1. This is a plaintiff's Second Appeal and arises in the following circumstances:--The first respondent Sanna Setty, who is the undivided brother of respondents 2, 3 and 4, borrowed a sum of Rs. 1,000/- from the present appellant and executed a registered mortgage-deed dated 12th December, 1936. It was a usufructuary mortgage deed. The mortgagor had agreed to deliver possession of all the properties to the possession of the mortgagee. The mortgagor did not deliver possession of the properties but continued to be in possession of those properties.
The mortgagee, that is the present appellant, filed a suit on 11th December, 1948 O. S. No. 142 of 1948-49 in the Court of the Second Munsiff, Mysore for the recovery of not only the principal amount but also interest, in all a sum of Rs. 2,000/-from out of the mortgaged properties. In the mean-while the mortgagor and his undivided bro hers had sold one of the items of the properties to the 5th respondent (12th defendant) for a sum of Rs. 1,000/- to discharge the debt of the present appellant and this amount of Rs. 1,000/- was paid to the present appellant by the 5'h respondent (12th defendant) at the request of respondents 1 to 4 on. 9th January 1949 that is after the institution of the suit.
Respondents 1 to 4, that is the mortgagor and his brothers resisted the suit on the ground that the appellant was not entitled to recover any interest from them in view of the fact that the properties had been delivered over to his possession on the date of the bond and that he had in turn leased them to one Basappa, son of Nanjedevaru. They alleged further that they were cultivating the lands for 'wara' under Basappa and had paid the share of the landlord and therefore the appellant had no right to recover any interest from them.
They further alleged that they are agriculturists and as such they are entitled to ask the Court to re-open the previous money transaction of the suit mortgage-debt and fix up the amount that is actually due to him. It was disclosed by them that only a sum of Rs. 650/- was the original principal amount and the balance of Rs. 350/- that constituted the consideration of the suit mortgage bond was the interest due on the original sum of Rs. 650/-which is merged in a decree passed against the first defendant.
It was conceded by the appellant that respondents 1 to 4 (defendants 1 to 4) were agriculturists and that his father had originally lent a sum of Rs. 650/- to the 1st defendant and had subsequently obtained a decree against the 1st defendant and that it is in satisfaction of that decree that the suit mortgage bond was executed by the first defendant in his favour. The learned Munsiff held that the present appellant was entitled to recover not only the principal but also the interest from out of the suit schedule properties and decreed the suit.
The 12th defendant (5th respondent) had prayed for right of marshalling. The present appellant had no object on for marshalling being allowed in his favour and hence that relief was granted. Respondents 1 to 4 preferred an appeal against that decision to the Court of the Additional Subordinate Judge, Mysore and the learned Additional Subordinate Judge allowed their appeal and dismissed the suit filed by the present appellant on the ground that the present appellant was not entitled to recover any interest from respondents 1 to 4 and that his remedy was to seek for possession of the properties and to claim interest or damages by way of interest on account of any default on the part of respondents 1 to 4. It is against this decision that the present Second appeal has been filed by the appellant.
2. It is interesting to note that respondents l to 4 had not averred in their written statement that the appellant was not entitled to recover any interest from them on account of his default in having not sought to enforce his right to possession of these properties by means of a suit. They did not allege in their written statement that the appellant was not entitled to recover the principal amount and his remedy was only to file a suit for the recovery of the suit schedule properties and be in possession of them till they discharge the debt as is now contended on their behalf.
On the other hand, respondents 1 to 4 had unequivocally stated in their written statement that what had been lent to the 1st respondent by the deceased father of the present appellant was only a sum of Rs. 650/- originally; that the appellant was not entitled to recover any interest on the balance of Rs. 350/- which constituted the consideration amount of the suit mortgage-debt and all that the appellant was entitled to claim and get was Rs. 650/- at six per cent per annum.
They had no objection for decree for the amount found on calculation on the above-said basis to be passed in favour of the appellant. They had asked for eight years' time to pay the amount in instalments, On the face of this written statement, there is no substance in the contention of the learned counsel for respondents I to 4 that the suit filed by the appellant for recovery of interest by way of damages or interest as such was not maintainable and was liable to be dismissed.
3. The only ground which was pressed by the learned counsel for respondents 1 to 4 was that the appellant was not entitled t3 institute a suit for the recovery of the mortgage-money from out of the suit schedule properties and much less to recover any interest from respondents 1 to 4 or from out of the suit schedule properties. It is clear from a reading of Section 68 Sub-section (1) Clause (d) of the Transfer of Property Act that a mortgagee has a right to sue far the mortgage-money when he being entitled to possession of the mortgaged property the mortgagor fails to deliver the same to him Or to secure the possession to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor. It cannot be disputed that the properties were not delivered over to the appellant by the 1st respondent immediately after executing Exhibit A, Respondents 1 to 4 have failed to establish that the appellant took possession of the lands and leased, them to one Basappa and that they were cultivating the lands under Basappa as 'wara tenants' and have paid the wara or lease amount to the said Basappa.
