Raman Nayar, J.
1. By Ext. B-39 dated 8-1-1935, the two plaintiffs, their since deceased father Subraya Bhatta, Subraya Bhatta's brother Shankernarayana Bhatta, and Shankernarayana Bhatta's sons and grandson, members of a then undivided Hindu joint family, usufructuarily mortgaged the properties described in schedules A1 and A2 to the plaint to the 1st defendant as the manager of his joint family for a sum of Rs. 11,000.
Under the terms of the document, the mortgage was redeemable in the Vishu Sankramana of the year 1965 on payment of the sum of Rs. 11,000 and the value of improvements effected by the mortgagee. Three years later, under Ex. B-1 dated 9-3-1938, one branch of the mortgagor's family, namely, Shankernarayana Bhatta's Branch sold its half share in the equity of redemption to the 1st defendant, and out of the consideration of Rs. 6,700 a sum of Rs. 5,500 went in discharge of half the mortgage money due under Ext. B-39.
By the partition deed, Ext. A-5 dated 25-2-1947, in the 1st defendant's family, the entire rights of the family in the properties comprised in Ext. 8-39 were allotted to the 1st defendant and his three sons, defendants 2 to 4, so that they become the full owners of an undivided half share in the property and held the remaining half share on usufructuary mortgage under Ext. B-39 for the reduced sum of Rs. 5,500.
In 1948 disputes arose between defendants 1 to 4 on the one side and the plaintiffs and their father (whom I shall compendiously call merely the plaintiffs) on the other, and, after the exchange of notices under Exts. A-2 and A-3 dated 15-2-1948 and 7-3-1948 respectively, the disputes were settled with the aid of mediators' and the partition deed, Ext. B-2, and the lease deed, Ext. B-3, both of the date of 22-6-1948, were drawn up accordingly.
Under the partition deed, Ext. B-2, the property was divided by metes and bounds into two equal shares. The first share comprising the properties described in schedule A2 to the plaint was allotted to defendants 1 to 4 and they became the full owners thereof. The second share, described in schedule A1 to the plaint, was allotted to the plaintiffs and they were to hold it subject to theusufructuary mortgage, Ext. B-39, for the rest of its term, namely, upto Vishu Sankramana of 1965, and were to redeem it on the due date on payment of the mortgage amount of Rs. 5500,
Meanwhile, for the rest of the term of the mortgage, they were to enjoy the property (viz., the property in Schedule A1 to the plaint and not in schedule A2 as wrongly stated in the plaint and in the judgment of the lower court) under the lease, Ext. B-3, entered into on the same day between themselves on the one hand and the 1st defendant on the other. Accordingly, the plaintiffs were in possession of the property in schedule A1 and defendants 1 to 4 of the property in schedule A2.
Then in March, 1949, the present plaintiffs their father had died meanwhile) filed O. P. 13/1949 under Section 83 of the Transfer of Property Act and, depositing a sum of Rs. 5500 into court, sought premature redemption of the mortgage over their property, viz., the property in schedule Al, taking advantage of the new Section 9A introduced into Madras Act IV of 1938 by Madras Act XXIII of 1948.
Defendants 1 to 4 having refused redemption, the plaintiffs filed their present suit praying for a decree, directing an account to be taken of the amount due under the mortgage, dated 8-1-1935 (Ext. B-39) as broken and split up by the purchase of the half share of the mortgaged properties by the mortgagee and as modified By the partition deed, dated 22-6-1948 (Ext. B-2), and declaring that a sum of Rs. 5500 alone is liable to be paid for redemption of the outstanding part of the plaint mortgage and further declaring that on payment of the said sum of Rs. 5500 which has already been tendered into court that the mortgage stands redeemed and directing defendants 1 to 4 to execute the necessary deed of reconveyance at the cost of the plaintiffs'.
