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Piyare Lal Vs. Hasan Ahmad - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad
Decided On
Reported inAIR1936All708; 165Ind.Cas.402
AppellantPiyare Lal
RespondentHasan Ahmad
Excerpt:
- - in the case before me the findings of fact are not clearly stated, but it would appear that the mortgagee leased the whole of the mortgaged property to the mortgagor and that the kabuliat executed by the latter was in respect of the whole property mortgaged. they had to determine whether, under particular circumstances, the remedy of a particular mortgagee was or was not confined to a suit for sale upon his mortgage and whether or not it was open to him, at least as an alternative relief, to obtain a simple money decree, by way of arrears of rent or the like against his mortgagor. the point really cannot be better put than it is put in the learned subordinate judge's judgment where he says:.....and whether or not it was open to him, at least as an alternative relief, to obtain a simple money decree, by way of arrears of rent or the like against his mortgagor. no question could be raised under the law as it then stood as to the right of the mortgagee to execute such decree, when obtained, by attachment and sale of the mortgaged property.3. after discussing certain other cases the learned judge at p. 407 proceeds:the provisions of the transfer of property act assume that a person in whose favour a contract of usufructuary mortgage has been entered into has either been put in possession of the mortgaged property or has not. in the latter event he would have a right to sue for his money under section 68, clause (c), t.p. act (no. 4 of 1882). in the former event it is presumed.....
Judgment:

Harries, J.

1. This is a decree-holder's second appeal against an order of the lower appellate Court reversing the order of the Court of first instance which disallowed the judgment-debtor's objection. The facts of the case are brief and can be stated as follows: On 3rd November 1909 the judgment-debtor effected a usufructuary mortgage of certain zamindari property in favour of the present decree-holder. On the same date the mortgagee, now the decree-holder, leased the mortgaged property to the mortgagor and at the same time the latter executed a kabuliat by which he agreed to pay a certain rental for the property. The mortgagor, now the judgment-debtor, fell into arrears during the years 1334 to 1336-F, and on 15th November 1929 the mortgagee, now the decree holder, obtained a decree for the arrears of rent. On 3rd February 1930 he applied to eject the judgment-debtor and later sought to attach the judgment-debtor's equity of redemption and to have the same put up for sale. The judgment-debtor objected, but this objection was disallowed by the Court of first instance. On appeal the lower appellate Court reversed the order of the Court of first instance and allowed the judgment-debtor's objection holding that the decree-holder was barred from seeking the sale of the judgment-debtor's, equity of redemption by reason of the provisions of Order 34, Rule 14, Civil P.C. The learned District Judge has relied upon the case in Kadma Pasin v. Muhammad Ali 1919 41 All 399, In that case the property comprised in a usufructuary mortgage consisted of (1) a fixed rate holding and (2) a right to receive certain offerings at a temple.

2. Inasmuch however, as the mortgagee was a Mahomedan, a subsequent agreement was entered into between the parties whereby the mortgagor bound her. self to pay annually a fixed sum of money in lieu of the offerings, and also, in case of default, to pay interest thereon. Default having been made, the mortgagee sued on this agreement and obtained a decree for money against the mortgagor. In execution of this decree he attached the mortgaged property and sought to have it sold. Upon objection by the mortgagor judgment-debtor, a Bench of this Court held that the mortgagee could not bring the mortgaged property to sale in execution of the decree, as the claim under the subsequent agreement was one arising under the original contract of mortgage within the meaning of Order 34, Rule 14, Civil P.C. In the case before me the findings of fact are not clearly stated, but it would appear that the mortgagee leased the whole of the mortgaged property to the mortgagor and that the kabuliat executed by the latter was in respect of the whole property mortgaged. It has been argued that the kabuliat must refer to only part of the property namely sir land because it is stated in the judgment of the learned District Judge that 'it is admitted that by operation of law appellant became an ex. proprietary tenant of the land in dispute.' The findings of fact of the lower appellate Court have not been challenged and I am bound to hold that the judgment means that the whole of the property mortgaged was leased to the mortgagor and that the kabuliat refers to the whole property. In my judgment this case is concluded by the case in Kadma Pasin v. Muhammad Ali 1919 41 All 399 to which I have referred. It has been strenuously argued by Mr. Pandey that the present case can be distinguished from the Bench decision upon the facts, but in my view the law as laid down in Kadma Pasin v. Muhammad Ali 1919 41 All 399 compels me to hold that the decree-holder in this case cannot proceed to sell the equity of redemption in execution of the decree which he has obtained for arrears of rent. In Kadma Pasin v. Muhammad Ali 1919 41 All 399 , Piggott, J., observed at p. 405:

It must be remembered that there has been an alteration in the law since the provisions of Order 34, Rule 14 of the present Civil Procedure Code (Act No. 5 of 1908) were substituted for those of Section 99, T.P. Act (No. 4 of 1882). It is, therefore, of very little use to refer to rulings anterior in date to this change in the law. For instance there has been considerable controversy before us as to the bearings on the present case of the principles laid down by learned Judges of this Court in two cases, one reported in Altaf Ali Khan v. Lalta Prasad (1897) 19 All 496 and the other in Chimman Lal v. Bahadur Singh (1901) 23 All 338. The former case is relied upon by the appellant and the latter by the respondent. It seems sufficient to say that both these cases were decided at a time when the mortgagee could in no event have brought the mortgaged property to sale in execution of a decree for the satisfaction of any claim, whether arising under the mortgage or not. The question which we have now to consider was, therefore, not present to the minds of the learned Judges who decided those two cases. They had to determine whether, under particular circumstances, the remedy of a particular mortgagee was or was not confined to a suit for sale upon his mortgage and whether or not it was open to him, at least as an alternative relief, to obtain a simple money decree, by way of arrears of rent or the like against his mortgagor. No question could be raised under the law as it then stood as to the right of the mortgagee to execute such decree, when obtained, by attachment and sale of the mortgaged property.

