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Ram Asray Vs. Hira Lal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1949All681
AppellantRam Asray
RespondentHira Lal
Excerpt:
- - it was also provided in the mortgage deed that the repairs would be done annually by the mortgagors but in case they failed to do so the mortgagee would be entitled to make them and to recover the cost of repairs at the time of redemption along with the mortgage money. in my opinion, the learned appellate court was perfectly justified in treating rs. both the courts below rejected this piece of evidence as unreliable. the learned lower court was not satisfied that rs. act, the respondent was clearly entitled to recover from the appellant the amount he paid towards the municipal taxes. 8. all the points raised and urged by the appellant have failed and the appeal is accordingly dismissed with costs......the sum of money he had spent on the repairs and this he calculated at a flat rate of rs. 10 per year for 25 years from 1915 to 1940. the learned lower appellate court also held that the rate of interest could not be reduced. it also held that although the mortgaged property had been demolished and rebuilt without authority or justification by the respondent, the appellant was entitled to the house without having to pay anything for the construction, but the appellant was not entitled to receive an account of the higher profits that may have been derived by the mortgagee from the property, and that in such circumstances the trial court was wrong in assessing the annual profits at rs. 60 instead of the agreed amount of rs. 20. as already indicated the learned appellate court directed.....
Judgment:

Chandiramani, J.

1. This is the plaintiff's appeal against the decree of Mr. Surendra Vikram Singh, Civil Judge, Unnao, dated 4th June 1942.

2. It appears that the appellant Ram Asray (who has died since the filing of the appeal and is now represented by his widow Mt. Sochana-Devi, his son, Radhey Lal and his daughter, Mt. Sukh Dei) and his brother Bhola mortgaged a certain kachcha house and ahata in the town of Unnao to one Mohan Lal on 19th March 1906, for Rs. 200. The rate of interest was 15 per cent, per annum simple. Under this deed the mortgagee was given possession of the property. It was specifically stated in the mortgage deed that the profits of the property shall be deemed to be Rs. 20 per year and, as the interest due on the loan would exceed the income derived from the property, the deficiency, that is, Rs. 10 would be paid in cash. It was also provided in the mortgage deed that the repairs would be done annually by the mortgagors but in case they failed to do so the mortgagee would be entitled to make them and to recover the cost of repairs at the time of redemption along with the mortgage money. Mohan Lal remained in possession till 17th September 1915, when he sold his entire mortgagee rights to Hira Lal, the respondent. In the year 1940 the appellant Ram Asray filed a suit for redemption alleging that the entire mortgage money had been paid off from the usufruct of the property and the property should be redeemed without any further payment by him. It was also alleged that the profits from the property were more than the interest. The respondent said that he had rebuilt the mortgaged property and made it entirely pacca at a cost of Rs. 2,322-5-6, and as he had spent money on repairs and had paid the water-tax and the house-tax the amount still due to him was Rs. 4,460-14-9. The trial Court held that the respondent was entitled to receive Rs. 493-15-3, and accordingly directed the plain-tiff to pay the same before he could get the property.

3. On appeal the learned District Judge held that the plaintiff could redeem the property on paying Rs. 1,463.12-3 provided he took the water pipe which had been laid in the house by the respondent, but if he did not wish to take that pipe then he should pay Rs. 1,437-5-0. The learned Judge held that the respondent was entitled to receive the amount which he paid as house-tax and as water-tax, that the respondent was entitled to receive also the sum of money he had spent on the repairs and this he calculated at a flat rate of Rs. 10 per year for 25 years from 1915 to 1940. The learned lower appellate Court also held that the rate of interest could not be reduced. It also held that although the mortgaged property had been demolished and rebuilt without authority or justification by the respondent, the appellant was entitled to the house without having to pay anything for the construction, but the appellant was not entitled to receive an account of the higher profits that may have been derived by the mortgagee from the property, and that in such circumstances the trial Court was wrong in assessing the annual profits at Rs. 60 instead of the agreed amount of Rs. 20. As already indicated the learned appellate Court directed the appellant to pay a higher amount of money than the trial Court had ordered for re-demption.

4. In this appeal it has been urged that the learned lower Court was not justified in ignoring the increased profits of the property as a result of the rebuilding of the property by the respondent. It would appear that in the trial Court it was held that on account of the new constructions the profits from the property would be Rs. 60 a year whereas according to the mortgage deed the profits from the property were Rs. 20 per year, and in this manner the respondent had Rs. 40 per year more than he was entitled to receive from 1925 or 1926 onwards up to the date of suit. It must be mentioned here that the cost of the reconstruction has not been allowed to the respondent. The new building is in fact an improvement and by no stretch of imagination can it be called an accession. The facts are that the old kachcha building was demolished and a new pacca building was constructed in its place. Section 63A (1) T. P. Act provides only that:

Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in oases provided for in Sub-section (2), be liable to pay the cost thereof.