2. Defendants 1 to 4 resisted the suit on three grounds :
(i) that the effect of Ext. B-2 was to create a new mortgage for Rs. 5500 upon the property in schedule Al to the plaint, that the old mortgage under Ext. B-39 thereby ceased to exist, that it was this new mortgage that had to be redeemed, and that the date of this new mortgage being the 22nd June, 1948, Section 9-A of Act IV of 1938 (introduced by Act XXIII of 1948 and amended by Act XXIV of 1950) which applies only to mortgages executed before the 30th September, 1947 could not avail the plaintiffs to claim redemption of the mortgage before the expiry of its term.
(ii) That while the property was in their possession, viz. between the dates of Ext. B-39 and Ext. B-3, they had effected improvements worth over Rs. 8000 and, in any event, redemption could be decreed only on payment of this sum in addition to the principal sum of Rs. 5500 and, (iii) that no rent whatsoever had been paid under the lease, Ext. B-3, and that the entire arrears of rent with interest thereon had to be paid before redemption,
3. Defendants 5, 6 and 7 were impleaded as persons who had some interest in the property. Of these the 6th defendant alone appeared to contest the suit. He claimed some right for himself and the 7th defendant as against defendants 1 to 4 by virtue of what he described as a sub-mortgage over the entire property covered by Ext. B-39 and asserted that the partition deed, Ext. B-2, was not binding on him and the 7th defendant. For the rest he supported defendants 1 to 4. No issue was however framed with regard to this special contention of the 6th defendant; nothing was said about it either at the trial or in the appeal (where the 6thdefendant has not chosen to appear); and defendants 5 to 7 may well be ignored.
4. The court below rejected all the contentions raised by defendants 1 to 4 (hereinafter referred to as the defendants) and gave the plaintiffs a declaration to the effect that the mortgage, Ext, B-39, stood redeemed by virtue of the deposit made by the plaintiffs in O. P. 13/1949, the property being however subject to the charge for arrears of rent due under Ext. B-3 in accordance with the terms of that document. The defendants have appealed, and they put forward the same contentions now as they put forward at the trial.
5. We shall first consider the contention of the defendants that Ext. B-2 created a new mortgage, the term of which is to expire only in Vishu 1965, that they hold under this mortgage and not under the original mortgage, Ext. B-39, which it replaced, and that this new mortgage having been executed after the 30th September, 1947 is not liable to premature redemption under Section 9-A of Madras Act IV of 1938.
The argument is that under Ext. B-2 the mortgage money was reduced by one half; the security was confined to the property shown in Schedule A1 to the plaint which is only a moiety of the property covered by Ext. B-39; and the contracting parties were divided branches of the two joint families that entered into Ext. B-39. The property mortgaged, the amount secured, and the contracting parties, are all different, and Ext. B-2 is therefore a new and different mortgage from Ext. B-39 in lieu of which it was executed.
6. The argument sounds plausible enough, but we do not think that it is sound. It seems to us that Ext, B-2 is nothing more or less than what it purports to be, namely, a partition of the land itself (or what the document calls the muli right as distinguished from the mortgage right) between the plaintiffs (who were the owners of one-half of the property) on the one hand, and the defendants (who by virtue of their purchase under Ext. B-1 dated 9-3-1938 had become the owners of the other half) on the other.
In setting out the rights and liabilities attaching to each share the document records the rights and liabilities under the mortgage, Ex. B-39, as those rights and liabilities stood by reason of the partition and prior acts of parties and by operation of law. The document is in no sense a new mortgage of the half share allotted to the plaintiffs. On the contrary it repeatedly asserts that the mortgage under Ext. B-39 is kept alive, and emphasises that the plaintiffs can hold the property allotted to them only subject to that mortgage.
The 1st defendant has no doubt given evidence to the effect that he was assured that the document was a fresh mortgage. But that is of no avail against the terms of the document, and it is significant to note that, apart from its being called a partition deed, the stamp duty and registration fees paid on that document are on the basis that it is a simple deed of partition and not on the basis that it effects a mortgage.
