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H.R. Chamaria and Co. Vs. Sonatan Pal and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1928Cal158
AppellantH.R. Chamaria and Co.
RespondentSonatan Pal and anr.
Excerpt:
- .....in possession, he is held to be accountable as much; for example, in this case if in the mortgage suit galstaun had taken up the position that he did not enter into possession as a mortgagee but simply as guardian of owen sukeas, i think his plea could not have been given effect to. he was not the legal guardian of owen sukeas and, therefore, as there is no other legal ground, which he could maintain for being in possession of the property he would be liable to account as a mortgagee in possession. my view, therefore, is that chamaria may shelter himself under the plea that galstaun took possession of the property as a mortgagee after the death of j.b. sukeas and that he was brought on the land by galstaun.13. there was no relationship of landlord and tenant between him and the.....
Judgment:

B.B. Ghose, J.

1. This is an appeal on behalf of the principal defendant, H.R. Chamaria & Co., who may shortly be described as Chamaria, against a judgment and decree of the Subordinate Judge, 2nd Court, Dacca dated 21st December 1925. The suit, as framed, was on the ground that Chamaria was a tenant-at-will under one J.B. Sukeas who was the owner of the property in question. The plaintiff had purchased the right, title and interest of the legal representative of J.B. Sukeas in execution of a money-decree on 2nd May 1919. He was put into symbolical possession by virtue of his purchase on 18th July 1919. The purchase was made in the benami of his son, named Bepin Behary Pal who was joined as defendant 2 in the suit. On 4th August 1919 the plaintiff served notice on Chamaria determining the tenancy under which Chamaria was alleged to have held the property in question as from the end of August 1919. The present suit was brought on 17th September 1919, and the claim was for rent at the rate of Rs. 600 per month from 2nd May to 31st August 1919, and for damages at a certain rate, which it is unnecessary to mention, from 1st September to 17th September 1919. The plaint was subsequently amended by an application made on 23rd January 1925, asking for mesne profits or damages up to the date of delivery of possession. By this amendment the original valuation of the suit, which was Rs. 10,000 odd, was increased to Rs. 80,000 odd. The defendant objected to the application for amendment which was overruled by the lower Court. The defendant's main defence was that he was never a tenant of the land under the plaintiff or his predecessor-in-interest, and the plaintiff has no right to maintain the suit against him. His case was that one J.C. Galstaun held an equitable mortgage or, as it may be properly described, as a mortgage by deposit of title-deeds, which was effected in the town of Calcutta under Section 59, T.P. Act, by J.B. Sukeas; and that Galstaun was in possession of the property in suit along with other properties as a mortgagee, and while in such possession Galstaua let out the property at first to a brother of J.B. Sukeas and then to the defendant Chamaria at a rent of Rs. 600 per month. But some time in April 1918 an agreement was entered into between Galstaun and Chamaria that Chamaria would purchase the property in dispute for Rs. 85,000 and that he would have to pay no reat, but would have to pay interest on the purchase money agreed to between them. The sale could not be affected because Galstaun had no right to effect a sale of the property at the time. But the stipulation was that Galstaun would either take the permission of the Court to sell the property on behalf of the infant heir of J.B. Sukeas, or he would himself effect the sale after purchasing the property in execution of the decree on his mortgage which he intended to have. On these pleadings several issues were framed in the lower Court. The main questions are covered by issues 3, 7 and 11. Issue 3 was:

Is there any relationship of landlord and tenant between the plaintiff and the defendant.

2. Issue 7 was:

Was the plaintiff aware of the equitable mortgage in favour of J.C. Galstaun at the time when he purchased the property in suit? If so, can he get khas possession without redeeming plaintiff's mortgage

3. Issue 11 was:

Whether Mr. J.C. Galstaun is mortgagee in possession of the properties in suit. If so, whether the plaintiff is entitled to recover any amount by way of damages

4. It should be stated here that the plaintiff did not, at the commencement, admit the mortgage of Galstaun. When the suit was brought by Galstaun on his mortgage the present plaintiff was joined as a defendant as he ought to have been. joined as a purchaser of a portion of the 'equity of redemption. Galstaun's suit on his mortgage was brought on 14th May 1919, four months prior to the present suit by the plaintiff. The plaintiff disputed the mortgage and in that suit he took up a plea that Galstaun having got into possession of the property and having realized the profits, he was bound to account for the receipts, and those must toe debited against the debt if any was found due to Galstaun. That suit was decided in the trial Court on 23rd September 1921. 'There was an appeal against that decision and this Court modified the decree of the Subordinate Judge by its Judgment dated 23rd January 1924. I shall speak later on about this judgment. The judgment and decree of the High Court were affirmed by the Judicial Committee in January 1927: vide A. I. B. 1927 P.C. 60-Ed.

