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C. Joseph Mattom Vs. the Free India Bank Ltd. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKerala High Court
Decided On
Case NumberA.S. No. 499 of 1964
Judge
Reported inAIR1966Ker234
ActsTransfer of Property Act, 1882 - Sections 68(1)
AppellantC. Joseph Mattom
RespondentThe Free India Bank Ltd.
Appellant Advocate M.A. Joseph and; V.V. Narayanan, Advs.
Respondent Advocate N. Ananthakrishna Iyer, Adv.
DispositionAppeal dismissed
Cases ReferredMahabir Prasad Rungla v. Durga Datta
Excerpt:
.....was no failure on the part of the mortgagor to give possession and that the case was one of a failure by the mortgagee to take possession and relied upon the decision in mahadali v. we do not understand the above oases relied on as holding that even where there has been a failure by the mortgagor to fulfil his obligation section 68(1)(d) would not be attracted. panchanada odayar, air 1982 mad 175 it was ruled that the failure of the mortgagor to deliver possession will not deprive the mortgagee of his right to interest merely because he does not take steps to enforce his right to possession. 9. even if section 68(1)(d) is not attracted to the case, it appears to us that the plaintiff is entitled to damages for failure to give possession, and that the interest claimed in this case,..........cases and no others, namely: x x x x x (d) where the mortgagee being entitled to possession of the mortgaged property the mortgagor falls to deliver the same to him or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor.' x x x x 6. counsel for appellant contended that there was no failure on the part of the mortgagor to give possession and that the case was one of a failure by the mortgagee to take possession and relied upon the decision in mahadali v. joti, (1898) itr 17 425 and manik chand v. rangappa, ilr 45 bom 523: air 1921 bom 28 in support of the said submission. we do not understand the above oases relied on as holding that even where there has been a failure by the mortgagor to.....
Judgment:

Gopalan Nambiyar, J.

1. This appeal is against the judgment of Raman Nayar J., in B. C. S. No. 3 of 1963 in B. C P No. 3 of 1966. The suit was by the Liquidator of the Free India Bank Ltd., (in liquidation), forrecovery of a sum of Rs. 20,861 together with interest at 9 per cent per annum, due under an Otti Ex. P-1 dated 18-2-1958 executed by the defendant in favour of the Bank. The learned Judge passed a preliminary decree for the amount due on the mortgage after giving credit to the payments and set off admitted by the plaintiff, with simple interest at 9 per cent per annum upto the date of the suit and 6 per cent per annum thereafter. Suitable directions were given for appropriation of the admitted payments and set off. This appeal has been preferred by the defendant.

2. The only question agitated before us in appeal is regarding the liability for interest, Raman Nayar J., held that the claim for interest fell squarely within Clause (d) of Sub-section 1 of Section 68 of the Transfer of Properly Act. The learned Judge was of the view that:

'There can be little doubt that under Ex. P-l as under every usufructuary mortgage which contains no provisions to the contrary interest is payable and is part of the mortgage money which can be sued for under Section 68(1).

3. It was also held by the learned Judge that even if the plaintiff is not entitled to interest as such under Section 68 of the Transfer of Property Act, it is entitled to compensation for breach of covenant regarding the possession and that the profits derivable from the property would be a true measure of the quantum of compensation, and that this would amount to more than interest calculated at nine per cent as claimed by the plaintiff.

4. Exhibit P-l provides that the mortgagee is to remain in possession and satisfy itself of interest on the mortgage amount, out of the profits of the property. It further recites that possession was given to the Bank, but it is common case, that possession was in fact not given. The case of the plaintiff is that there was an agreement that the mortgagor himself might remain in possession and pay interest on the mortgage amount at nine per cent per annum.. According to the defendant, the Managing Director of the Bank had told him not to hand over possession and assured him that he need only repay the principal amount without interest within one year. The learned Judge hold that evidence of either version was precluded by reason of Section 92 of the Indian Evidence Act. No argument to the contrary was advanced before us.

5. That being so, the case before us is one, where, the mortgage Ex. P-l being usufructuary, there was an obligation on his part of the mortgagor to give possession but the same was admittedly not discharged. There is nothing to suggest laches on the part of the mortgagee. It appears to us this is sufficient to amount to a 'failure' on the part of the mortgagor to give possession so as to attract Section 68(1)(d) of the Transfer of Property Act which reads as follows:

'68. (1) The mortgagee has a right to sue for the mortgage-money in the following cases and no others, namely:

X X X X x (d) where the mortgagee being entitled to possession of the mortgaged property the mortgagor falls to deliver the same to him or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor.'

X X X X

6. Counsel for appellant contended that there was no failure on the part of the mortgagor to give possession and that the case was one of a failure by the mortgagee to take possession and relied upon the decision in Mahadali v. Joti, (1898) ITR 17 425 and Manik Chand v. Rangappa, ILR 45 Bom 523: AIR 1921 Bom 28 in support of the said submission. We do not understand the above oases relied on as holding that even where there has been a failure by the mortgagor to fulfil his obligation Section 68(1)(d) would not be attracted. If they do, we are in accord with our learned brother Hainan Nayar J., in expressing our respectful dissent from the said decisions.

7. In Subramania Aiyar v. Panchanada Odayar, AIR 1982 Mad 175 it was ruled that the failure of the mortgagor to deliver possession will not deprive the mortgagee of his right to interest merely because he does not take steps to enforce his right to possession. The Bombay decisions referred to above are considered and distinguished in the Madras case. We arc in agreement with the principles of the Madras case.

8. We are therefore, in agreement with Raman Nayar J., that the claim of the plaintiff falls squarely within Section 68(1)(d) of the Transfer of Properly Act. On the terms of Ex. P-1 and on the provisions of Section 58(a) of the Transfer of Property Act, we are further of the view that the mortgage money includes interest also.

9. Even if Section 68(1)(d) is not attracted to the case, it appears to us that the plaintiff Is entitled to damages for failure to give possession, and that the interest claimed in this case, would provide a reasonable measure of the damages to which the plaintiff is entitled. As noticed by the learned Judge there is evidence that the profits from the property will be about Rs. 2,000 per year, and the claim for interest at nine per cent per annum, as the measure of the damages to which the plaintiff is entitled, errs, if at all, on the low side. Nor do we feel that the decision in Mahabir Prasad Rungla v. Durga Datta, : [1961]3SCR639 would in any way stand in the way of the plaintiff's claim. This is not a case of a claim or award of interest as damages, but only a case of award of damages, the true measure of which is represented by the interest payable on the mortgage amount. Such, we understand to be the effect of the amended plaint.

10. We are not satisfied that the claim of the plaintiff has in any way been barred by acquiescence, or laches. The plea in that form does not appear to have been urged before our learned brother, Raman Nayar J.

11. The appeal falls and is dismissedwith costs.


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