the mortgaged property. He served that notice of motion on the defendant. And the latter chose to appear and to contend that no such order could be made, because under the Civil Procedure Code the minimum reserve price should have ' been principal, interest and costs. This contention was in the teeth of the past practice on the Original Side under the Original Side Rules. It was also in the teeth of an order which the learned Judge had made in this very suit giving the plaintiffs leave to bid at the auction and set off their principal and interest against the purchase price. However, the learned Judge decided the matter in favour of the defendants and dismissed the motion. On appeal that decision was reversed in the way I have already mentioned.

43. In our opinion this is a case where the mortgagor has chosen to raise an untenable defence. What he is really asking us to do is this, that although if he had succeeded in the motion the mortgagee would have had to pay his costs, yet if, on the other hand, the mortgagee succeeds the latter has to bear his own costs, for there is no fund now out of which he can be paid. In other words, the mortgagor contends that he can carry on this litigation at the expense of the mortgagee. In our opinion that is not the law, nor the proper practice. Accordingly, in our judgment this is a case where, supposing the mortgagor was alive, it would be proper to direct him to pay the costs of the motion and also of the appeal.

44. Does it make then any difference that the mortgagor is dead, and is now represented by his legal representatives? In our opinion it does not. We are not dealing here with an administration suit. We are dealing with a hostile claim as between an estate and an outside mortgagee. That being so, if the executors choose to, defend this suit in this manner, they must incur the ordinary liabilities of a litigant as to costs. If in fact their testator's estate is insolvent, which I do not know, or if they fully administer the estate then it might have been proper by appropriate pleas to put that defence forward so that the judgment might go in an appropriate form. As far as I can see they have not done that here. That being eo, the present order must go against them personally. Whether they have an indemnity against their own beneficiaries or against the assets of the estate which they are representing is an entirely different matter with which we are not ooncerned on the present application.

45. The result will be that the present application will succeed; and the words added in the draft decree for payment of the costs out of the estate must be struck out.

46. As regards the costs of the present application, we think that the respondents, the representatives of the mortgagor, must pay these apart from the costs of the previous hearing of this application before us. On that day neither counsel was in a position to proceed. Accordingly, as regards the costs of that day we will let each party bear their own costs.


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