7. By virtue of their purchase under Ext. B-1 dated 9-3-1938, the family of the defendants (in other words, the mortgagee) became the owners of an undivided one half share of the mortgaged property. By this act there was a merger of the interests' of the mortgagor and the mortgagee in respect of that half share and by reason of Section 82 of the Transfer of Property Act (apart from the recitals in the document itself), an extinguishment of one half of the mortgage which thereafter attached only to the other half share. By the partition in their family under Ext. A-5 dated 25-2-1947, the defendants becamethe full owners, of an undivided half share of the property covered by Ext. B-39, now free of that mortgage and became also the owners of the mortgage right in the remaining one half.
Then, by reason of the partition under Ext. B-2 between themselves and the plaintiffs (who were the owners of the remaining one half still subject to the mortgage)'the defendants became the owners of the properties in Schedule A-2 to the plaint for their one half share, while the plaintiffs became the owners of the properties in Schedule A-1, subject to the mortgage which, thereafter, attached only to those properties. And as we shall presently see, this is all that Ext. B-2 says.
8. Ext. B-2 begins by saying that it is a deed of partition of immovable property between the defendants on the one hand and the plaintiffs on the other. Then it proceeds to recount the transactions in, and between, the two families with respect to the properties covered by Ext. B-39 from the time of its execution and to say that on the intervention of mediators, a compromise had been brought about between the parties in respect of the matters in dispute.
9. The essence of the compromise is thus stated:
'The future vaide (term) relating to the said mortgage deed No. 40 of 1935 (Ext. B-39) should be kept in force and the muli right of the said properties should be got divided into two equal shares.'
Then the document goes on to say that the 1st defendant on the one side and the plaintiffs on the other, should draw up a registered lease deed in respect of the property allotted to the share of theplaintiffs, subject to the said usufructuary mortgage and for the rest of its terms, namely, up to Vishu 1905; that the plaintiffs should enjoy the property up to that date as tenants; and that they should, on the due date, pay the mortgage amount of Rs. 5,500/-and redeem the mortgage, and thereafter enjoy the property by virtue of their title to that share.
Then the document states that the properly is divided into two equal shares with due consideration to good and bad soil, that the first share shall be enjoyed by the defendants by virtue of their purchase under Ext. B-1, and that the second share shall be enjoyed by the plaintiffs, to begin with subject to the terms of the usufructuary mortgage, Ext. B-39, and the terms of the registered lease deed to be executed and, later, after redemption of the mortgage as full owners by virtue of their title to the share. When it comes to the apportionment of the debts between the two shares, we find the recital that the mortgage amount of Rs. 5,500 and the value of improvements, payable under the registered usufructuary mortgage deed No. 40 of 1935 (namely Ext. B-39) on Vishu Sankramana of 1963, on the security of the property allotted to the share of the plaintiffs, shall be so paid by them to the defendants who it is repeated would be entitled to so realise the said mortgage amount and the value of improvements.
Tills clause is repeated in the schedule showing the properties allotted to each share, as an asset of the first share, namely, the share of the defendants, and as a liability of the second share, namely, the share of the plaintiffs. And it is this clause that, it is said, makes Ext. B-2 a fresh usufructuary mortgage in discharge of the liability under, and in replacement of Ext. B-39.
10. We might also mention that certain debts which, under the partition deed, Ext. A 5, in their family, were allotted to the defendants, are in like manner shown as liabilities attached to the first share, namely, the share allotted to the defendants.
11. Now, even if Ext. B-2 had said nothing about the liability under Ext. B-39, the position would have been just the same. That mortgage, as extinguished in respect of one-half of the mortgage money, and in respect of the undivided one-half share of the mortgaged property bought by the mortgagee under Ext. B-1 would still have attached, by way of substituted security, to the properties, allotted to the plaintiffs for their undivided one-half share of the mortgaged property.
The question then is whether Ext. B-2 attempts to make a new transfer by way of mortgage in place of the transfer effected by Ext. B-39. That it definitely does not. For, as we have seen, it repeatedly states that Ext. B-39 is kept alive, and that the plaintiffs are to hold the property allotted to then subject to the mortgage under Ext. B-39 for the rest of its term.
