(1) The defendants are the apellants. The suit was filed for the recovery of a sum of Rs. 6,433-3-9. The plaintiffs represented the interest of the mortgagees under two mortgages dated 10-1-1920 and 6-3-1920 executed by the lather of defendant 1 as well as by defendant 1 and his undivided sons, defendants 2 and 3. The mortgagees sued to enforce their mortgages in O. S. No. 70 of 1932 on the file of the Subordinate Judge's Court of Amalpuram.
A preliminary decree was passed on 29-3-1935 and it was followed by a final decree dated 30-3-1936. It appears that the decree amount was scaled down to about Rs.16,000/- is C. M. P. No. 211 of 1938 on 3-11-1938. The bulk of the scaled down amount had been paid by the mortgagors before the date of the present suit which was insituted on 26-1-1948. The plaintiff's claim in the suuit, now under appeal fails under four heads: (1) Rs.2396-0-6 Consisting of sums paid by the mortgagees in order to avert a revenue sale of a portion of the hypotheca, R. S. No. 336 in Kottalanka.
The principal amount of the sums paid by the mortgagees and the interest thereon till the date of plain amount to Rs. 2,396-0-6; (2) Rs. 1,646-3-4 representing the costs paid by the mortgagees to the Government and incurred by themselves in connection with a suit filed by them against the Government for a refund of the amount paid by them for averting the revenue sale referred to above the for an injunction against the Government.
The sum of Rs.1,646-3-4 is inclusive of interest on the amount paid as costs by the mortgagees; (3) Rs.1,311-5-0 representing amounts paid by the mortgagees to receivers appointed in the mortgage suit O. S. No. 70 of 1932 and the interest on the sums so paid up to the date of suit; and (4) Rs.1085-10-9 representing amounts deposited by the mortgagees for setting aside sales of portions of the hypotheca for arrears on the amounts so paid till the date of suit.
The Court below decree the claim of the mortgagees under all the above four heads, overruling the objections of the mortgagors. On this appeal, the mortgagors against object to the decree in respect of these items. It is argued that the claim in respect of the d four items is barred by limitation and that the remedy of the mortgagees was to have claimed and recovered these amounts in the mortgage suit O. S. No. 70 of 1932.
(2) It is also urged that the four payments made by the mortgagees and now sought to be recovered from the mortgagors were in the nature of voluntary payments and therefore not recoverable. It is convenients and therefore not recoverable. It is convenient to deal with the four items separately.
(3) As regards the first item, the amount of Rs.2,396.0-6 represents the principal and interest of the sums paid by the mortgagees to set aside the revenue sale of a portion of the mortgaged property for realisation of the penal assessment due from the mortgagors in respect of lands other than those comprised in the mortgage. The sale was fixed for 25-9-1936 and on the previousday the mortgagees paid Rs. 1,419-3-0 to avert the sale.
This sun with subsequent interest amounts to Rs.2396-0-6. The argument of the appelalnts is that this payment was made not in respect of the revenue due from the mortgaged property, but for the surpose of sastisfying a penal assessment levied on the mortgagors in respect of lands not comprised in the mortgage, but on which the mortgagors had trespassed or encroached. Therefore, it is argued that the mortgagees are not entitled to recover this money for the mortgagors.
This argument proceeds on a fallacy. Though the penal assessment was levied in respect of in encoachment by the mortgagors on lands other than those comprised in the mortgage, still it was open to the revenue authorities to realise the amount of penal assessment from the lands of the mortgagor other than those encroached upon. Acting under this power, the revenue authorities brought to sale an item of the mortgaged property.
As pointed out by the decision of the Madras High Court in -- 'Secy. of State v. Jodhraj Dupajee, AIR 1942 Mud 244 (A) the revenue sale would have extinguished the title of both of the mortgagee and the mortgagor to the item brought to sale for realisation of the penal assessment. In such circumstances, the mortgagees had a right to spend such money as was necessary for the preservation of the mortgaged propoerty from destruction or sale under S. 72(b), T. P. Act.
Consequently, the mortgagors would be liable to reimburse the amount expended by the mortgagees for the purpsoe of averting the revenue sale and the mortgagees would be entitled to add the amounts to expended with interest to the mortgagee money.
(4) The second item of Rs.1,646-3-4 is in respect of costs paid to Government and expenses incurred by the mortgagees in connection with the prosecution of a suit O. S. No. 42/37 on the file of the District Munsif's Court, Amalapuram and an appeal to the Court of the Subordinate Judge and a second appeal to the High Court. After paying the sum of Rs.1419-13-0 for averting the revenue sale referred to above, the mortgagees sued the Government for refund of the said sum and also for an injunction restraining the Government from bringing other items of mortgaged property to sale, for the realisation of the penal assessment levied on the mortgagors in future.
