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Mazhar Ali Khan Vs. Bhagwan Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Judge
Reported in(1914)ILR36All272
AppellantMazhar Ali Khan
RespondentBhagwan Singh and ors.
Excerpt:
.....code (1908), order xxi, rule 89. - - they paid that ^amount, and were entitled to realize that sum as well as the amount due to them, the total of which was rs. he said that out of the total amount which bad been deposited in full satisfaction of the decree and the 5 per cent, paid to the auction purchasers and the sale-fee, he bad paid rs. the court below also in deciding the case declared the defendants liable for the amounts for which they had purchased parts of the property, and has wholly, as it appears to us, failed to take into consideration the principles of the rule laid down in section 82 of the transfer of property act. this is clearly wrong......mortgagees, whose mortgage was a usufructuary mortgage, granted to the mortgagor a lease of the mortgaged property and for securing the payment of the rent reserved by the lease the mortgagors granted a second mortgage of their property to the mortgagees. a part of the mortgaged property, namely, the zammdari share in the village of adampur was taken away by a pre-emptor, and it seems to be the common case of the parties that this part of the mortgaged property was no longer to be regarded as part of the mortgage security. the present plaintiff purchased one of the mortgaged villages, namely, champauli, and roshan singh (the predecessor in title of the defendants, nos. 1-6) purchased maharana and milk adampur. the total amount of consideration for these two purchases was ea. 11,000,.....
Judgment:

Henry Richards, C.J. and Pramada Charan Banerji, J.

1. This and the connected appear arise out of a suit for contribution brought by the plaintiff, Mazhar Ali Khan. The claim appears to have been brought on a wrong principle and the parties went to trial on a mistaken idea of the principle which governs suits of this description, It appears that on the 14th of March, 1889, one Musammat Kundan made a mortgage of eleven items of property in favour of Muhammad Bakhsh and Khuda Bakhsh, On the 15th of March, 1889, the mortgagees, whose mortgage was a usufructuary mortgage, granted to the mortgagor a lease of the mortgaged property and for securing the payment of the rent reserved by the lease the mortgagors granted a second mortgage of their property to the mortgagees. A part of the mortgaged property, namely, the zammdari share in the village of Adampur was taken away by a pre-emptor, and it seems to be the common case of the parties that this part of the mortgaged property was no longer to be regarded as part of the mortgage security. The present plaintiff purchased one of the mortgaged villages, namely, Champauli, and Roshan Singh (the predecessor in title of the defendants, Nos. 1-6) purchased Maharana and Milk Adampur. The total amount of consideration for these two purchases was Ea. 11,000, but this was not paid to the vendor. A suit for redemption of the usufructuary mortgage was brought by the purchasers and by Musammat Alim-un-nisea, to whom the interest of the mortgagor had passed, and a decree for redemption was obtained on the 13th of September, 1902, the amount of the mortgage money to be paid by the plaintiffs being declared to be Rs. 11,887-3-3. This sum appears to have been paid, and the plaintiffs in the redemption suit apparently got possession. Subsequently the original mortgagees, under the qahuliat executed in their favour on the 15th of March, 1889, brought a suit for arrears of the rent reserved by the lease granted by them, and they prayed for sale of the property hypothecated under the qahuliat to secure the proper payment of the rent. A decree was passed by the court directing the plaintiffs to that suit to pay into court the amount of the redemption decree, namely, Rs. 11,887-3-3 as a condition precedent to their obtaining a right to sell the hypothecated property. They paid that ^amount, and were entitled to realize that sum as well as the amount due to them, the total of which was Rs. 18,289-5-4, by sale of the hypothecated property-Part of this sum was paid into court in different amounts, but this did not satisfy the decree, and accordingly on the 20th of May, 1909, the villages of Champauli and Maharana and mango groves in Tashtpur (that is, properties Nos. 5, 6, 8 and 9 specified in the judgment of the court below) were sold by auction and were purchased by Home persons who are outsiders to this suit. The plaintiff deposited the amount for which the property had been put up to sale as also the 5 per cent, required to be paid to the auction purchasers under Order XXI, Rule 89, of the Code of Civil Procedure and the sale-fee, and the sale was set aside. Thereupon the plaintiff brought the suit out of which these appeals have arisen for contribution on the allegation that his property had had to bear more than its proportionate share of liability. In putting forward these matters what he claimed was this. He said that out of the total amount which bad been deposited in full satisfaction of the decree and the 5 per cent, paid to the auction purchasers and the sale-fee, he bad paid Rs. 14,346-3-3. Out of this sum he gave credit for Rs. 5,750, the amount of the consideration for the sale in his favour which he had not paid to his vendor and he claimed the balance from the defendants, the owners of the other properties ordered to be sold by the decree in the suit for arrears of rent to which we have referred above. He left out of consideration the proportionate amount of liability of his property for the mortgage which was given effect to by the decree aforesaid. The court below also in deciding the case declared the defendants liable for the amounts for which they had purchased parts of the property, and has wholly, as it appears to us, failed to take into consideration the principles of the rule laid down in Section 82 of the Transfer of Property Act. In a suit of this kind where several properties belonging to different persons are liable under the same mortgage and the owner of one of the properties discharges the mortgage, the owners of all the properties liable under the mortgage are bound to contribute their quota of liability for the mortgage-debt, Therefore in the present Case what the court ought to have done was to have determined the value of the several items of property now belonging to different owners. The value to be so ascertained should be the value at the date of the mortgage, and not necessarily the price which was paid for it by the present owners, After ascertaining the value of the different properties the court should have determined what was the rateable liability of each of the properties for the total amount of the mortgage-debt, that is, of the amount payable under the decree. The court must then ascertain how much each party has contributed to the payment of the decretal amount. In making this inquiry it ought to disregard the purchase-money which any of the purchasers may have paid or retained. The purchase money was money which belonged to the vendor, that is to say, the mortgagor, and it was only retained by the purchasers for the purpose of discharging the prior mortgage generally. Having ascertained the amount each property has contributed, the court should nest proceed to apportion the liability between the different properties. In so apportioning the liability each property must be debited with its own share of liability. We may illustrate this by an example. Suppose three properties A, B and C, belonging to different owners are comprised in one mortgage for Rs. 20,000. Property A is worth Rs. 20,000. Properties B and C are worth Rs. 10,000 each. The owner of property A pays off the entire mortgage. He can recover Rs. 5,000 from each of the other properties. Again suppose the properties all belong to the same owner. Property A is sold to X for Rs, 20,000, X retaining Rs. 10,000 out of the purchase money to meet his shares of the mortgage, Properties B and C are sold to other persons. X then pays off the entire mortgage. X can only recover Rs. 2,500, from each of the other owners. The mortgage-debt must be deemed to have been reduced by Rs. 10,000 by the mortgagor himself when he allowed X to retain Rs. 10,000 out of the purchase money. On this point we may refer the court below to the case of Hari Raj Singh v. Ahmad-ud-din Khan (1897) I. L. R. 19 All. 546. In the present case the court has not charged the plaintiff with any portion of the amount for which his own property is liable, but has made the defendants and their property liable not only for their own quota of the debt but also for the plaintiffs own share. This is clearly wrong. We may mention here also that when the court is ascertaining the amount which the plaintiff has contributed to the discharge of the mortgages, it will disregard the sum of Rs. 5,750, which the plaintiff himself admits he retained and has never applied in discharge of the mortgage.