The transfer constituting the mortgage is still under Ext. B-39; there is no transfer under Ext. B-2: and a declaration of the liability of the plaintiffs under Ext. B-39, as that liability stood after the partition effected by Ext. B-2, can no more make a new mortgage than can the enumeration of the debts due by the defendants to third parties on the share of the property allotted to them. Nor can the fact that clue note was taken of devolutions in interest in the families of both the mortgagors and the mortgagees by reason of partitions and other incidents affect the position in any way.
12. The argument that, as a result of the mortgagee's purchase under Ext. B-1, the integrity of the mortgage was broken under Section 60 of the Transfer of Property Act or, to borrow the language of the plaint, to which pointed attention has been drawn, that that mortgage was 'broken and split up by the purchase of the half share of the mortgaged properties by the mortgagee,' does not carry the defendants any farther. What has happened here is not a splitting up of the mortgage into two; but an extinguishment of one-half of the mortgage.
But, even in a case where, by reason of a purchase by the mortgagee of a share in the property, the unextinguished portion of the mortgage becomes split up, thus enabling separate redemption by the remaining co-owners, the transfer effecting the mortgage would still be the original deed of mortgage and not the mortgagee's deed of purchase. In the present case, the transfer constituting the mortgage is under Ext. B-39 and in no sense under Ext. B-1 or Ext. B-2.
13. For the defendants, reliance is placed on the decisions in Ramasubbier v. Rama Iyer, AIR 1941 Mad 356, Venkateswarlu v. Venkatraju, AIR 1941 Mad 628, Tirunatirayolu v. Venkata Subba Rao, AIR 1950 Mad 287, Narayanaswami v. Perumal, AIR 1953 Mad 720 and Parukutti Amma v. C. B. Amma, AIR 1954 Mad 818. But we do not think that any of these decisions really helps them. Taking first the last mentioned decision, on whichgreatest reliance is placed, that was not a case like he present of a partial extinguishment of the mortgage, but a case where, by a decree to which the mortgagee was a consenting party, the property mortgaged was partitioned between its two co-owners and the mortgage debt apportioned between the two sets of properties,
It was held that, by reason of this transaction, what was originally one mortgage was, in effect and in substance, constituted into two distinct and separate mortgages so that the two owners of the separate portions of the divided property were no longer co-mortgagors and that therefore neither of them was any longer entitled to redeem the entire mortgage. The decision does not mean thatthe decree was, in fact, a deed creating the two mortgages, but only that the rights of the parties are to be worked out as if by the decree, which not merely broke the integrity of the mortgage but also apportioned the liability thereunder, the original mortgage was spot up into two different and separate mortgages.
Even so, if it were asked which was the deed by which the transfer constituting the mortgage in respect of these two so-called distinct and separate mortgages was effected, the answer would undoubtedly be that it was the original deed of mortgage and not the decree which effected no transfer from the mortgagor to the mortgagee, but only effected a partition of the property, and, (with the consent of the mortgagee) an apportionment of the mortgage debt as between the co-mortgagors.
14. The remaining cases need not be considered in detail. The three cases reported in AIR 1941 Mad 356, AIR 1941 Mad 628 and AIR 1950 Mad 287 are cases where there were fresh documents extinguishing the old debt, and creating a new debt under the ordinary law, and the question considered was whether the debt remained the same within the special meaning of the explanations to S. 8 of the Madras Act IV of 1938. That, in the circumstances considered in those cases, it was held that the fresh documents created new debts even within the special meaning of explanations, can have no bearing on a case where there is no fresh document creating a fresh debt.
15. The case in AIR 1953 Mad 720 only lays down that, where the integrity of a mortgage has been broken up by reason of the mortgagee acquiring a share in the property, the proper remedy for one of the remaining co-mortgagors is not to sue in redemption of the entire property, but to sue only for partition and redemption of his share. The courts at least in Madras have all along insisted on a partition of the mortgagor's share and redemption only of that share, in cases where the rest of the property has vested in the mortgagee. And we might remark that such a partition, which is a necessary preliminary to redemption, was all that was effected by the present parties when they entered into Ext. B-2.
