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Mahadeo and ors. Vs. Rameshsar Dayal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1935All150; 157Ind.Cas.364
AppellantMahadeo and ors.
RespondentRameshsar Dayal
Cases ReferredChotey Lal v. Mohnanian
Excerpt:
- - there as well as in the present case, the lease was not for the purpose of securing the payment of principal money advanced, but was only an arrangement for the payment of interest.orderbajpai, j.1. plaintiffs' suit for the recovery of a sum of rs. 200, due on a promissory note executed on 26th april 1929 has been dismissed by the small cause court judge of allahabad. the plaintiffs' allegation was that the defendant had executed a promissory note in 'their favour for rs. 300, that the interest on the promissory note had been regularly paid 'by reason of a contemporaneous transaction having been carried into effect and that rs. 100 towards principal had been paid and therefore the sum due to the plaintiffs was rs. 300. it is necessary to mention this contemporaneous transaction. it was a lease by the defendant of certain muafi plots of three bighas for a period of three years. the rent reserved was rs. 24 per bigha per year or rs. 72 for the entire land leased. the.....
Judgment:
ORDER

Bajpai, J.

1. Plaintiffs' suit for the recovery of a sum of Rs. 200, due on a promissory note executed on 26th April 1929 has been dismissed by the Small Cause Court Judge of Allahabad. The plaintiffs' allegation was that the defendant had executed a promissory note in 'their favour for Rs. 300, that the interest on the promissory note had been regularly paid 'by reason of a contemporaneous transaction having been carried into effect and that Rs. 100 towards principal had been paid and therefore the sum due to the plaintiffs was Rs. 300. It is necessary to mention this contemporaneous transaction. It was a lease by the defendant of certain muafi plots of three bighas for a period of three years. The rent reserved was Rs. 24 per bigha per year or Rs. 72 for the entire land leased. The interest on the bond was at the rate of Rs. 2 per cent per mensem and thus the interest also comes to Rs. 72 a year. The defendant covenanted that the plaintiffs would remain in possession of the three bighas and would not be bound to pay any rent to the defendant, but would be entitled to set it off towards the amount of interest that was payable by the defendant to the plaintiffs. The lease was for a period of three years. It appears that Rs. 100 was paid by the defendant to the plaintiffs and the latter gave up possession over one bigha.

2. The contention of the defendant was that the two transactions, namely, the promissory note and the lease have got to be considered together and that considering them together, they amount to a usufructuary mortgage and therefore the plaintiffs were not entitled to recover the principal amount as long as they were left in peaceful possession of the plots. Let it be noted that it was nobody's case that the plots leased were occupancy holdings or of such a nature that their transfer was in contravention of the provisions of the Tenancy Act. The Court below has accepted this contention and has come to the conclusion that as the plaintiffs have admitted that they are in possession of the two bighas of fields, their suit for recovery of money was not maintainable. In revision by the plaintiffs, it is argued that even though the two transactions may, when combined, resemble a usufructuary mortgage, but they do not amount to a usufructuary mortgage as contemplated by the Transfer of Property Act and therefore there was nothing to prevent the plaintiffs from bringing a suit for the recovery of the money due under the promissory note. Reliance was placed by learned Counsel for the applicant on the case of Chotey Lal v. Mohnanian 1930 All. 375. The facts of that case wore I very similar to the facts of the present case and in that case Niamatullah, J., held that:

the two transactions did not amount to a usufructuary mortgage and therefore the plaintiff was entitled to the principal duo on the foot of the note.

3. The ratio decidendi was that unless there was a transfer of an interest in the specific immovable property for the purpose of securing payment of money advanced, there can be no usufructuary mortgage. There as well as in the present case, the lease was not for the purpose of securing the payment of principal money advanced, but was only an arrangement for the payment of interest. I can sec therefore in bar to the plaintiffs' instituting the present suit for the recovery of the sum of Rs. 200. The result therefore is that I allow this application, set aside the decree of the Court below and decree the plaintiffs' suit with costs in both Courts.


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