3. After discussing certain other cases the learned Judge at p. 407 proceeds:

The provisions of the Transfer of Property Act assume that a person in whose favour a contract of usufructuary mortgage has been entered into has either been put in possession of the mortgaged property or has not. In the latter event he would have a right to sue for his money under Section 68, Clause (c), T.P. Act (No. 4 of 1882). In the former event it is presumed that he would be in lull enjoyment of all his rights in respect of the usufruct of the mortgaged property. Difficulties may arise, however, in applying this principle where the mortgagor has entered into a subsidiary agreement with the usufructuary mortgagee so that it may be said that the mortgagee is constructively in possession by virtue of his subsidiary contract with the mortgagor, but the latter is nevertheless withholding from the mortgagee the money which he had covenanted to pay. I think that this is a risk which a usufructuary mortgagee must be content to run when he chooses to enter into a transaction, the effect of which is to replace the mortgagor in actual possession over the mortgaged property, or any part of it. There is nothing in law to prevent the parties to a mortgage from entering into such an agreement, but the fact that the mortgagor has become liable for reason of such subsidiary contract to make certain payments to the mortgagee does not affect the consideration that the money so agreed to be paid represents the usufruct of the property to which the mortgagee was entitled by virtue of the possessory mortgage in his favour. If the mortgagee chooses to enter into a contract of this nature and the mortgagor fails to carry out his part of such contract, the remedy of the mortgagee is to obtain a simple money decree for the money due to him. I think, however, that it would be doing violence both to the letter of Order 34, Rule 14, Civil P.C., and to the principle on which that rule is based, to allow the mortgagee to take advantage of a decree of this nature in order to bring to sale the equity of redemption and deprive the mortgagor of his rights to redeem the original mortgage. The Courts are bound to hold that the money in respect of which the decree was passed represents in substance, the usufruct of the mortgaged property, and that the claim to it was a claim arising under the mortgage.

4. At p. 410, Walsh, J. observes:

The point really cannot be better put than it is put in the learned Subordinate Judge's judgment where he says: 'It seems to me to be drawing an unjustifiably subtle distinction to say that the claim arose, not under the mortgage, but under the separate agreement, when that agreement was made as a direct consequence of the mortgage, and as a means of giving effect to the conditions of the mortgage.

5. In the present case the kabuliat was executed as a direct consequence of the mortgage and was a means of giving effect to the conditions of the mortgage. With-out this subsequent lease and kabuliat the mortgagee would have remained in possession of the property and would have taken the usufruct thereof. By the subsequent arrangement the mortgagor remained in possession and thus deprived the usufructuary mortgagee of the usufruct of the property. The subsequent arrangements gave the mortgagee a certain rent in lieu of the usufruct which the usufructuary mortgage standing by itself gave him a right to receive. The subsequent lease and kabuliat were, in my view, made as a direct consequence of the mortgage and as a means of giving effect to it. The rent payable by the mortgagor represented in substance the usufruct of the mortgaged property and that being so any claim to such rent was a claim arising under the mortgage.

6. Mr. Pandey has strenuously argued that the case before me is covered by two Bench decisions of this Court, viz., Chimman Lal v. Bahadur Singh (1901) 23 All 338 and Second Appeal No. 1112 of 1894, which is reported in a footnote to pages 341 to 345 of Chimman Lal v. Bahadur Singh (1901) 23 All 338. These cases were considered by the Bench which decided Kadma Pasin v. Muhammad Ali 1919 41 All 399 to which I have referred. Piggott, J. points out that since the decision of the two former cases the law has been changed and further that in neither case did the learned Judges have to consider whether or not the mortgagee could in the circumstances existing in Kadma Pasin v. Muhammad Ali 1919 41 All 399 and in the present case execute his decree by selling the mortgagor's equity of redemption. In my view sitting as a single Judge, I am bound by the latter decision in Kadma Pasin v. Muhammad Ali 1919 41 All 399, and, therefore, I hold that the arrears of rent in respect of which the decree was passed represented in substance the usufruct of the mortgage property and that the decree was a decree which the mortgagee had obtained for the payment of money in satisfaction of a claim arising under the mortgage. That being so, he could not by reason of the provisions of Order 34, Rule 14 attach the property and put the same up for sale. In my view the lower appellate Court came to a right conclusion in this case and consequently I dismiss this appeal with costs. A number of conflicting decisions of other Courts have been cited to me and this appears to be a case in which leave to appeal under the Letters Patent should be granted. Leave to appeal is accordingly granted.


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