The suit was dismissed by the District Munsif, decreed on appeal by the Subordinate Judge and again dismissed on Second Appeal by the High Court on 1-9-1941. The expenditure incurred by the mortgagees in connection with these proceedings as well as the costs paid to the Government in connection therewith were not expenses incurred for supporting the mortgagor's title to the property or making good the title of the mortgagees against the mortgagors.
It is only in such cases that a mortgagee is allowed all proper costs, charges and expenses incurred by him. Expenses incurred for the realisation of the mortgage debt or the preservation of the mortgage security, including the costs of litigation properly undertaken by the mortgagee for the aforesaid purpose can be added to the mortgage money.
The mortgagee is also entitled to add to his security the costs of all proceedings to which he is properly made a party in his capacity as a mortgagee. The suit O. S. No. 42 of 1937 was instituted by the mortgagees and the appeals therefrom were conducted on the footing that the Government had wrongfully sold a portion of the hypotheca for arrears of revenue due under penal assessments levied on the mortgagors in respect of their encroachment on the properties not comprised in the mortgage.
It was found by the High Court that the Government was entilted to realise the arrears of penal assessment from the portion of the hypotheca attached and brought to sale by the Government. According to the mortgagees the action of the Government was wrongful and they sought their remedy against the Government, but in truth the Government was acting within its legal rights.
The costs of the litigation concerning the mortgaged property arising out of a wrongful act of a third person would not be allowed to a mortgagee, unless they were incurred in protecting the title to the mortgaged property; here the suit was for refund of money alleged to have been wrongfully realised by a threatened illegal sale of the hypotheca.
In view of the paramount right of the Government to sell the property and thereby extinguish the title of both the mortgagor and the mortgagee, it was futile for the mortgagees to sue the Government on the basis that they had committed a tort. It was so held by the High Court of Madras in S. A. No. 508 of 1939 (Mad) (B), and the mortgagee's suit was dismissed with the costs of the Government.
In these circumstances, there was no question of the mortgagees protecting either their own title as mortgagees or the mortgagors' title to the property and the costs incurred by them in the litigation conducted against the Government could not be added to the mortgage security or recovered from the mortgagors. The costs incurred by the mortgagee in the litigation against Government stand on wholly different footing from the amounts paid by then to avert the revenue sale.
(5) The third item of the mortgagees' claim relates to a sum of Rs.1311-5-0 representing two payments of Rs.400/- and Rs.420/- to the Receiver appointed in the mortgage suit O. S. No. 70 of 1932 and interest on such payments up to the date of suit. It may be mentioned that the Receiver was appointed at the instance of the mortgagees in order to realise the rents and profits and pay them into Court for being applied in reduction of the mortgage debt. It is no doubt open to the Court to grant to the Receiver such fee or commission on the collections of the property by way of remunderation as the Court thinks fit. It is not the law that a Receiver should always with his consent to act without a salary. This is usually the case where party to the suit is appointed as Receiver or a trutee or other person interested in the property proposed himself as a Receiver.
A receiver is entilted to his costs, charges are expenses properly cincurred in the discharge of his duties. The Receiver is an officer of Coiurt and the Court has to fix his remuneration and direct payment of the same by one or other of the parties the suit or from the rents and profits realised by the Receiver. In the present case, it is not shown that the order appointing the Receiver fixed any salary on remuneration as payable to him; nor is it shown that the payments alleged to have been made to the Receiver by the mortgagees were sanctioned or approved by the Court either before or after the payments were made.
There isnothing to show that the Court's attention was drawn to such payment and the Court accorded its sanction, expressor implied therefor. In these circumstances, it is not possible to charge the mortgagors with payments made by the mortgagees to the Receivers privately outside the Court.
(6) The fourth and last item of claim relates to monies deposted by the mortgagees for setting aside revenue sales of oportions of the hypotheca from time to time. The total amount of such payment with interest amounts to Rs.1089/-. It was saettled law even before the Transfer of Property Act, that payments made by a mortgagee in discharge of the revenue due on the mortgaged properties, which the mortgagor had defaulted to pay could be added to the mortgage money and realised by sale of the mortgaged property.
Section 72, Cl. (b) merely enacts the previous law and clearly entitles the mortgagee to add the amounts of revenue paid by him to the mortgage money.