5. In the presesent case before the Subordinate Judge the trial proceeded upon the ground that Galstaun had a mortgage on the property in question. The sole question upon which the parties seem to have been in controversy was whether Galstaun was ever in possession of the property in question as a mortgagee, or, in other words, whether Galstaun's position was that of a mortgagee in possession. The Subordinate Judge found, as it was fcund in the previous litigation that the purchase of the plaintiff was with notice of Galstaun's mortgage. The Subordinate Judge found in the present case in deciding issue 7, as stated above, that Galstaun took possession of the property as guardian of the infant son of J.B. Sukeas and did not take possession as a mortgagee. That being so, he held with regard to issue 7, that the brother of J.B. Sukeas was a tenant of Owen Sukeas, the infant son of the original mortgagor, when Galstaun let out the property to him and that Chamaria was similarly a tenant under Owen Sukeas when Chamaria was let into possession by Galstaun in his capacity of guardian of Owen Sukeas. In that view it was held that the plaintiff, as a purchaser of the right, title and interest of Owen Sukeas stepped into his shoes and thus Chamaria became a tenant under the plaintiff, and that tenancy was terminated at the end of August 1919, by notice to quit which was served by the plaintiff upon Chamaria, and upon that basis the plaintiff was entitled to a decree for rent for the period of the tenancy and also for damages by way of mesne profits till the date of delivery of possession. The property however, was sold in execution of the mortgage decree obtained by Galstaun on 23rd October 1925, and purchased by himself. The value fetched for the property at the execution sale was far below the amount of the mortgage decree. By reason of that sale no decree could have been made by the Subordinate Judge for ejectment of the defendant, as the plaintiff's title to the property ceased to exist by virtue of that sale. But he made a decree for damages up to that date and the total amount of the decree made by the Subordinate Judge, who modified the claim for damages made by the plaintiff to a considerable extent, was Rs. 46,660. The defendant Ghamaria has appealed to this Court.

6. The first ground taken on behalf of the appellant is that the amendment asked for by the plaintiff should not have been allowed by the lower Court. We do not think that there is any substance in this objection. If the plaintiff had not specified in his plaint that he asked for mesne profits till the date of the suit, that is to say, till 17th September 1919, the Court might have been in a position to make a decree for mesne profits up to the date of delivery of possession. But, if the suit is otherwise properly framed, there was no harm in allowing the plaintiff to amend his plaint by striking out from his prayer for recovery of mesne profits the words up to the date of the suit' and by substituting in their place the words 'up to the date of delivery of possession.'

7. The appellant then takes up the position that he was brought on the land by the mortgagee Galstaun who was in possession at the time, and that so long as the possession of Galstaun could not be got rid of, the plaintiff was not entitled to sue him as there was no privity between him and the plaintiff. As I have already stated Chamaria never acknowledged that he was on the land as tenant of Sukeas. Galstaun's possession was not admitted by the plaintiff in this suit either in the plaint or in the evidence on his side. The Subordinate Judge, however, has found that Galstaun was in possession. But he has held that as Galstaun was in possession as a guardian of Owen Sukeas the relationship of landlord and tenant existed between Owen Sukeas and the defendant. The question, therefore, is whether that position is at all maintainable. The learned vakil, on behalf of the plaintiff-respondent, does not seek to support the decree of the Subordinate Judge on that ground. The position that he takes up is this : that Galstaun got into possession without any right. His position was that of a mere trespasser and Chamaria, who was brought on the land by Galstaun, was in no better position. They were joint trespassers' upon the facts as established by the evidence. That being so, the plaintiff was entitled to claim damages from any one of them, both of whom were jointly and severally liable. So long as it is not established that the plaintiff has recovered any damage from the other joint trespasser the plaintiff is entitled to recover damages from this tortfeasor, that is, Chamaria; and upon, that ground the decree of the Subordinate Judge is unassailable.

