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Mahendra Nath Sardar Vs. Mahendra Nath Haldar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1948Cal141
AppellantMahendra Nath Sardar
RespondentMahendra Nath Haldar
Cases ReferredTaramoni Dassi v. Kalipada Haldar
Excerpt:
- .....in sub-sections (8) to (11), it would have been possible to contend that by the mere efflux of 15 years a mortgage by conditional sale with possession to the mortgagee would have been extinguished, but the effect of those sub-sections is that it is not so extinguished, for the mortgagee of such a mortgage has been expressly given the right after the expiry of 15 years to file a suit for a declaration that his dues on the mortgage has not in fact been satisfied by the receipt of the usufruct. the effect of those sub-sections (8) to (11) is that the terms of the mortgage instrument are modified to this extent, namely that the usufruct from the mortgaged premises is to go to satisfy both the principal and interest and that notwithstanding the contract embodied in the mortgage instrument.....
Judgment:

1. The respondent, Mahendra Kumar Haldar and one Harey Krishna Haldar. are the owners of an occupancy holding. On 21st Chaitra 1329 corresponding to 4th April 1923 they mortgaged it by way of conditional sale to the appellants describing the property as mukurari mourasi and the mortgagees were put in possession. According to the terms of the mortgage instrument, the usufruct of the property was to be taken by the mortgagees in satisfaction of interest only. On 26th April 1926 the mortgagees granted a sub-tenancy in respect of a portion of the mortgaged premises to one of the mortgagors, namely Mahendra Kumar Haldar, at an annual rent of Rs. 126 which was later on settled at Rs. 117 per year under Section 104, Ben. Ten. Act. The mortgagees as landlords brought a suit for arrears of rent and cesses for the years 1343 to 1346 B.S. against Mahendra Kumar Haldar. The defendant pleaded inter alia payment of a sum of Rs. 168-4-0 and that he was not liable to pay rent and cesses for the years 1345 and 1346 on the ground that the plaintiff's right to the mortgaged property had ceased on 21st Chaitra 1344 by reason of the provisions of Section 26G, Sub-section (1)(a), Ben, Ten. Act, as amended in 1940. The learned Munsif gave effect to both those pleas, refused to decree rent for the years 1345 and 1346 and gave the plaintiff a partial decree for the remaining period after allowing Rs. 168-4-0 as credit. On appeal the learned Subordinate Judge overruled both those pleas and granted a decree for rent and cesses for the whole period in suit, but rent at the rate of Rs. 117 per year and proportionate cesses. From that decree the defendant preferred a second appeal which was heard by our learned brother Henderson J. The plea of payment was not further agitated before him. The only question raised before him was whether the plaintiffs were entitled to claim rent and cesses for the years 1345 and 1346. He held that they were not. His findings are as follows:

(1) that the defendant was not estopped from saying that the property mortgaged is an occupancy holding;

(2) that it was open to the defendant to take the plea in the rent suit that the plaintiffs' right as landlords had ceased by the end of Chaitra 1344;

(3) that the Court could entertain the said plea in the absence of the co-mortgagor, Harey Krishna Haldar, and.

(4) that the plea was a sound one, (a) inasmuch as there was no repugnancy between Sub-section (1)(a) and Sub-section (8) of Section 26G and that by operation of Section 1(a) the mortgage on which the plaintiffs' right as landlords had rested had ceased by the end of Chaiira 1344.

(5) that in any event Sub-section (8) of Section 26G was inapplicable to the facts of the case, as the mortgage was not subsisting at the date of the commencement of the Bengal Tenancy (Amendment) Act, 1940, it having been extinguished in the year 1938 by the operation of Sub-section (1)(a) of the said section.

(6) that the mortgage 'will be extinguished on the expiry of fifteen years from the date of the registration of the mortgage instrument, unless the mortgagee took action under sub Section (8) of the said section.

2. We think that our learned brother is right in holding that the respondent is not estopped from showing that in fact the property mortgaged is an occupancy holding, that he could take the plea that the right of plaintiffs to get rent from him had come to an end from 1345 and that that defence could be gone into not-withstanding the fact that the co-mortgagor, Harey Krishna, was not a party to the suit. There is nothing on the record to show that the mortgagees had advanced the loan on the faith of the representation made in the mortgage instrument that the property was mokarari mourasi, which in fact it was not, and believing the same to be true.