Sub-section (2) only lays down the circumstances' under which the costs of the improvement can be recovered from the mortgagor. It says nothing about the profits that may have been realized by the mortgagee on account of his improvements. Neither in law nor on any other principle can the appellant in the present case claim the benefit of such additional income from the property as may have resulted from the improvement made by the mortgagee at his own cost which he is now under the existing law not able to recover. In my opinion, the learned appellate Court was perfectly justified in treating Rs. 20 only as the annual income of the property.

5. Another point urged in appeal was that the cost of repairs should not have been granted inasmuch as there was no proof of any such costs having been incurred and it was also said that according to Ex. A4 produced by the respondent there had been no repairs in the sambat years 1973, 1984,1985,1990,1991 and 1994. This contention of the learned Counsel is also not correct. It would appear that Ex. A4 was a document which was sought to prove that in certain years certain amount of monies had been spent on repairs. Both the Courts below rejected this piece of evidence as unreliable. In such circumstances it is not open to the appellant to rely on this evidence of the respondent which was not accepted by the Courts. The learned lower Court was not satisfied that Rs. 15 per year as claimed by the respondent had actually been spent. It nowhere held that no amount had been spent on repairs. In the circumstances which faced him the learned Judge thought that he would be able to find the amount of money spent on repairs by allowing at a flat rate of Rs. 10 per year and he held accordingly, and I am not prepared to hold that he acted wrongly.

6. It was also contended in appeal that the rate of interest Rs. 15 per cent, was excessive and should have been reduced. The question has been carefully considered by the learned lower Court. The loan was taken in the year 1906 and the security offered was a kachcha house worth Rs. 300 or Rs. 350. The rate of interest was simple. Cases are known where even much higher rates of interest have not been considered to be unreasonable or exorbitant. I do not see any reason why I should take a view different from that of the learned lower Court.

7. It was also contended in appeal that the mortgagee could not claim the house-tax and the water-tax which he paid to the municipality in respect of the mortgaged property in the absence of any contract. There was no dispute as to the amount of the tax payable. Under Section 76 (0), T. P. Act, a mortgagee while in possession is bound to pay in the absence of a contract to the contrary, out of the income of the property, the Government revenue, all other charges of a public nature and all rent accruing due in respect thereof during such possession, and any arrears of rent in default of payment of which the property may be summarily sold. The learned -counsel for the appellant contended that the charges of a public nature must be such that in default of payment of them the property may be summarily sold. This contention has no force and is opposed to the terms of Section 76 (c) itself. The learned Counsel for the appellant referred to Rajendra Prasad v. Bahuria Ratan Jota Kuer A.I.R. (3) 1916 Pat. 96, wherein it was held that:

The payment of a public charge for which a mortgaged property may not be summarily sold cannot be constituted a charge upon the property.

This was a case in which the question arose whether a mortgagee is entitled to add the expenses incurred for payment of road cess to the mortgaged security. It was held that he is not, because the liability is of the mortgagor and not of the mortgagee, and the utmost that could be sold was the equity of redemption of the mortgagor and not the security of the mortgagee, and Section 72, T. P. Act, contemplates such expenses as may be incurred for preservation of the security. It will be seen that the question in the above Patna case was entirely different from the question here where the liability to pay the municipal taxes is not only of the owner but also of the occupier, and under the Municipalities Act he liability for the tax is the first charge on the property under Section 177, Municipalities Act. In Kesho Ram v. Ram Lal Sahu A.I.R. (23) 1936 Pat. 312, it was held that:

Where the mortgagee in possession pays municipal taxes, and there is an agreement between the mortgagee and the mortgagor that the rent was to be set off against the principal and interest, he is entitled to set off the amount paid as municipal taxes in the mortgage accounts so that he can remain in possession till the liquidation of the sum paid as taxes.

In the present case also, there was an agreement that the rents and profits from the property were to be set off against the interest and here also the municipal taxes were paid by the mortgagee. I have not the least doubt that in the express terms of Section 76 (c), T. P. Act, the respondent was clearly entitled to recover from the appellant the amount he paid towards the municipal taxes.

8. All the points raised and urged by the appellant have failed and the appeal is accordingly dismissed with costs.


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