16. We hold that the mortgage to be redeemed is Ext, B-39, and that it is liable to premature redemption under Section 9-A of the Madras Act IV of 1938.
17. We next come to the claim of the defendants for compensation on account of improvements. Such compensation is payable under the express terms of Ext. B-39. But the court below negatived the claim on two grounds; first that the allocation made to the plaintiffs and their father by the partition deed, Ext. B-2, was expressly free of any such liability; and second that there were, in fact, no improvements effected by the mortgagee.
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26. The only question remaining is whether, as contended by the defendants, the plaintiffs must pay not merely the mortgage money of Rs. 5500 and the sum of Rs. 3802-12-0 as compensation for improvements, but also the arrears of rent due under the lease, Ext. B-3, before obtaining redemption of the mortgage. We do not think that they are bound to do so. Under the terms of Ext. B-3 the arrears of rent up to a maximum of Rs. 6000 are made a charge on the equity of redemption held by the plaintiffs in the share allotted to them, namely, the property in schedule A1 to the plaint.
Under Section 61 of the T. P. Act, the plaintiffs are at liberty to redeem the mortgage and this charge either separately or together as they please. It was at first argued that there was a contract to the contrary within the meaning of this section. This contract is not to be found in Ext. B-3 which mentions only the mortgage money of Rs. 5500 and the value of improvements as payable at the time of redemption in Vishu 1965 and requires the rent to be paid on the stipulated dates every year.
It says nothing about the arrears of rent being payable as a condition for redeeming the mortgage, and the only safeguards provided against such arrears are the charge already referred to and a provision for forfeiture of the lease. A contract to the contrary was, however, sought in that clause of Ext. B-2 which requires the payment of the mortgage money and the value of improvements and the annual rent by the plaintiffs to the defendants.
There is reference to payment in one lump sum (at one and the same time, would perhaps bo a more correct translation of the original Kannada) by Vishu 1965, and it was argued on behalf of the defendants that this phrase applied not merely to the mortgage money and the value of the improvements but also to the rent. It was said that the official translation done in the Madras High Court according to which the lump sum payment does not cover the rent (which in fact is directed to be paid annually from 12-4-1948 onwards) was wrong, and certain observations in the judgment of the learned Subordinate Judge (who is a person familiar with Kannada) lent support to this contention.
Therefore, at the instance of the defendants, and with the consent of the plaintiffs, a fresh translation of Ext. B-2 was obtained from the Mysore High Court. That translation makes it clear that the lump sum payment mentioned in the document is only in respect of the mortgage money and the value of the improvements and does not apply to the rent accrued. In view of this, the contention that there was a contract to the contrary within the meaning of Section 61 of the Transfer of Property Act is no longer pressed.
27. It is nevertheless argued on the strength of the observation in Mulla's Transfer of Property Act, IVth Edition at page 413 that, 'if the usufructuary mortgagee leases the property to the mortgagor for a rent equivalent to the interest so that the lease and morgage are one transaction the mortgagor cannot redeem' without payment of arrears of rent', that the plaintiffs are bound to pay the entire arrears of rent due under Ext. B-31 before they can claim redemption of the mortgage.
The argument amounts to this: that whenever, as part of the same transaction, property which is usufructuarily mortgaged is leased back to the mortgagor, the rent accrued is really interest and automatically becomes a charge on the property, to be paid as part of the mortgage money at the time of redemption if it remains in arrear. And it is said that the decisions in Ramarayanimgar v. Govinda Krishna, AIR 1927 PC 32, Chinnappayan v. Narayana Pattar, AIR 1940 Mad 59 and Nanekeshwar Prasad v. Nand Gopal Ram, AIR 1943 Pat 282 lend support to this view.
28. We do not think that they do. But, before giving our reasons we might say that even if the proposition propounded on behalf of the defendants were to be accepted, that would not help them since, on our finding that there was no new mortgage under Ex. B-2, the lease under Ext. B-3 dated 22-6-1948 cannot be regarded as partof the same transaction as the mortgage under Ext. B-39 thirteen years earlier.