3. It is settled law that although a tenant who had been inducted on the land cannot say that his landlord had no title to the land at the time of letting, he can show that subsequent thereto his title to the land had came to an end either by transfer or otherwise. That is a legitimade defence open to a tenant, and we do not see any reason why such a defence cannot be considered by the Court on the ground that another person, who is admittedly not a tenant and so an unnecessary party to the rent suit, is not on the record of the suit. At the same time we may say at once that he is not right in saying that the mortgage was not subsisting at the date of the commencement of Bengal Tenancy (Amendment) Act, 1940, and so Sub-section (8) of Section 26G is inapplicable, on the ground that it had been extinguished in 1938 by the operation of Sub-section (1)(a). The question as to whether a mortgage was subsisting on that date cannot, in our judgment, be decided on the terms of Sub-section (1)(a) of the said section. If the mortgage had not been redeemed or foreclosed before that date it will be held to be subsisting on that date within the meaning of sub-section (8).

4. The real question therefore is whether in fact the right of the plaintiffs as landlords had ceased from the year 1345. That question depends upon the further question as to whether the mortgage had been extinguished by operation of law at that time. This question would depend upon the terms of Section 266. The sub-sections of that section which are relevant for the purpose are 1(a), (8), (9), (10) and (11).

5. Before the Bengal Tenancy (Amendment) Act, 1928, an occupancy raiyat could mortgage his holding in any form and on any terms, and the contract would have regulated the rights and liabilities of the parties. After the passhtg of that amending Act if a raiyat executed a complete usufructuary mortgage the mortgagee could not retain possession for more than fifteen years in any event. That was the only restriction put on the rights of a mortgagee under a complete usufructuary mortgage executed after the said amending Act, and that he could not execute an usufructuary mortgage other than a complete usufructuary mortgage.

6. The result of that amendment was that (1) a mortgage executed by a raiyat in any form before the commencement of that amending Act was not affected and the rights and obligations of the parties were to be regulated by their con. tract, and (2) that even after the commencement of the said amending Act it was still open to the raiyat to mortgage his holding in any form, even when the mortgagee was put in possession, other than an usufructuary mortgage as for instance an anomalous mortgage, being a combination of simple mortgage or mortgage by conditional sale and usufructuary mortgage,-and if he did so mortgage his holding the mortgagee in possession would have the rights which the terms of the mortgage instrument had conferred on him.

7. The amending Act of 1938 introduced certain further amendments. It is not necessary for us to notice all of them. Two new sub-sections were added as Sub-sections (1)(a) and (5). The effect of these was that usufructuary mortgages executed before the date of the commencement of the amending Act of 1928 and subsisting at the date of the commencement of the amending Act of 1938 were to be deemed to be 'complete usufructuary mortgages' for the period mentioned in the instrument or for fifteen years, whichever was less. Sub-section (5) provided that the consideration of complete usufructuary mortgage or aforesaid usufructuary mortgages which were to be deemed to be complete usufructuary mortgages, shall be deemed to have been extinguished on the expiry of the period mentioned in the mortgage instrument or of fifteen years from the date of the registration thereof or where there was no registered mortgage instrument from the date when the mortgagee entered into possession whichever was earlier, and in regard to those mortgages the mortgagor could recover possession on the expiry of the said period on an application.

8. It was held that the amendment of 1938 did not affect anomalous mortgages, as for instance mortgages by conditional sale where the mortgagee was put in possession also. This omission was supplied by the further amendment of Sub-section (1)(a) by the amending Act of 1940 and by the amendment all mortgages, including a mortgage by conditional sale, executed before or after 1929, in which the mortgagee was given possession were brought within that sub-section. That Act, however, did not amend Sub-section (s). The Full Bench has decided that Sub-section (5) applied only to complete usufructuary mortgages, and other usufructuary mortgages deemed to be complete usufructuary mortgages by conditional sale executed before or after the commencement of the amending Act of 1928 when the mortgagee was given possession: Badsha Mia v. Mobarak Ali 33 A.I.R. 1946 Cal. 348. The amending Act of 1940 added four other subsections to Section 26G namely (8) to (11). In the Full Bench decision there are some observations at p. 590 on which the respondent strongly relies. The observations are as follows:

It is not correct to say that outside Sub-section (5) there is no provision under which a mortgage could be deemed to have been extinguished before the expiry of the period mentioned in the instrument. Sub-section (1)(a) itself contains such a provision. That sub-section provides that mortgages mentioned therein should be deemed to have taken effect as complete usufructuary mortgages for the period mentioned in the instrument or for fifteen years whichever is less, and the definition of 'complete usufructuary mortgage,' as contained in Section 3 (3) is to the effect that it is a mortgage under which both the loan and the interest thereon are extinguished by the profits arising from the land during the period of the mortgage. The effect of the two provisions read together is that mortgages mentioned in sub-s, (a) will be extinguished on the expiry of fifteen years though the period mentioned in the instrument may be longer. (The italics are ours.)

