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Sachidanand Prasad Vs. Babu Sheo Prasad Singh - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1966SC126; 1965(0)BLJR841; [1966]1SCR158
ActsTransfer of Property Act - Sections 60
AppellantSachidanand Prasad
RespondentBabu Sheo Prasad Singh
Cases ReferredIn Basmat Devi v. Chamru Sao
Excerpt:
.....when sale is attributed to failure on his part to pay rent - appellants predecessor in interest mortgaged portion of rented properties to respondent's predecessor in interest - appellant and respondent failed to pay rent - properties sold on execution of rent decree - respondent purchased property - appellant filed suit for redemption of mortgage - trial court ordered for redemption - first appellate court partially allowed respondent's appeal - high court dismissed appellant's second appeal - appeal before supreme court - supreme court held, real effective cause of sale was default on part of mortgagor alone so section 90 of indian trusts act and illustration (c) to section 90 not attracted. - land acquisition act (1 of 1894)sections 23, 23(2), 23(1-a) & 34: [tarun chatterjee &..........in payment of rent forseveral years. the landlord obtained a decree for arrears of rent, and at therent sale held on june 18, 1934, the mortgage-defendant purchased the hichapurlands in the farzi name of dwarkalal. 2. the mortgage dated april 15, 1928 was in respect of 7.20 acres of landsin village utrain under kahas mahal. the mortgaged lands were part of a largerholding of 19.88 1/2 acres in khata no. 269. the rent of the entire holding wasrs. 155-4-0. the mortgage deed provided that the mortgagee would pay rs.68-10-9 out of the total rent and the balance rent would be payable by themortgagors. there was default in payment of rent for several years. certificateproceedings were started for the recovery of the arrears of rent, and at acertificate sale held on january 22, 1934, the utrain.....
Judgment:

Bachawat, J.

1. The plaintiffs-appellants instituted Title Suit No. 91 of 1950, out ofwhich this appeal arises, for redemption of two usufructuary mortgages createdby plaintiffs No. 1 and ancestors of plaintiffs Nos. 2 to 6 dated July 5, 1927and April 15, 1928 in favour of the defendant for Rs. 1,000 and Rs. 1,300respectively. The mortgage dated July 5, 1927 was in respect of 7.20 acres of occupancyraiyati lands, consisting of four plots Nos. 149, 155, 955 and 957, in villageHichapur under the Tikari Raj. The mortgaged lands were part of a largerholding of 23.69 acres under khata No. 59, and the annual rent of the entireholding was Rs. 153-3-0. The mortgage deed provided that the mortgagee wouldpay Rs. 33-14-9 out of the total rent payable to the landlord and themortgagors would pay the balance rent. There was default in payment of rent forseveral years. The landlord obtained a decree for arrears of rent, and at therent sale held on June 18, 1934, the mortgage-defendant purchased the Hichapurlands in the farzi name of Dwarkalal.

2. The mortgage dated April 15, 1928 was in respect of 7.20 acres of landsin village Utrain under kahas mahal. The mortgaged lands were part of a largerholding of 19.88 1/2 acres in khata No. 269. The rent of the entire holding wasRs. 155-4-0. The mortgage deed provided that the mortgagee would pay Rs.68-10-9 out of the total rent and the balance rent would be payable by themortgagors. There was default in payment of rent for several years. Certificateproceedings were started for the recovery of the arrears of rent, and at acertificate sale held on January 22, 1934, the Utrain lands were purchased bythe defendant in the farzi name of Deonarain.

3. It appears that out of the sum of Rs. 33-14-9 payable by the mortgageeannually on account of the rent of the Hichapur lands, the mortgageeconsistently paid Rs. 33 annually, but did not pay the balance sum of 14 annas9 pies, whereas the mortgagors consistently defaulted in payment of the sum ofRs. 119-4-3 payable by them annually on account of the total rent. It alsoappears that out of the sum of Rs. 68-10-9 payable by the mortgagee annually onaccount of the rent of the Utrain lands, the mortgagee consistently paid Rs. 68annually but did not pay the balance sum of 10 annas 9 pies, whereas themortgagors consistently defaulted in payment of the sum of Rs. 86-9-3 payableby them annually on account of the total rent.

4. The trial Court decreed the suit. The first appellate Court allowed theappeal in part, passed a decree for redemption of 3.93 acres of plot No. 955only on the ground that this portion of the land was not sold at the rent saleand gave leave to the defendant to withdraw Rs. 1,000 deposited by theplaintiff in respect of the mortgage dated July 5, 1927. The High Courtdismissed a second appeal preferred by the plaintiffs. The plaintiffs nowappeal to this Court by special leave.

5. The plaintiffs contend that the purchases at the rent sale and thecertificate sale were made by the mortgagee by availing himself of his opinionas such and having regard to s. 90 of the Indian Trusts Act and Illustration(c) to it, the purchases endured for the benefit of the plaintiffs and they areentitled to redeem the entire mortgaged lands. The defendant-mortgagee disputesthis contention, and claims that the aforesaid sales extinguished the equity ofredemption.

