1. The fourth defendant is the appellant, and the short point for consideration is as to the terms on which redemption of the suit mortgage is to be granted.
2. According to the plaintiff, he is entitled to get redemption on payment of the mortgage money alone; whereas according to the appellant, before getting redemption the plaintiff must pay not only the mortgage money but also the arrears of rent or mesne profits subsequent to 9-6-1110.
3. Both the Courts have accepted the contention of the plaintiff though for slightly different reasons.
4. There is no dispute about the actual facts. The suit properties belonged to the father of the plaintiff and ultimately, part of the rights have devolved on the plaintiff. The plaintiff's father executed a usufructuary mortgage on 7-4-1092, evidenced by Ext. A, in favour of one Ouseph for Rs. 2,131. The period of redemption was fixed as 10 years in Ext. A. On the same day, the mortgagor took a lease of the properties for one year and it is also not disputed that a fresh lease was taken for another year in 1097.
5. On the basis of the lease, the mortgagee filed a suit O.S. 534/1098 in the District Munsiff's Court of Meenachil, for recovery of possession of the properties with arrears of Pattom past and future. Though the suit was dismissed by the trial Court, the mortgagee succeeded in the District Court which decree was also subsequently confirmed by the High Court. Subsequently, the recovery of arrears claimed in those proceedings appears to have been explained in a later judgment of the District Court evidenced by Ext. B that future rent could be claimed by the mortgagee till 9-6-1110, if property was not delivered over earlier. The mortgagee appears to have realised the arrears of rent under these decrees up to 9-6-1110, but he did not get possession of the properties.
6. One half of the right of the mortgagor appears to have devolved on the plaintiff and the other half on the other heirs of the mortgagor. The other heirs of the mortgagor also appear to have redeemed the half of the mortgage rights in separate proceedings. Therefore, it was only the plaintiff's liability to the extent of Rs. 1,065-8-0 that remained under the original mortgage. The rights of the mortgagee, Ouseph, has ultimately now accrued to the appellant 4th defendant.
7. The plaintiff, in these proceedings, sued for redemption of the plaint properties on payment of half the mortgage amount namely, Rs. 1,065-8-0 The suit was resisted by the 4th defendant on the ground that the plaintiff is not entitled to redemption unless he pays, over and above the mortgage amount of Rs. 1,065-8-0, also half the future rent of Rs. 213/^ decreed under the proceedings evidenced by Ext. C from 9-6-1110 up to date with interest thereon.
8. Both the Courts have held that the mortgage and the lease are two independent transactions and that the plaintiff is entitled to redeem on payment of the mortgage amount alone.
9. Mr. T.K. Narayana Pillai, learned counsel for the appellant, repeated the same arguments which have not found favour in the subordinate Courts. The learned counsel contended that the plaintiff is not entitled to claim redemption unless the whole mortgage money is deposited by him. And according to the learned counsel, the term 'mortgage money' will include the principal money and interest of which payment is secured for the time being. He relied upon Section 58(a) of the T. P. Act for this purpose.
He also relied upon Section 68(1)(d) of the said Act to show that the mortgagor was bound to secure the possession of the property in cases where the mortgagee is entitled to possession and that when the mortgagee does not obtain such possession, or is subsequently dispossessed due to the conduct of the mortgagor, the mortgagee has a right to sue for the mortgage money. In this case, the mortgagee was entitled to possession of the mortgaged property and notwithstanding a decree for possession, the mortgagor has not delivered possession of the properties. Therefore, the mortgagor was bound to pay arrears of rent which represents either interest or mesne profits, to the mortgagee which will be part of the mortgage money.
10. On the other hand, Mr. P. Govindan Nair, learned counsel for the plaintiff, has contended that all these questions will not arise because the parties are governed by the terms of the usufructuary mortgage. As per the recitals in Ext. A, the mortgagee has bound himself to deliver possession of the properties on payment of the mortgage amount stated therein. The mortgagee will bo of liberty to work out his rights separately under the lease, if any. Section 68 gives a right to the mortgagee to sue for the mortgage money in the cases mentioned therein. That section may have given a right to the mortgagee to sue for the mortgage money as provided therein. But that has no bearing on the question now before the Court. He also contended that the rent payable, if any, under the lease is not part of the mortgage money.
