P.V. Rajamannar, C.J.
1. This appeal against the judgment of Ramaswami Counder, J. arises out of a suit for redemption filed by the first respondent. The mortgage sought to be redeemed was executed on 20th March 1930 by the 2nd respondent and his undivided brother one Vaidyanathan, who died subsequently, for securing repayment of a sum of Rs. 2000 borrowed by them along with their uncle. On 5-3-1952 the second respondent sold the mortgaged property to the first respondent directing the latter to redeem the mortgage.
The first respondent offered to redeem the mortgage on payment ot Rs. 2000, the principal amount, but the first defendant (appellant) refused the offer and insisted that besides the principal, the other sums including interest due under the provisions of the mortgage deed should also be paid before the mortgage could be redeemed. Thereupon, the suit, O. S. No. 114 of 1952, was filed by the first respondent in the court of the District Munsit of Poonamallee.
The learned District Munsif decreed the suit. He held that the first respondent-plaintiff was entitled to the relief of redemption on payment of the principal sum of Rs. 2000 and as that sum has been deposited into court, he passed a preliminary decree for redemption. There was an appeal by the first defendant to the court of the District Judge ot Chingleput. The learned District Judge allowed the appeal and set aside the decree passed by the District Munsif and remitted the suit to the District Munsif for adjudication as to what would be the amount due to the mortgagee in the light of the observations made in his judgment.
The learned District Judge held that the plaintiff would not be entitled to obtain redemption unless he paid also the other amounts including interest, which were payable under the deed of mortgage. Against the order of remand passed by the District Judge, there was an appeal to this court, C. M. A, No. 106 of 1956. Ramaswami Goundcr, J. allowed that appeal and restored the decree of the District Munsiff, but granted leave to appeal. Hence this appeal by the first defendant.
The material portions of the mortgage deed run thus:
'We have mortgaged with possession to you the house belonging to Nos. 1 and 2 of us and in out enjoyment and have received from you in the presence of the Sub Registrar Rs. 2000 and for the interest on this amount at Rs. 1-12-0 per cent per mensem, you shall yourself let out the house for rent and adjust the same in satisfaction o the interest. If the rent falls short or no rent is at all yielded, such amount as represents the interest due we shall pay to you or to your order before the 20th of the month and take receipt. We shall ourselves pay the quit rent, Union taxes etc, for the property and also carry out necessary repairs therefore at our own expense. If we fail to pay the taxes or carry out the repairs and thereby you are obliged to pay the rents, taxes or the repairs charges, such amount also shall be paid by us with interest at the above said rate. When we pay the principal amount, you shall at that time cancel this document and deliver the house to our possession. If we fail to pay you when you demand, the amount due according to this document, you can recover the said amount from us and from the property.....described below and from our other properties.' The deed itself was styled as a deed of possessory mortgage.
2. Under Section 58(a) of the Transfer of Property Act, 'mortgage money' is the amount due for principal and interest o which payment is secured for the time being. Under Section 60 of that Act, the mortgagor has a right on payment or tender at a proper time or place of the mortgage money to obtain redemption. The 'question, therefore, is whether the interest and other amounts payable by the mortgagor to the mortgagee are monies of which payment is secured.
This question must be decided on the actual provisions of the document and the decisions in other cases in which other documents had been construed can only render us assistance in a general way. Their Lordships of the Judicial Committee held in Gangararn v. Natha Singh, ILR Lab 425: AIR 1924 PC 183, that a mortgagee is entitled to treat interest due under a mortgage as a charge upon the mortgaged property in the absence of any contract to the contrary.
There were expressions used in the mortgages in the case before the Judicial Committee, which indicated that by, the term 'mortgage money' the sums actually advanced were contemplated. Nevertheless, their Lordships ruled that this does not displace the general principle that interest is a charge upon the property and payable upon redemption. This decision of the Privy Council was applied by the Lahore High Court in Manghi v. Dialchand, ILR Lah 559 : AIR 1926 Lah 624 (1)).
It was held that where the mortgage deed contains a stipulation for payment of interest, the mortgagee, in the absence of any contract to the contrary, is entitled to treat the interest due under the mortgage as a charge on the property. The learned Judges also decided that the fact that the mortgagors made themselves Personally liable for the payment of the interest was not incompatible with the fact that the interest formed also a charge on the property.