8. The appellant, on the other hand, contends that Galstaun was in possession as a mortgagee. He brought a suit on his mortgage. In that suit he admitted, in his plaint, as would appear from a recital in. the judgment of the Subordinate Judge it the mortgage suit (at p. 42 of the second; part of the paper-book), that he had obtained possession of the mortgaged properties and some moveables belonging to J.B. Sukeas, after the death of J.B. Sukeas. He had sold some of the moveablea and realized the rents and profits of the mortgaged properties and credited the price and rent and profits towards the satisfaction of his debt. He took upoo. himself the liability to account as a mortgagee in possession. The present plaintiff was defendant 3 in the previous mortgage suit, who practically alone contested' the suit. He also referred to the fact that Galstaun had taken possession of the property left by J.B. Sukeas and that he was-bound to account for all the moneys that he had received, (which the present plaintiff described as misappropriation) and also to make good the amount 'of the loss which he had caused by his neglect to get. in any part of the property of the deceased. In substance the present plaintiff, as a defendant in the mortgage suit, pleaded that not only Galstaun was liable to account for what he had actually received or might have received, but he was. also liable to account for his wilful default. Upon that an issue was framed as to how much was realized, and that was the sixth issue before the Subordinate Judge in the mortgage suit. Gulstaun produced his account books in the mortgage suit.. What the receipts were is evident from, the fact which was stated in the judgment of the Subordinate Judge (at p. 58 of the same part of the paper book) wheres the Judge stated:

The plaintiff, it is true, credited in his accounts the moneys received from the estate of J.B. Sukeas after his death and these should be held as payments made in reduction of the plaintiff's dues.

9. It should be stated that the decree made by the Subordinate Judge was merely a money decree as against the representative of the original debtor, J.B. Sukeas, and the sums which were found in the Recounts to have been realized from the property by Galstaun were debited against his dues.

10. Against that decree Galstaun appealed to the High Court, and in the High Court the decree of the Subordinate Judge was modified to this extent that a decree was made in favour of Galstaun as a mortgage and he was held entitled to recover his dues from the mortgaged property. With regard to the accounts : it appears that neither party pressed for an account being taken and a decree which in ordinary case is made to the effect that accounts should be taken of what was due to the mortgagee by taking accounts of what was due under the bond and what was received by the mortgagee from the mortgaged properties, was not made. Instead of that a decree was made for the sum that was found by the lower Court with interest and costs: The reason evidently seems to have been that both the parties knew that the receipts were less than the interest and outgoings and that on taking accounts the dues of the mortgagee would be found to have been much larger than what was found by the Subordinate Judge, and the mortgaged property not being of sufficient value it would be mere waste of time and money to take further accounts which would have the effect of increasing the debt which was found to be due to the mortgagee. There was an appeal from the decision of the High Court to the Privy Council by the present plaintiff. The judgment and decree of the High Court were affirmed by the Privy Council on the 21st January 1927. vide . No objection was made in that appeal to the accounts nor to the nature of the decree that was made by the High Court. The only ground upon which the present plaintiff chose to fight the case before the Privy Council was whether there was a mortgage or not. The position of the parties, therefore, stands thus: that if there was a mortgage the equity of redemption purchased by the plaintiff was worth nothing as the mortgage-debt of Galstaun would far exceed the value of the property in whichever way the accounts might have been taken.

11. It is contended on behalf of the appellant that it is quite clear from the facts that Galstaun was in possession as a mortgagee. That being so, Chamaria had been brought on the land by the mortgagee in possession, and the plaintiff as a purchaser of the equity of redemption could not treat Chamaria as his tenant so long as the property was not redeemed by him. It is conceded on the part of the respondent that if Galstaun was a mortgagee in possession, and if Chamaria was brought on the property by Galstaun as such mortgagee, the plaintiff would have no case. But his contention is that Galstaun never took possession as a mortgagee and that contention is sought to be supported by the fact that the plaint was not drawn up in the mortgage suit in the form which is prescribed in Appendix A, form No. 45, Civil P.C., for a plaint by a mortgagee who had entered into possession; and the decree is not also in the form given in Appendix D, Civil P.C. I have already stated why the decree was not in that form. The plaint, although it is not precisely in the form prescribed in Appendix A sufficiently indicates the position of Galstaun. When he stated in his plaint that he had a mortgage and that after the death of the original mortgagor he got into possession of the property and realized rents and profits which, he was willing to debit against the mortgage amount, this is a sufficient statement that the mortgagee was liable to account as mortgagee in possession and I have already indicated the defence in which it was alleged that the mortgagee was not only bound to account for what he received, or what he might have received, but also to account for the loss to the estate by his default. Under the circumstances it seems to me difficult to hold that the position of Galstaun was anything but that of a mortgagee in possession. The Subordinate Judge has held that Galstaun went into possession as a. guardian. It is undoubtedly true, as it appears from the record, that, after the death of J. B. Sukeas, who had himself written a pencil note before his death to the effect that Galstaun should look after his minor son, Galstaun thought that he would act as a sort of a guardian of the minor son of J.B. Sukeas as Galstaun. seems to have been very much interested in the welfare of the family. With that view he took possession of not only the mortgaged property, but also some moveable properties belonging to Sukeas and tried to carry on his business. It is apparent that when he found that the debts of the estate of Sukeas were so great that it would be hopeless to try to save the estate, he ceased from acting as a sort of guardian of the infant. Subsequently, a Jady, who was the grandmother of Owen Sukeas, took out letters of administration of the estate of J.B. Sukeas. Galstaun was certainly not entitled to enter into possession under his mortgage. But it is quite clear that he got into possession either with the express or tacit consent of the persons who were really interested in the estate of the mortgagor, J.B. Sukeas. This question does not seem to have been properly investigated and that must have been due to the fact that the plaintiff altogether ignored the existence of Galstaun with reference to this property in the present litigation. It appears quite clear from the evidence on the record that Galstaun entered into possession peacefully and without objection on the part of the persons interested in the mortgaged property. That being so, he cannot be treated as a wrongdoer, as he is sought to be treated by the respondent here and unless the plaintiff can maintain the position that Galstaun was a wrongdoer and Chamaria was equally a wrongdoer the present suit cannot in my opinion be maintained as against Chamaria.