11. In our opinion, in view of the concession of the learned counsel for the appellant that the usu-fructuary mortgage and the lease are separate transactions and also in view of the further fact that the mortgagee has specifically agreed to surrender possession of the property under Ext. A on payment of the mortgage money alone, the contention advanced on behalf of the appellant has necessarily to fail. As the point has been raised and urged before us, we will give our decision on the contention raised, on its merits.
12. Mr. Narayanan Potti, learned counsel for the appellant, referred us to a decision of the Lahore High Court in Akbar Hussain v. Ragnandan Das, AIR 1921 Lah 351 which, in cur opinion, has no bearing on the question before us. There was no question of any lease back in that case.
13. We may refer to the decision of the Privy Council in Partab Bahadur Singh v. Gajadhar Bakhsh Singh, ILR 24 All 521. In that case, a usufructuary mortgage was accompanied by a lease back in favour of the mortgagor and the mortgagor thus became a tenant of the mortgagee and paid rent in lieu of interest. When the mortgagor was in possession as tenant, some of the villages were lost and as such, the mortgage security was very much diminished. The mortgagor filed a suit for redemption on payment of only the principal amount secured by the mortgage. It was contended by the mortgagee that there was a failure on the part of the mortgagor to secure possession of all the villages mortgaged and as such, the mortgagor was not entitled to redeem without paying also the interest, in lieu of the rents and proceeds of the properties so lost. In negativing this contention of the mortgagee, their Lordships observe at p. 531 as follows :
'The mortgage was of the class known as usufructuary mortgages, which are not uncommon in India, in which possession of the mortgaged property is delivered to the mortgagee who lakes the rents and profits in lieu of interest or in payment of the mortgage-money or partly in lieu of interests and partly in payment of the mortgage-money (Act IV of 1882, Section 58(d)). In this case the arrangement between the parties was completed by the execution of a lease, under which the mortgagor became the tenant of the mortgagee, and paid rent in lieu of interest. Under such a mortgage, the mortgagee takes his chance of the rents and profits being greater or less than the interest which might have been reserved by the bond, and the mortgagor is entitled to redeem on repayment of the mortgage-money.'
Therefore, the decision of their Lordships clearly shows that the mortgagor under those circumstances, was -entitled to redeem on payment of the mortgage money alone.
14. There is also a decision of the Full Bench of the Allahabad High Court reported in Nural Hasan v. Mahtab Bux, AIR 1945 All 202 (FB). The learned Judges have held that a mortgagee, at the time of redemption, cannot claim by way of interest the proceeds of the property which has not been delivered over to him,
15. This matter has also been considered by a Division Bench of the Travancore-Cochin High Court in the decision reported in Beevathuma v. Lakshmi Ammal, AIR 1952 Thav-Co. 92 a decision of the present Chief Justice and Mathew Muricken, J. That was also an instance of a usufructuary mortgage and lease back being separate transactions. In that case, a contention that the mortgagor before getting redemption was bound to pay not only the principal amount secured under the mortgage but also to deposit the interest till the date of payment of the mortgage-money, was accepted by the trial Court. The learned Judges, after considering the terms of the document, and the decisions of the Cochin High Court, differed from the trial Court and held:
'When a usufructuary mortgage is accompanied by a lease back and they form distinct transactions (as in this case), the mortgagor is entitled to redeem on payment of the principal mortgage amount alone, leaving the mortgagee to seek other remedies for the rent, if any, due to him under the lease..... ....The claim that though the mortgage monty is offered to be paid back in Kumbhom, the mortgagor should further pay interest on the money accruing due after 30th Makaram, is therefore absolutely unfounded and clearly unsustainable in law.'
We are in full agreement with the decision of the Travancore-Cochin High Court referred to above.
16.We may also refer to a recent judgment of our learned brothers, Sankaran and Ranian Nayar, JJ., in Venkappa Bhatta v. Gangadhara Bhatta, 1958 Ker Lt 946: (AIR 1959 Kerala 112). One of the questions that the learned Judges had to consider was as to whether the mortgagor was also bound to deposit the arrears of rent due under a lease back before obtaining redemption of the mortgage. The learned Judges held in that case that the usufructuary mortgage and the lease back were not part of the same transaction but were separate transactions, as in the case before us. The learned Judges held that the mortgagor was not bound to deposit the arrears under the lease back before getting redemption. The learned Judges also held that the mortgagees should only recover those arrears of rent in other appropriate proceedings. We are in full, agreement with the reasons given by the learned Judges therein.
17. In the result, the Second Appeal fails and isdismissed with costs of the plaintiff.