It was urged by Sri B. Kanakasabhapathy, the learned Counsel for respondents 1 to 4 that what all the appellant was entitled to recover was only the mortgage-money which did not include the interest and in the absence of any stipulation in the mortgage deed the suit filed by the appellant for recovery of not only the principal amount but also the interest was not maintainable. He cited some decisions in support of his contention. There was some conflict of decisions as to whether the expression 'mortgage-money' as defined in Section 58(a) of the Transfer of Property Act included the principal money and also the interest the payment of which is not secured in the document specifically. The Madras and the Calcutta High Courts held that a mortgagee was entitled to recover interest referred to in Section 58 (a) of the Transfer of Properly Act and that the interest referred to included the interest awarded by way of damages also. The Bombay, the Nagpur and the Allahabad High Courts, on the other hand, held that a mortgagee was not entitled to recover any interest in the absence of any specific condition in the document itself.
The following passage from the book by Sir Dinshah Fardunji Mulla's Transfer of Property Act(4th edition) at page 345 makes it clear that the contention of respondents I to 4 that a mortgagee is not entitled to recover any interest in the absence of any specific term in the document is no longer good law :
'The expression 'mortgage-money' is defined in Section 58 (a) as the principal money and the interest, the payment of which is secured for the timebeing. There were conflicting decisions as to whether the interest referred to in this section included interest after due date awarded by way of damages or under the Interest Act. Some Courts held that it did while others held that it did net and that interest awarded by way of damages was not recoverable out of the mortgaged property but was to be treated as a decree for damages.
The amended Order 34 Rule 11 of the Code of Civil Procedure now makes it clear that such interest is included in 'mortgage-money' ...... ...... The general rule, is that in the absence of a contract to the contrary, the mortgagee is entitled to treat the interest due under the mortgage as a charge on the estate'.
The learned Additional Subordinate Judge was not, therefore, right in holding that the present appellant was not entitled to recover any interest from out of the mortgaged properties since he had not taken an action to recover possession of the suit schedule properties from respondents 1 to 4.
4. The question for consideration is as to what exactly is the amount that the present appellant is entitled to recover from out of the mortgaged properties. As already stated, it is conceded by the present appellant that respondents 1 to 4 are agriculturist as defined under the Mysore Agriculturists' Relief Act. There is no basis for the observation of the learned Munsiff that respondents 1 to 4 were not entitled to ask for re-opening the accounts and for ascertainment of the exact amount that is due by them.
It is admitted by the appellant that a sum of Rs. 650/- had been advanced as loan to the first respondent by his deceased father and that his father filed a suit against the first respondent and obtained a decree for a sum of Rs. 1,500/-. It is also conceded by him that it is to discharge that debt that the first respondent executed the suit mortgage deed in his favour. It is therefore, clear that a sum of Rs. 650/- is the actual principal advanced originally and that the balance of Rs. 350/-is the interest. In the absence of any specific contract, the appellant is entitled to recover interest at six per cent, per annum from out of the mortgaged properties. This is conceded by the respondents in their written statement itself. Calculated on that basis, the appellant would be entitled to recover a sum of Rs. 468/- by way of interest only. The result is that the appellant is entitled to recover a sum of Rs. 1,468/- (one thousand four hundred and sixty eight only) from out of the mortgaged properties. The 12th defendant (5th respondent) who purchased an item of the mortgaged properties from respondents 1 to 4 has paid a sum of Rs. 1,000/- towards the discharge of this debt on 9th January 1949 to the appellant. The present appellant is, therefore, entitled to recover only a sum of Rs. 468/- (four hundred and sixty eight) from out of the mortgaged properties with proportionate costs throughout and nothing more.
5. In the result, therefore, this Second Appeal is allowed. The decree passed by the learned Additional Subordinate Judge, Mysore, dismissing the suit filed by the present appellant is set aside and in modification of the decree passed by the learned Second Munsiff, Mysore, there will, be a decree in favour of the present appellant for a sum of Rs. 468/- (Rupees four hundred and sixty eight only) to be recovered from out of the mortgaged properties with proportionate costs throughout.
The other directions in the decree of the learned Second Munsiff, Mysore, namely, allowing the claim of marshalling by the 5th respondent (12th defendant) and the grant of five equal annual instalments to pay the decree amount to respondents 1 to 4 are confirmed with the modification that the first instalment will fall due on 1-4-1958.
6. Appeal allowed.