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Sant Ram Lalji Ram Vs. Bhagwat Dass and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtPunjab and Haryana High Court
Decided On
Case NumberFirst Appeal No. 186 of 1950
Judge
Reported inAIR1958P& H309
ActsTransfer of Property Act, 1882 - Sections 58, 67 and 98
AppellantSant Ram Lalji Ram
RespondentBhagwat Dass and ors.
Appellant Advocate I.D. Dua,; K.C. Nayar and; H.L. Mital, Advs.
Respondent Advocate S.D. Bahri and; A.L. Bahri, Advs.
DispositionAppeal dismissed
Cases ReferredNarayana Murthi v. Nilambara Prudhvisinghi Santo
Excerpt:
.....them effected themselves and whatever expenses they will incur, i shall pay them along with the mortgage money at the time of redemption. where a mortgage deed shows clearly that it contains a per-sonal covenant under which the mortgagor undertook to pay the mortgage money on the due date, the personal covenant carries with it, by necessary implication, a power of sale. the fact that the mortgage-deed authorises the mortgagee in case of default to enter into possession of the mortgaged property, cannot take away the power of sale implicit in the personal covenant more particularly when it has been found that the mortgagor failed to put the mortgagee in possession. the judgment in the case is very short and the facts of the case are not clearly stated in the judgment. the mortgagor had..........in village saifabad, tahsil phillaur, district jullundur, for a sum of rs. 8,000/- by means of a mortgage deed executed on 10th april, 1947 and registered on 11th april, 1947. the deed inter alia provided that the mortgage was to be without possession but later on it provided as under :--'the land mortgaged shall remain in my possession. i shall pay interest on the mortgage money to the mortgagees, year after year, at the close of the year, after calculating the same at the rate of -/6/- per cent., per mensem. i will pay the principal mortgage money with interest within a year. in case i do not make payment as agreed or beyond that period, the mortgagees, aforesaid, will be competent in future either to realise interest at the rate of -/8/- per cent., per mensem or get possession of.....
Judgment:

K. L. GOSAIN, J.

1. This is an appeal by the defendant-mortgagor against a preliminary decree for sale of the mortgaged property passed by Shri Gurba-chan Singh, Subordinate Judge 1st Class, Jullundur on 8th May, 1950, and the only point which arises for decision is whether on the terms of the mortgage in question a decree for sale could legally be passed.

2. Sant Ram defendant-appellant made a mortgage of one-half of his agricultural land measuring 121 kanals 4 marlas situate in village Saifabad, Tahsil Phillaur, District Jullundur, for a sum of Rs. 8,000/- by means of a mortgage deed executed on 10th April, 1947 and registered on 11th April, 1947. The deed inter alia provided that the mortgage was to be without possession but later on it provided as under :--

'The land mortgaged shall remain in my possession. I shall pay interest on the mortgage money to the mortgagees, year after year, at the close of the year, after calculating the same at the rate of -/6/- per cent., per mensem. I will pay the principal mortgage money with interest within a year. In case I do not make payment as agreed or beyond that period, the mortgagees, aforesaid, will be competent in future either to realise interest at the rate of -/8/- per cent., per mensem or get possession of the land mortgaged, in lieu of the principal money with interest. When the mortgagees enter into possession, interest will cease to run.

They may then either cultivate the land themselves or give it to another person for cultivation. The Government revenue shall be paid by the mortgagees. I will be responsible to effect repairs to the well. If I fail to do so, the mortgagees, aforesaid, may get them effected themselves and whatever expenses they will incur, I shall pay them along with the mortgage money at the time of redemption. I will then get the land, aforesaid, redeemed. ....... ......

Hence, I have, of my own accord, while in the enjoyment of my senses and without coercion on the part of anybody else, executed this mortgage-deed without possession, so that it may serve as an authority.'