Next, with regard to the decisions relied upon, we might observe that the Privy Council case reported in AIR 1927 PC 32 proceeds on Section 61 of the Transfer of Property Act as it stood before the amendment of 1929 when, as observed at p. 36 of the report, that section enacted 'by implication that a mortgagor seeking to redeem shall not be entitled to do so without paying any money that may be due under a separate mortgage or charge, if the latter relates to the same property.
But, after the amendment of 1929, the section makes it amply clear that, in the absence of a contract to the contrary, a mortgagor is entitled to redeem two or more mortgages separately or together at his choice whether they relate to the same or to different properties. In the face of the new section the view taken in the Privy Council case is no longer the law.
29. The remaining two decisions concern themselves with Order XXXIV. Rule 14 of the Civil Procedure Code and have little bearing on the present question. For, it is one thing to say that a lease back as part of the same transaction is a machinery for realising the interest on the mortgage so that the rent due under the lease is a claim arising under the mortgage within the meaning of Order XXXIV Rule 14. It is quite another thing to say that it is, in fact, interest accrued on the mortgage and therefore payable at the time of redemption.
That would amount to saying that every usufructuary mortgage accompanied by a lease back is to be regarded as a simple mortgage. For this there is no warrant whatsoever. That a usufructuary mortgage accompanied by a lease back is often a device that ensures prompt payment of interest in the shape of rent by enabling the mortgagee to enter into possession in the event of default in forfeiture of the lease, cannot have the effect of converting such a mortgage into a simple mortgage, As observed in Abdul Khadir v. Subramanya Pattar, AIR 1940 Mad 946 on the strength of the Privy Council decisions in Abdullah Khan v. Basharat Hussain, ILR 35 All 48 (PC) and Feroz Shah v. Sohbat Khan, ILR 14 Lah 466: (AIR 1933 PC 178),
'although the mortgage and the lease back can and must in a case of this kind, be taken to form part of the same transaction, effect must be given to each according to its terms and the Court cannot, by reading the two together, spell out a transaction totally different in character and incidents.
The following observation in the same case (at page 947 of the report) with reference to the argument that a lease back obliterates the possessory character of a usufructuary mortgage and converts it into a simple mortgage contrary to the tenor of the deed, is also pertinent: 'We are of opinion that it cannot have that effect. It is no doubt permissible as a matter of construction to look behind the form of a transaction, to ascertain its substance and give effect to it according to the intention of the parties but it is a different thing to ignore the form in which the parties have deliberately cast their bargain, when such form is intended to govern their mutual rights and obligations.'
30. The only decision cited by Mulla in support of the observation already quoted is that in Imdad Hasan Khan v. Badri Prasad, ILR 20 All 401 where, at p. 407 of the report, it is laid down that, where there is a usufructuary mortgage and alease back as part of the same transaction, the relation between the parties is that of mortgagor and mortgagee even in respect of the rights and liabilities arising under the lease, that the arrears of rant must therefore be deemed to be arrears of interest, and that therefore the mortgagor cannot redeem without payment of those arrears. It does not appear that this decision has been subsequently followed, and, with great respect, we are unable to accept it as correct for the reasons already stated.
31. It is no doubt admitted that not a pie has been paid in respect of the lease under Ext. B3, but since the plaintiffs do not choose to pay the arrears now, the defendants can only recover them by separate action in enforcement of that deed.
32. In the result it follows that the mortgage, Ext. B-39, does not stand redeemed by reason of the deposit made in O. P. 13/49 and that the plaintiffs have to pay, in addition, a sum of Rs. 3802/12/- as compensation for improvements as also the costs of the suit and this appeal (which we hereby award to the defendants) before they can secure redemption. The appeal is accordingly allowed and there will be a preliminary decree for redemption in these terms in place of the decree of the lower court which is hereby set aside. Time for redemption -- three months from this date.
33. Although the prayer in the plaint is not for a decree for redemption, but for a declaration that the mortgage already stands redeemed, we have thought it proper to give the plaintiffs this lesser relief instead of driving the parties to a separate suit a procedure which cannot be of any benefit to either.