12. It is contended on behalf of the respondent that there is nothing to show that Chamaria paid any money to Galstaun for the period of his occupation or that any sum which he might have paid was taken into account in the mortgage suit and, therefore, the plaintiff is entitled to recover the money from Chamaria for the period of his occupation. We are not concerned in this case, in my judgment, with the question whether proper accounting was mads in the mortgage suit of Galstaun. That question does not arise in the present case. The short question which seems to arise here is that if Galstaun was in possession as a mortgagee and was accountable as such in his mortgage suit, any person who has been brought on the mortgaged property by Galstaun has no privity between himself and the mortgagor so as to be liable to the mortgagor for his occupation of the mortgaged property. It may be conceded that the plaintiff, after his purchase of the equity of redemption could, by giving proper notice to Galstaun, claim to recover possession of the property. In other words he might withdraw by notice to Galstaun the consent that was either actually or tacitly given by his predecessor-in-interest to the taking of possession by Galstaun; but it is unnecessary to discuss what the position would have been in that case as there is no allegation anywhere on the record that any such notice was given. The plaintiff was, therefore, bound by the consent given by or on behalf of the owner of the equity of redemption before his purchase to the taking of possession by Galstaun and he cannot on that ground maintain this suit against the defendant for damages or rent. There is another matter with regard to which I propose to make a few observations. The discussion by the learned Subordinate Judge in his judgment as regards the question whether Galstaun was a mortgagee in possession on not is based upon a discussion in the books as to whether the mortgagee should in certain cases be treated as having taken upon himself the onerous position of a mortgagee in possession. When a mortgagee enters into possession ha is bound to account as a mortgagee in possession. But owing to the exceptional severity with which a mortgagee in possession is treated in taking accounts the Courts are slow to decide that such possession has been taken, and will only to do so when, it is proved that the mortgagee had no reasonable ground for believing himself entitled to take the rents and profits in any other capacity. The mortgagee may relieve himself of the liability to account as a mortgagee in possession by showing that he entered into possession in some other character. If he fails to establish that fact in order to exonerate himself from the liability to account as a mortgagee in possession, he is held to be accountable as much; for example, in this case if in the mortgage suit Galstaun had taken up the position that he did not enter into possession as a mortgagee but simply as guardian of Owen Sukeas, I think his plea could not have been given effect to. He was not the legal guardian of Owen Sukeas and, therefore, as there is no other legal ground, which he could maintain for being in possession of the property he would be liable to account as a mortgagee in possession. My view, therefore, is that Chamaria may shelter himself under the plea that Galstaun took possession of the property as a mortgagee after the death of J.B. Sukeas and that he was brought on the land by Galstaun.

13. There was no relationship of landlord and tenant between him and the plaintiff and the plaintiff, therefore, is not entitled to claim anything from him. The plaintiff purchased the equity of redemption which unquestionably was worth nothing and be is not, in my judgment entitled, to recover anything from Chamaria.

14. In that view this appeal must be allowed and the suit dismised with costs in all Courts.

Page, J.

15. I agree. This is a suit brought to recover khas possession of certain immovable property together with arrears of rent and mesne profits. The property in suit was the subjectmatter of an equitable mortgage of 22nd May 1914, created by one J.B. Sukeas in favour of J.G. Galstaun.