Mr. Inder Dev Dua. learned counsel for the appellant, contends, that on the terms the mortgage must be construed as an anomalous mortgage and that a decree for sale cannot be passed in the case of a mortgage of this type. We have carefully considered the terms of the mortgage, but we are of the opinion that the mortgage is nothing more than a simple mortgage and that a right of sale must be deemed to have been im-pliedly given to the mortgagee. It is expressly stated that the mortgage was to be without possession. The mortgagor expressly agreed to repay the mortgage money along with interest at the rate of six annas per cent., per mensem. The mortgagees were given two options in the case of default in payment of the principal amount and interest by the mortgagor. According to one they could recover the money along with interest at the rate of eight annas per cent., per mensem instead of six annas per cent., per mensem as originally agreed. According to the other option they could get possession of the land mortgaged in lieu of the principal money with interest. In case they exercise the second option, the interest was to cease to run. The mortgagees were not bound to get possession of the mortgaged property because the matter was left only in their option, it is admitted in this case that the mortgagees never got possession and the mortgagor therefore remained liable to pay the principal money with interest at eight annas per cent., per mensem. The mortgage therefore remained a simple mortgage and the right to get the property sold must be deemed to be implicit in the terms of the mortgage deed itself. In Ram Lochan prasad v. Mst. Ram Raji, ILR JO Luck 10: (AIR 1934 Oudh 255) (A), it was observed by a Division Bench of the Lucknow Bench of the Allahabad High Court as under:

'It is not necessary for a simple mortgage that there should be an express provision giving the mortgagee a power of sale. Where a mortgage deed shows clearly that it contains a per-sonal covenant under which the mortgagor undertook to pay the mortgage money on the due date, the personal covenant carries with it, by necessary implication, a power of sale. The fact that the mortgage-deed authorises the mortgagee in case of default to enter into possession of the mortgaged property, cannot take away the power of sale implicit in the personal covenant more particularly when it has been found that the mortgagor failed to put the mortgagee in possession. Such a mortgage is a simple mortgage and is not an anomalous mortgage within the terms of Section 98 of the Transfer of Property Act and a decree for sale passed on its basis is correct.'

3. In Sochet Singh v. Hadayat Ullah, ILR 13 Lah 508: (AIR 1932 Lah 630) (B), the defendant had borrowed money from the plaintiff and had mortgaged his land by way of security for its payment. The mortgagor was to remain in possession and pay interest twice every year. In case of default the mortgagee was authorised to take possession. A suit was instituted for the recovery of principal and interest due on the mortgage and the defendant inter alia pleaded that the mortgagee was not entitled to have the property sold because of the reason that he was entitled to take possession of the mortgaged property according to the terms of the deed. It was held by a Division Bench of the Lahore High Court that the mortgage must be termed as a simple one and that the mortgagee was entitled to a decree for sale. To the same effect are Puna v. Laxman Prasad, 65 Ind Cas 654 (Nag) :(C) and Lingam Krishna v. Manya Sultan, 10 Ind Cas 272 (PC) (D).

4. Mr. Dua relies upon a ruling, Narayana Murthi v. Nilambara Prudhvisinghi Santo AIR 1928 Mad 226 (1) (E), and urges that a right of sale cannot be implied in the terms of a mortgage where the mortgagee is to be in possession till the mortgage is discharged. The judgment in the case is very short and the facts of the case are not clearly stated in the judgment. It appears that the mortgagee in that case had not been given any option of getting into possession or treating the mortgage as a simple one and this ruling is therefore inapplicable to the facts of the present case.

5. Even if the mortgage were to be treated as an anomalous mortgage, the rights and liabilities of the parties will have to be determined by the contract as evidenced in the mortgage deed. Section 98 of the Transfer of Property Act provides as under--

'In the case of an anomalous mortgage, the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage deed, and so far as such contract does not extend, by local usage.'

As observed in the earlier part of this judgment, the contract as evidenced by the mortgaged deed in the present case impliedly gives the mortgagees a right to recover the money and to have the property sold for that purpose. The mortgagor had clearly undertaken to repay the amount with interest and in case this amount was not paid, the mortgagees were entitled to file a suit for the recovery of the money and to have the property sold. We are of the opinion that a right is available to the mortgagees in the present case to have the property sold.

6. No other point is urged.

7. In the result, the appeal fails and Is dismissed with costs.

A.N. Grover J.

8. I agree.


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