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Chotey Lal Vs. Mt. Mohanian and anr. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtAllahabad
Decided On
Reported inAIR1930All375
AppellantChotey Lal
RespondentMt. Mohanian and anr.
Excerpt:
.....and interest, would be doomed satisfied at the end of five years. 11. the essential difference between a case where a creditor has been held not entitled to recover what he advanced and the one like the present is that, in the former the undartaking to repay a certain sum of money advanced by the plaintiff being an integral part of a void transaction, the creditor cannot recover, either on a persona1 covenant contained in the bond or otherwise; parties shall pay and receive costs in proportion to success and failure throughout......on the other, under which the latter borrowed rs. 127-8-0 from the plaintiff and passed a simple money bond in his favour and executed a lease subletting their occupancy land to the plaintiff's father for five years, the understanding being that the interest payable on the sum of rs. 127-8-0 advanced will be set off against the rent payable under the sublease. the learned judge of the court below is of opinion that the transaction, taken as a whole, amounts to a usufructuary mortgage of an occupancy holding. i am unable to endorse that view. under section 25, agra tenancy act (2 of 1601.), an occupancy tenant is permitted to sublet his holding for a term not exceeding five years. the transaction of sublease to the plaintiff's father not being for more than five years cannot, apart from.....
Judgment:

Niamatullah, J.

1. The plaintiff applicant brought the suit out of which this revision has arisen for recovery of Rs. 182-8-0 on foot of a bond, dated 9th June 1922, executed by the defendant respondents. The principal amount alleged to have been advanced under it was Rs. 127-8-0. Remaining sum represents the interest.

2. The defence was that the defendants borrowed Rs. 120 from the plaintiff and made over 18 bighas of their occupancy land to the plaintiff for five years for satisfaction of the loan evidenced by the bond in suit, which has been satisfied in full.

3. The learned Judge of the Court of Small Causes whose decree is sought to be revised, has held that Rs. 127-8-0 was advanced, as alleged by the plaintiff, that 18 bighas tenancy land was made over by the defendants to the plaintiff's father for five years and that the profits derived from the occupancy land were just sufficient to pay the interest. He held accordingly that the entire principal Rs. 127-8-0 was due. In his view the transaction substantially amounted to one of usufructuary mortgage of occupancy land and, therefore, void. The plaintiff was held not entitled to recover the amount due under the bond. The plaintiff has applied in revision.

4. The learned Judge of the Court below has accepted the evidence of one of the defendants in arriving at his finding of fact. He stated that a lease for five years was executed by the defendants in favour of the plaintiff's father and a bond bearing a date one and a half months after the lease was executed in favour of the plaintiff simultaneously with the lease. The learned Judge has disbelieved him in so far as he stated that the entire loan, principal and interest, would be doomed satisfied at the end of five years. The conclusion, therefore, arrived at by the learned Judge is this: There was an arrangement between the plaintiff and his father on the one hand and the defendants on the other, under which the latter borrowed Rs. 127-8-0 from the plaintiff and passed a simple money bond in his favour and executed a lease subletting their occupancy land to the plaintiff's father for five years, the understanding being that the interest payable on the sum of Rs. 127-8-0 advanced will be set off against the rent payable under the sublease. The learned Judge of the Court below is of opinion that the transaction, taken as a whole, amounts to a usufructuary mortgage of an occupancy holding. I am unable to endorse that view. Under Section 25, Agra Tenancy Act (2 of 1601.), an occupancy tenant is permitted to sublet his holding for a term not exceeding five years. The transaction of sublease to the plaintiff's father not being for more than five years cannot, apart from the loan transaction, be impugned as infringing any rule of law. The fact that the rent was agreed to be set off against the interest on money advanced or that it was associated with the transaction of loan will not make the subletting void, if it is otherwise valid. The mere fact that there was a loan advanced by the plaintiff to the defendants, who transferred to him (plaintiff) possession of his occupancy land for five years at a given rent, will not make the transaction a usufructuary mortgage, as defined in Section 58, T.P. Act. Reading the definition of mortgage with that of usufructuary mortgage, it is clear that, unless there is a transfer of an interest in specific immovable property for the purpose of securing payment of money advanced, there can be no usufructuary mortgage. In Nidha Sah v. Murli Dhar [1903] 25 All. 115 (at p. 119) their Lordships of the Privy Council construed an