2. Again, we find that the court below has included a sum of Rs. 610 and also Rs. 31, in all Rs. 647, being the 5 per cent. which had to be paid to the auction purchaser when the sale was set aside and the auction fees. These are not sums which would come under Section 82 of the Transfer of Property Act, and they could only be awarded against the defendants upon, the equitable ground of salvage. Under no circumstances could any portion of this sum be awarded against the defendants other than defendants Nos. 1-6 and 8 and 10, because their property was not sold. Again, we find that defendant No. 10 pleaded that he had purchased part of the mortgaged property, and that he had paid into court a sum of Rs. 628-12-0 as the amount rateably due from him. If upon ascertaining the liability of this defendant in the manner which we have directed it is found that the sum of Rs. 628-12-0 is sufficient to cover his liability the suit ought to be dismissed against him, and if it is not sufficient he ought at least to get credit for the amount so deposited or to be allowed to withdraw it- Similarly, if the amount paid by the plaintiff does not exceed the amount for which his property is rateably liable his suit should be dismissed. There are other matters to which, having regard to the order we intend to make, we do not think it necessary to refer. In our opinion there has been no proper trial of the suit and the case ought to be remanded for re-trial. We accordingly set aside the decree of the court below and remand the case with directions to readmit it under its original number in the register and re-try it, bearing in mind the observations made above. The parties will of course be entitled to adduce further evidence. Costs of this appeal will be costs in the cause. We hope that as we have settled the principle upon which the case ought to be proceeded with, the parties will be wise enough to come to a settlement without incurring the expenses of a fresh trial.


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