(7) In the present case, the payments made by the mortgagees in order to prevent a sale of the mortgaged property for arrears of revenue, were made after the passing of a final decree in the mortgage suit. An application was made by the mortgagees at the time when the amount due under the mortgage decree was scaled down for inclusion of the amounts paid by them for avoiding the revenue sales of the hypotheca in determining the amount due and payable by the mortgagors to the mortgagees.
The Court, however, held that on a sclaing down application, it had jurisdiction merely todetermine the amount of the original mortgage debt and subsequent interest payable under Madras Act 4 of 1938 and that it could not entertain a prayer for other reliets: Vide Ex. A-77. This order was confirmed by the High Court in C. M. A. No. 149/39. During the course of the execution proceedings, the mortgagees applied to the Court for adding these amounts to decree amount realisable in execution.
The mortgagees were referred to a separate suit: See Ex. A-11 dated 12-8-1941. In these circumstances, it is not open to the mortgagors to contend that the remedy of the mortgagees for realising the amounts now sued for lay in taking appropriate step in the mortgage suit O. S. No. 70 of 1932. Apart from this, there is some authority for the view that a separate suit fro the sums which the mortgagee is entitled to recover from the mortgagor under S. 72, T. P. Act, would lie: -- 'Venkataswamy Naicker v. Muthuswamy Pillai', AIR 1919 Mad 1102 (C).
The final decree in the mortgage suit having been passed and the payments made by the mortgagees to avert the revenue sales having been made thereafter it would be open to them to institute a separate suit particularly when the Court refused to award them relief in respect of such payments in the mortgage suit itself. In -- 'Manohar Das v. Hazari Mull', AIR 1931 PC 226 (D) it was held by the Judicial Committee that the holder of a final decree for sale a mortgaged property was entitled to maintain a separate suit to enforce a further charge against such property for payments made by him under S. 9, Bengal Revenue Sale Act to prevent a sale for arrears of Revenue which fell due after the passing of the final decree and while execution proceedings were pending.
It was no doubt held by the Allahabad High Court that a charge for expenses incurred and payments made by the mortgagee in order to avert a sale for arrears of land revenue or in order to protect the title of the mortgagor or mortgagee to the mortgaged property, could be recovered on the security of the mortgaged property only in the mortgage suit. In -- 'Ambikacharan v. Ramagati Guha', AIR 1915 Cal 369 (E) it was held by the Calcutta High Court that where a mortgagee after obtaining a preliminary decreeon his mortgage deposited a certain in execution of a rent decree, he could maintain a suit to enforce the lien against the property.
The reason given by their Lordships was that the lien acquired by the mortgagee by reason of his deposit for setting aside the rent sale was not discahrged by the payment and satisfaction of thepreliminary decree. In the present case, however, we have got the fact that the application of the moretgagees to include the amounts paid by them for averting the revenue sales as part of the decree asmount and for realisation of the said sum in execution of the mortgage decree, was rejected on the ground taht the proper remedy of the mortgagees was by way of a separate suit. This decision operates as res judicata and the contention of the appellants is unsustainable.
(8) Lastly, on the question of limitation, the apeal is devoid of merits. As early as -- 'Rajah of Vizianagaram v. Setrucherla Somasekharaz, 26 Mad 686 (F) it was held by a Full Bench of the Madras High Coiurt that where on of two or more co-sharers owing an estate subject to the payment of revenue to Government pays the whole revenue in order to save, and so does save, the estate from liability to be sold by Government for realising the arrears of revenue, he is by operation of law entitled to a charge upon the share of each of his co-sharers for the realisation of the latter's share of the revenue. Bhashyam Ayyangar J. held that the suit was governed by Art. 132, Limitation Act. in so far as it related to the enforcement of a charge.
Section 35, Madras Revenue Recovery Act (Act 2 of 1864) specifically provides that a mortgagee paying the arrears of revenue in order to obtain a release of the mortgaged proprty attached for arrears of revenue, has a charge upon the land for the amount so paid. In these circumstances, the appellants' contention that the claim of the mortgagees is barred by limitation must be overruled. The contention of the appellants that the payments made by the mortgagees to avert revenue sales of the hypotheca were voluntary payments is irrivolous.
(9) The result is that the appeal is allowed in respect of items 2 and 3 referred to above. The decree passed by the Court below in favour of the mortgagees in respect of item 1 and 4 representing the amount paid by them for averting revenue sales of the hypotheca will stand. The appeal is allowed in part to the extent indicated above and the parties will pay and receive proportionate costs both here and in the lower Court.
(10) Appeal partly allowed.