instrument purporting to be a mortgage of them with possession to one Ishri Sah 'for a period of 14 years from 1234 Fasli to 1297 Fasli' by which it was provided that on the expiration of the term the mortgagor 'shall come in possession of the mortgaged villages without settlement of accounts... that on the expiration of the term... the mortgagee shall have no power whatever in respect of the said estate... and after the expiration of the term this mortgage deed shall bo returned to the mortgagor without his accounting for (paying) the mortgage money secured under this document'.

5. They held that

this instrument, though it is called a mortgage, and though it will be convenient to follow the nomenclature used in the document itself and in the pleadings and judgments in the Courts below, is not a mortgage in any proper sense of the word. It is not a security for the payment of any money or for the performance of any engagement. No accounts were to be rendered or requited. There was no provision for redemption expressed or implied. It was simply a grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances.

6. That was a much stronger case in so far as the whole transaction was embodied in one deed.

7. A transaction by which an occupancy tenant sublets his holding, coupled with an arrangement that the rent was to be appropriated in lieu of interest on a sum due to the subtenant, is not per so open to objection. The subtenant is liable to ejectment on the expiry of the term and cannot insist on retaining the land till the money is paid. A usufructuary mortgagee, on the other hand, is entitled to continue in possession till payment of his dues in full. Ho is not entitled to call in his money. In the case before me the bond and the lease do not refer to each other and, though executed at one and the same time, they were meant to be independent of each other. The bond is payable on demand, and there is nothing to prevent the creditor from recovering the money due under it at any time within the five years of the sublease.

8. My attention has been drawn by the learned advocate for the respondents to a number of cases in which claim to repayment of loan advanced under a transaction amounting to usufructuary mortgage of occupancy holding was disallowed. In Pooran Singh v. Jai Singh [1912] 17 I.C. 522, it was conceded by the plaintiffs that the intention of the parties was to enter into a transaction of usufructuary mortgage of the occupancy holding. In the case before ma it is not conceded but repudiated by the plaintiff. The circumstance that the parties kept the two transactions apart from each other as regards the rights and obligations of the parties to them and the fact that the plaintiff avoided being also the sublessee negative an intention to enter into a transaction of usufructuary mortgage.

9. Har Prasad Tiwari v. Sheo Gobind Tiwari A.I.R. 192 All. 134, was in form and substance a case of usufructuary mortgage of occupancy holding. The mortgages sued to recover the money due under the deed on foot of a personal covenant contained in the mortgage deed. It was held that such personal covenant could not be enforced, being part of a deed which evidenced a void transaction. That case can have no application to the circumstances of the one before me.

10. Ram Partap Rai v. Ram Phal Teli [1913] 18 I.C. 9 was a case in which the bond executed by an occupancy tenant provided that, in case interest from year to year was not paid, it was open to the creditor to take possession of the occupancy holding of the debtor. It was held that the bond could not bo enforced.

11. The essential difference between a case where a creditor has been held not entitled to recover what he advanced and the one like the present is that, in the former the undartaking to repay a certain sum of money advanced by the plaintiff being an integral part of a void transaction, the creditor cannot recover, either on a persona1 covenant contained in the bond or otherwise; while in the latter, the rights and liabilities arising out of the loan transaction and the sub-lease are separate and distinct and no part of the transaction can be considered to bo opposed to any provision of law, though the transaction as a whole may, in some particulars resemble a usufructuary mortgage.

12. For the foregoing reasons, I allow this revision and decree the principal amount of Rs. 127-8-0, found to be due by the Court below. Parties shall pay and receive costs in proportion to success and failure throughout.


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