6. Section 90 of the Indian Trusts Act and Illustration (c) to it are asfollows :

'Where a tenant fore life,co-owner, mortgagee or other qualified owner of any property, by availinghimself of his position as such, gains an advantage in derogation of the rightsof the other persons interested in the property, or where any such owner, asrepresenting all persons interested in such property, gains any advantage, hemust hold, for the benefit of all persons so interested, the advantage sogained, but subject to repayment by such persons of their due share of theexpenses properly incurred, and to an indemnity by the same persons againstliabilities properly contracted, in gaining such advantage. ......

(c) A mortgages land to B, whoenters into possession. B allows the Government revenue to fall into arrearwith a view to the land being put up for sale and his becoming himself thepurchaser of it. The land is accordingly sold to B. Subject to the repayment ofthe amount due on the mortgage and of his expenses properly incurred asmortgagee, B holds the land for the benefit of A.':

7. In Basmat Devi v. Chamru Sao (1) : [1964]7SCR633 , a part of oneentire holding was mortgaged, both the mortgagor and the mortgagee were liableto pay the rent of the holding, both of them defaulted in payment of the rent,the default of both contributed to the passing of a rent decree and the sale ofthe holding in execution of the decree, the default of the mortgagee beingsubstantial, and the mortgagee purchased the holding at the execution sale. Onthese facts, this Court held that the mortgagee clearly gained an advantage byavailing himself of his position as such, and having regard to s. 90 of theIndian Trusts Act his purchase must ensure for the benefit of the mortgagor,and the mortgagor was entitled to redeem the mortgaged property. In that case,Das Gupta, J. observed :

'Whether this would be true even where the portionwhich the mortgagee is liable to pay is so very small that the property is notordinarily likely to be brought to sale for that amount, it is unnecessary forus to decide in the present case.'

8. The question left open by Das Gupta, J. arises for decision in thepresent case. This is a case where the mortgaged property is part of a largerholding, the mortgagee agreed to pay a portion of the rent of the entireholding, and the mortgagors agreed to pay the balance rent payable in respectof it. The mortgagors defaulted in payment of the rent payable by them. Themortgagee paid almost the entire amount of the rent payable by him but defaultedin payment of a trifling sum. The portion of the rent which the mortgageefailed to pay is so small that it is impossible to say that the property wasbrought to sale for it or that his default was in any real sense a contributorycause of the sale of the property. It is not shown that non-payment of thetrifling sums by the mortgagee was made mala fide or with the ulterior objectof the property being put up for sale and his becoming the purchaser of it. Themortgagee did not gain any advantage by availing himself of his position assuch or of a situation brought brought about by his own default. The realeffective cause of the sale was the default of the mortgagors alone. In thecircumstances, s. 90 of the Indian Trusts Act and Illustration (c) to it are notattracted, and the purchase by the mortgagee does not enure for the benefit ofthe mortgagors. The rent sale and the certificate sale extinguished the rightof redemption. Consequently, the suit by the mortgagors for redemption of themortgaged property is liable to be dismissed.

9. The first appellate Court, however, gave a decree for redemption of 3.93acres of plot No. 955 in Hichapur village and gave liberty to the mortgagee towithdraw the entire sum of Rs. 1,000 deposited by the plaintiffs in respect ofthe mortgage of the Hichapur lands. Before the High Court the plaintiffscontended, relying upon the last paragraph of s. 60 of the Transfer of PropertyAct, 1882, that they were entitled to redeem the aforesaid 3.93 acres of Utrainlands on payment of the proportionate amount of the mortgage money payableunder the mortgage dated July 5, 1927. The High Court negatived thiscontention. The Courts below observed that 3.93 acres of plot No. 955 of theHichapur lands were not sold at all at the sale held on June 18, 1934, butquite inconsistently, the Courts below also observed that the aforesaid saleheld on June 18, 1934 was a rent sale and was made in execution of a rentdecree. Learned counsel on behalf on both parties conceded before us that therecould be no rent sale in respect of a portion of the holding. It may be thatthere was a rent sale, and by mistake, the sale certificate omitted to mentionthe 3.93 acres of plot No. 955. The relevant documents are not printed in thepaper book. Having regard to the value of the subject-matter in dispute, it isnot worthwhile to call for a fresh finding on this point. We, therefore,indicated to counsel on both sides in course of the argument that we shalldecide this appeal on the footing that the sale held on June 18, 1934 was arent sale and the entire Utrain lands were purchased by the defendant at therent sale. On this footing, the last paragraph of s. 60 of the Transfer ofProperty Act, 1882 can have no application. The plaintiffs-appellants do not nowown the equity of redemption in any portion of the Hichapur lands. The Courtsbelow, therefore, should have dismissed the entire suit for redemption, and thequestion of redemption of a portion of the property on payment of aproportionate amount of the mortgage money does not properly arise in thiscase. However, the first appellate Court gave a decree for redemption of theaforesaid 3.93 acres of land. The High Court affirmed this decree, and there isno cross-appeal by the defendant-respondent. In the circumstances, the decreepassed by the Court below must be maintained.

10. In the result, the appeal is dismissed with costs.

11. Appeal dismissed.


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