1. These two appeals both arise out of a suit on an usufructuary mortgage. Appeal No. 107 of 1938, is the plaintiff's appeal against the disallowance of a part of his claim for rent on the hypotheca which was leased back to the mortgagors. C.M.A. No. 169 of 1940, is preferred against the order scaling down the decree under Sections 8 and 19 of Act IV of 1938. The suit is based on a mortgage, dated 29th September, 1930 executed by the first defendant and her husband, Shaik Farid Mohamed Vavu Khan Rowther for a sum of Rs. 25,000, of which admittedly only Rs. 19,000 was paid. There was a lease to the mortgagors on the 1st October, 1930, under Ex. C for two years. This was renewed in 1933 for one year by Ex. D and by Ex. E for a further year which terminated on the 29th November, 1934. According to the terms of Ex. E, the rent of Rs. 1,995 was payable on the 29th September, 1934. There was no fresh lease deed, after Ex. E. was executed; but it has been found--and the correctness of the finding is not disputed--that the defendants continued in possession and enjoyment of the land up to the time of the suit. On 14th December, 1934, the plaintiffs sent a notice demanding the mortgage amount and arrears of rent. On the 2nd September, 1935, there is a letter from the husband of the first defendant which indicates that the relations between the parties were friendly. On the 25th September, 1935, we have Ex. F, sent by Shaik Farid Mohamed Vavu Khan Rowther, the husband of the first defendant, to the plaintiff in which he says 'as soon as he is well he will come in person to pay the entire amount due and execute the deed'. Ex. G-2 is a further notice dated 31st October, 1935. Ex. F-2, dated 11th July, 1936, is a letter in which the defendant's husband asks for time to pay the money and in Ex. J, dated 30th November, 1936, we have a letter from one K. H. Ussain Rowther, who appears to be an agent or representative of the defendants which contains the statement that they, (apparently the defendants) thought that the plaintiff should agree to their taking the properties for five years after fixing the amount 'in respect of the arrears of rent due upto this date.'
2. The learned Subordinate Judge has found that there was no oral lease for the period, following November, 1934, such as was alleged in the plaint and has given a decree only for damages for use and occupation for the period upto November, 1936, and has given no decree for rent or for damages for the broken period ending with the filing of the suit in. March, 1937. It is no doubt true that there is no very clear evidence of any definite oral lease for this period; but it is certainly established by the documents in the case, particularly the Exs. F and J, that the defendants must have been in possession under some arrangement whereby they agreed to pay rent and to execute a formal lease deed when convenient. It would appear that the execution of the lease deed was prevented by the illness of the first defendant's husband. Their continued occupation during this period was evidently on the basis that they were to go on paying the rent as they had paid previously.
3. The defence was a plea that on the termination of the lease in November, 1934, the defendants asked the plaintiff to take possession of the land and that he omitted to do so and that subsequently the land was leased out in order to save loss after it had been lying waste for sometime. Presumably it is a leasing by the defendants to which this rather ambiguous pleading refers. There is no real evidence of any invitation. to the plaintiff to take possession of the land. The documents filed in the case make it quite clear that the land was being enjoyed by the defendants under an understanding that a formal lease would be executed similar to the previous leases. On this state of evidence we are of opinion that the lower Court was wrong in awarding only damages for use and occupation and that the decree should properly have given rent at the same rate which prevailed during the currency of the written leases.
4. Some argument has been advanced before us with reference to the liability for rent for the broken period of five months and 24 days, between the termination of the last written lease on 29th November, 1934, and the date on which the defendants were dispossessed by the receiver. There seems to have been no discussion of this question in the Courts below. The plaintiff expressly claimed rent not merely for the completed years but also for the broken period. There is nothing to show that the defendants did not enjoy the crops on the land during this period and in the absence of any evidence or apparently any serious contention in the lower Court, that the defendants were not liable for the proportionate rent for this period we think that it should be given.
5. A further contention relates to the decree for costs. In the written statement the defendants admitted their liability for the principal amount of Rs. 19,000, and consented to a decree for that sum. They disputed the claim for rent only. The lower Court has given costs on the uncontested scale so far as the admitted amount of the plaint claim is concerned and has allowed costs on the contested scale only to the extent to which the claim was actually contested. The fees' rules do not expressly make provision for any such contingency; but we consider that the lower Court's order is both wise and legal. It was open to the plaintiff under Order 12, Rule 6 of the Civil Procedure Code to have asked immediately for a decree for the sum of Rs. 19,000 on the admission in the written statement. Had he asked for such a decree there can be no doubt that the proper order for costs would be that on that sum costs would be calculated on the uncontested scale. We do not see why the amount of costs should be swelled merely because the plaintiff abstained from asking for the decree on confession to which he was entitled.
6. The civil miscellaneous appeal raises a point under Act IV of 1938, which, if not explicitly, is covered by the implications of a decision of this Bench. The contention was that the judgment-debtors were entitled to relief under the Act in respect of this mortgage debt on the theory that the rent payable under the lease really represented interest and that the mortgagee was not in possession of the property mortgaged, so as to bring in force the exception under Section 10 (2) (i) of the Act. The theory that a usufructuary mortgage and a lease back can be regarded as a simple mortgage bearing interest has been disapproved by us in the case of Abdul Khadir v. Subramanya Pattar : AIR1940Mad946 where we pointed out that though the mortgage and lease back 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. In the case just quoted it was not explicitly argued that a mortgagee with possession who had leased the land back to the mortgagor was no longer in possession of the property mortgaged, so as to get the benefit of the exception in Section 10 (2) (i) of Act IV of 1938. But we do not consider that this argument is tenable. A person who leases his land to another remains in possession of the land leased and the same is true whether he be a mortgagee or owes his interest in the land to an absolute title. We do not consider that it is necessary for the purpose of Section 10 (2) (i) that the mortgagee should be in physical possession of the property.
7. The judgment-debtors having been found to be agriculturists are entitled to relief under the Act only to the extent to which interest has been decreed. The decree for rent or damages is not a decree for interest; but the interest on arrears of rent and the interest on costs will have to be scaled down under Section 9 of the Act. The result therefore will be that the decree of the lower Court will be amended by giving to the plaintiff rent from 29th November, 1934, upto the date of the suit at the rate of Rs. 1,995 per annum. The interest on the arrears of rent and on the decree for costs will be at five per cent. upto 22nd March, 1938, thereafter at 6 1/4 per cent. upto the date fixed for payment which is three months from today and subsequent interest on the aggregate amount at six per cent. The plaintiff will be entitled to costs as decreed by the lower Court, on the uncontested scale so far as the principal sum is due and full costs at the contested scale on the balance of the decree.
8. The respondents will pay the appellant proportionate costs in the regular appeal and full costs in the civil miscellaneous appeal.