In Rang Raj Singh v. Sheonarainlal, : AIR1928Pat398 , the learned Judges pointed out that the mere fact that there was an express reference to interest in the personal covenant and no express reterence to interest in the hypothecation clause was not evidence of a contract to the contrary and they applied the rule that the mortgagee is entitled to treat the interest due on the mortgage as a charge on the mortgaged property.
3. The learned Judge, Ramaswami Gounder, J. was apparently impressed by the decision of this court in Narnrnalvar Chetti v. Krishaswami Chetti, 16 MLW 743: AIR 1923 Mad 71 , and considered that the present case fell within the scope of the' ruling in that case. In the mortgage deed, which was before the learned Judges in that case there was the following express provision:
'We shall Pay the aforesaid Principal of Rs. 10,000 to you and your order, redeem this mortgaged property and take back the document.''
This provision in the opinion of the learned Judges seemed to indicate that the sum to be repaid prior to redemption for the purpose of redemption was merely the relevant terms of the document before them, they came to the conclusion that the remedy, which the party secured by the mortgage for interest not discharged by rents and profits, was a personal remedy and therefore interest was not a charge on the mortgaged property and was left to be recovered only under a personal covenant of the mortgagors. This decision cannot apply to the suit mortgage. The following provision in it is, in our opinion, conclusive.
'If we fail to pay when you demand, the amount due according to this document, you can recover the said amount from us and from the property described below and from our other properties.'
There is undoubtedly a personal covenant to pay and the mortgagee is given the right to recover the interest based on the personal covenant, but there is also an express provision that the amount outstanding shall be recovered from the mortgaged property. Not only is there, no contract to the contrary, that is to say, no contract that interest shall not be charged on the mortgaged property, there is also an express recital that it is so charged.
As was Pointed out in ILR Lah. 559 : AIR 1926 Lah 624 (1)), the fact that there was a personal covenant to pay the interest would not by itself be a contract to the contrary. It is true that in one part of the document it is provided that when the mortgagors pay the principal amount, the document shall be cancelled and the mortgaged property delivered to the mortgagors. Reading the entire document as a whole, it is obvious that at the time of the execution of the mortgage, the parties presumably contemplated that the interest would be recovered from the rent fetched by the mortgaged property and, even if there was any deficiency, it would be periodically made good by the mortgagors.
It was also expected that the mortgagors would duly and faithfully carry out their undertaking to pay the quit rent, taxes etc. If these provisions had been carried out by the mortgagors, then obviously the only amount, which would be outstanding, would be the principal amount, in which case it would be sufficient to pay the principal amount only to enable the mortgagors to redeem the mortgage.
4. Learned counsel for the respondent referred us to three decisions, apart from relying upon 16 MLW 743 : AIR 1923 Mad 71, with which we have dealt above and we shall refer briefly to these. In Ali Ahmed v. Kalka Prasad, 37 Ind Cas 95 : AIR 1917 All. 165(1)) the mortgage deed inter alia stipulated that the deficiency in interest would be made good by the mortgagor from his own pocket. There were no words which could be construed to confer power on the mortgagee to recover the outstanding interest from the mortgaged property. In Lockacband v. Hazar Khan, 41 Ind Cas 59: AIR 1917 Lah 31 , a decision of the Punjab Chief Court, it was held on the terms of the mortgage in question that interest was not charged on the mortgaged property.
Jawala Singh v. Teja Singh, 71 Ind Gas 801:
(AIR 1924 Lah 273) does not take the matter any further. The mortgage deed in that case provided that the mortgagor shall redeem the property on the payment of the principal money within three years and that the mortgagor shall pay interest at the rate of Rs. 1-6 per cent without objection. After the decision of the Judicial Committee of the Privy Council in ILR Lah 425; AIR 1924 PC 183 , we have grave doubts as to the correctness of this decision. In any event, in the mortgage deed in that case there was no provision that the interest could be recovered from the mortgaged property, as we have in the mortgage deed before us.
5. We hold that the construction placed on the material provisions of the mortgage deed by the learned District Judge was right and the learned Judge was wrong in holding that there was a contract contrary to the general rule that interest payable under a mortgage deed would also be charged to the mortgaged property and would be included in the mortgage money on payment of which alone the mortgagor would be entitled to obtain redemption of the mortgage.
6. The appeal is allowed and the order of the learned District Judge remitting the suit to the District Munsif for ascertaining the amount actually due under the mortgage is restored. The appellant will get the costs of this appeal from the first respondent. He will also be entitled to the costs before Ramaswami Gounder, J. and in the lower appellate court. The costs in the trial court will be provided when the suit is disposed of.