The Full Bench was dealing with a mortgage by conditional sale executed before the amending Act of 1928 where the mortgagee was put in possession. With great respect, to the learned Judges these observations are not correct in relation to mortgages by conditional sale with possession. The learned Judges in making these observations in a general form overlooked the bearing of Sub-sections (8) to (11). It is gratifying to note that in Taramoni Dassi v. Kalipada Haldar : AIR1947Cal249 the learned Judge who delivered the judgment of the Full Bench when sitting singly rectified the mistake and after taking into consideration Sub-sections (8) and (11) held that a mortgage by conditional sale with possession is not extinguished on the expiry of fifteen years. The actual decision of the Full Bench is no doubt binding on us. But we prefer to follow the observations, though obiter dicta, made in Taramoni Dassi v. Kalipada Haldar : AIR1947Cal249 where the point before us was directly involved and not those observations of the Full Bench, as the point for consideration before the Full Bench was a different one and those observations were made to dissent from one of the reasons given in support in the Order of Reference.

9. If Sub-section 1(a) stood alone in the Act, that is to say if there were no such provisions as are contained in Sub-sections (8) to (11), it would have been possible to contend that by the mere efflux of 15 years a mortgage by conditional sale with possession to the mortgagee would have been extinguished, but the effect of those sub-sections is that it is not so extinguished, for the mortgagee of such a mortgage has been expressly given the right after the expiry of 15 years to file a suit for a declaration that his dues on the mortgage has not in fact been satisfied by the receipt of the usufruct. The effect of those Sub-sections (8) to (11) is that the terms of the mortgage instrument are modified to this extent, namely that the usufruct from the mortgaged premises is to go to satisfy both the principal and interest and that notwithstanding the contract embodied in the mortgage instrument that the usufruct was to be taken to satisfy only interest or part of the interest, or interest and only part of the; principal, that the rate of interest is to be taken as 8 per cent, simple and that if necessary some transactions may be re-opened. If on an accounting made on that basis nothing is found due the mortgage would be taken as extinguished; if something is still found due to the mortgagee the Court is to make an order fixing the period during which the mortgagee is to continue to remain in possession, and it is only after the expiration of period so fixed by the Court that the mortgagees to be taken as extinguished.: The apparent repugnancy between Sub-section 1(a) and Sub-section (e) is avoided as Sub-section (8) by its opening words overrides other parts of the Act (the phrase is 'notwithstanding anything contained elsewhere in this Act.') The last part of Sub-section 1(a) so far as it relates to mortgages by conditional sale with possession must be taken to be modified by the effect of the terms of those Sections (8 to 11) in the manner indicated above. The net result is that such a mortgage shall not be deemed to be extinguished automatically on the expiry of the period mentioned in the instrument or of 15 years whichever is less. It will be deemed to be a complete usufructuary mortgage' only in the sense that notwithstanding its terms the usufruct must go towards the satisfaction of both the principal and interest, and for the accounting interest has to be taken at s per cent, per annum simple. We do not think that the correct interpretation of those sub-sections, taken together, namely of 1(a) and (s) to (11), is not that Sub-section 1(a) extinguishes a mortgage by contional sale with possession by a fiction of law and that the mortgagee can, only nullify the effect of that fiction by instituting a suit under Sub-section (8) after the period of 15 years and by establishing in fact that the usufruct he had taken for the period of the mortgage or for 15 years (whichever is less) had not satisfied the principal and interest of the loan, interest being calculated at 8 per cent, simple. We accordingly hold that the respondent cannot be taken to have established that the mortgage, on which depended the appellants' title as landlords, has been extinguished before 1345 B.S. by the mere proof that it had been executed more than 15 years back from that year or that the mortgagees had been in possession for more than that period. The question whether the mortgage had been extinguished by receipt of the usufruct can only be established in a suit instituted either by the mortgagors or the mortgagees under Sub-section (8) of Section 26-G. The view we are taking would not lead to hardship for the respondent and his co-mortgagor can institute a suit against the mortgagees for declaration under Sub-section (8), Clause (a) or can himself institute such a suit, if his co-mortgagor neglects or refuses to join him by making the latter as a defendant also, in case the mortgagees neglect to institute a suit for declaration under Sub-section (8), Clause (b).

10. The result is that this appeal is allowed, and the judgment and decree of the learned Subordinate Judge restored. The appellants will also have a decree for rent and cesses for the years 1345 and 1346 at the rates decreed for the years 1343 and 1344 with damages and costs as allowed by the learned Subordinate Judge. They will have costs of this appeal and the second appeal.


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