16. It was common ground at the hearing of the appeal that even if the sums decreed for rent and mesne profits in the suit had been added to the mortgage security it would have been insufficient to meet the sum due to Galstaun under the mortgage of 22nd May 1914. The ground upon which the decree was based is set out in the judgment of the learned Subordinate Judge as follows:

Defendant 1 (that is appellant) got into possession admittedly as tenant at a monthly rent of Rs. 600. They were let into possession by Mr. Galstaun in his capacity as a guardian of Owen Sukeas in 1917, and they paid rent as they had agreed to pay for a period of one year. In March or April 1918 they entered into an in fructuous verbal contract with Mr. Galstaun to purchase the property for Rs. 85,000, but they did not pay the money as Mr. Galstaun could not execute any valid deed of transfer and it was settled and agreed that reasonable interest upon the sum of Rs. 85,000 should be paid by H.R. Chamaria & Go. As there was no sale the interest payable, as mentioned above, was really the rent payble for the property and thus the tenancy created at first was practically continued. The relationship of landlord and tenant, therefore, in my opinion, existed as between Owen Sukeas and defendant 1 till the interest of Owen Sukeas was purchased by the plaintiff on the Sind May 1919 in the benami of his son, defendant 2, in auction sale. On purchase of the equity of redemption the plaintiff stepped into the shoes of Owen Sukeas and thus H.R. Chamaria & Co. became tenants under him. The tenancy terminated with the end of August 1919 as it was put an end to by a notice to quit.

17. It is quite clear that Galstaun could not legally enter into an agreement for a tenancy with H.R. Chamaria & Co. in the capacity either of gurdian or of agent of the minor son of Sukeas. It follows, therefore, that the suit, as framed must fail, for no privity of estate at any time existed between the plaintiff and Chamaria. At the hearing of the appeal, however, the learned vakil for the respondent' contended that, although he could not support the decree upon the ground upon which it was based by the learned Subordinate Judge, it ought to be affirmed upon an entirely different basis. He urged that Chamaria must have been in possession of the property at all material times either without any title or claiming title through the mortgagor or the mortgagee.

18. As the learned vakil for the appellant admitted that he could not claim title through the mortgagor Chamaria either had no title to be in possession at all or he must rest his claim to be in possession upon the title of Galstaun, the mortgagee. Upon that assumption the learned vakil for the respondent further contended that Galstaun took possession without any pretence of legal right and was liable to be ejected as a trespasser; and that Chamaria, who admittedly was put into possession by Galstaun acting in some capacity or other, was in a like predicament. Being trespassers both Galstaun and Chamaria were jointly and severally liable to pay damages for having been in wrongful possession of the property. That is a different cause of action, involving the consideration of entirely different issues, from the cause of action that was set out in the plaint an convassed at the trial, and learned Counsel who appeared for the appellant strenuously contended that the Court ought not to permit the respondent to set up a new cause of action of this nature for the first time in appeal. It is necessary to decide that question, because, in my opinion, upon the evidence, the learned Subordinate Judge ought to have held that at all material times Galstaun was in possession of the property in suit as mortgagee and not as a trespasser. The oral evidence upon this matter, in my opinion, supported the view that Galstaun took possession of this property as mortgagee with the assent of the mortgagor. That being so, his possession was lawful possession unless and until the assent of the mortgagor to Galstaun remaining in possession of the mortgaged property was withdrawn. At the hearing of the suit no allegation was made, no issue was raised, and no evidence was led by the plaintiff to prove that any time after he purchased the property the plaintiff had refused or withdrawn his assent to Galstaun remaining in possession of the property as mortgigee under the mortgage of 12th May 1914. It may be that if such an issue had been raised at the trial the defendant might have been in a position to prove that the plaintiff in fact consented to Galstaun remaining in possession as mortgagee. But once it is found that Galstaun took possession of the property as mortgagee with the assent of the mortgagor, in my opinion, the mortgagee's possession continued to be lawful possession until the assent of the mortgagor was withdrawn; and if Galstaun's possession was lawful possession it follows that Chamaria's possession was also lawful.

19. The result is, therefore, that, even assuming that the respondent ought to be allowed at this stage of the proceedings to put forward the case that Chamiria was a trespasser, such a contention must fail having regard to the evidence that his been adduced. It is unnecessary to consider the legal position of the filaintiff vis-a-vis the mortgigee Galstaun, and I refrain from expressing any opinion with respect to the legal obligation that existed or may exist between them.

20. For these reasons I agree that the appeal should be allowed and the suit dismissed.


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