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Surendro Nath Mitra Vs. Kshitindra Mohun Mitra and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1919Cal314,53Ind.Cas.59
AppellantSurendro Nath Mitra;satish Chandra Sinha and anr.
RespondentKshitindra Mohun Mitra and ors.;kshitindra Mohun Mitra and anr.
Cases ReferredMuhammad Mahbub Ali Khan v. Bharat Indu
Excerpt:
mortgage - mortgagee, whether can question title of mortgagor--benamidar, whether can sue on mortgage--usufructuary mortgagee, liability of, to render accounts--estoppel--evidence act (1 of 1872) and 116. - .....in the first year would be set off against the principal. this process would continue from year, to year-each successive year a decreasing amount would be due for interest and an increasing amount set off against the principal. this militates against the theory that the parties intended to have their rights and liabilities adjusted on the basis of the actual figures mentioned in the document. this view is supported by a significant circumstance. the hastabud or rent-roll would presumably show only the rent payable by the tenants, but there were, as the courts below have concurrently found, other sources of income, for instance that derived from the mana of the river damodar and the julkar. finally, the mortgagees were placed in possession of the alluviated and diluviated lands,.....
Judgment:

1. On the 24th March 1901 the plaintiff exeouted a usufructuary mortgage of land in favour of the first defendant for the benefit of the latter and his father, the second defendant. The defendants went into possession but defaulted to pay rent to the superior landlord, who had the property sold under Regulation VIII of 1819. The third defendant became the purchaser at this sale. The Courts below have concurrently found, contrary to the allegation of the defendants, that the sale was brought about by the fraud of the first two defendants, that the purchase was made by them in the name of their 'relation, the third defendant, and, that their possession of the property has been in no way affected by the proceedings in Court. On the 10th September 1912 the plaintiff commenced this suit for redemption of the mortgage and obtained a 'decree in the trial Court. Three appeals were thereupon preferred, one by the first two defendants, a second by the third defendant, and the third by the plaintiff. The District Judge dismissed the appeal of the third defendant, and modified the decree of the Court of first instance on the appeals of the plaintiff and the first two defendants. This decree has been assailed before us in two separate appeals, one by the first two defendants, the other by the third defendant. On the elaborate arguments advanced by both sides in this Court, two substantial points emerge for consideration, namely, first, should the trial Court have framed an issue to determine whether the plaintiff was the real owner of the property as alleged by him or a benamidar for his father and other members of the joint family, as asserted by the defendants; and, secondly, whether the mortgage accounts have been taken on an erroneous principle, As regards the first point, the Courts below have found that at the date of the mortgage the plaintiff was in possession and that the deed was exeouted in his name. The District Judge, in concurrence with the Subordinate Judge, has held that as the mortgagees took the mortgage from the plaintiff and obtained possession from him, they could not be permitted to question his title, in view of the rule of estoppel enunciated in Section 116 of the Indian Evidence Act. This view is clearly well-founded. As explained in the case of Bhaiganti Bewa v. Himmat Bidyakar 35 Ind. Cas. 7; 24 C. L. J. 103; 20 C. W. N. 1335. enjoyment by permission is the foundation of this doctrine. Two conditions are essential to the existence of the estoppel, namely, first, possession, secondly, permission; when these conditions are present, the estoppel arises, and the estoppel prevails so long as such possession continues. Apart from this, the contention of the appellant that a redemption suit cannot be maintained except by the real owner, is too broadly formulated and is against the balance of judicial authority. The better opinion seems to be that a suit for foreclosure, sale or redemption can be maintained by the person named in the deed as mortgagee or mortgagor, as the case may be: Sachitananda Mohapatra v. Baloram Gorain 24 C. 644; 12 Ind. Dec. (n. s.) 1099., Dagdu v. Balvant Eamchandra Natu 22 B. 820; 11 Ind. Dec. (n. s.) 1130., Ravji Appaji Kulkarni v. Mahadev Bapuji Kulkarni 22 B. 672; 11 Ind. Dec. (N. s.) 1030., Yad Ram v. Umrao Singh 21 A. 380; A. W. N. (1899) 180; 9 Ind. Dec. (n. s.) 951., Ramanujachariar v. Srinivasachariar 9 M. L. J. 103., Alikjan Bibi v. Rambaran Shah 7 Ind. Cas. 166; 12 C. L. J. 357., Sreenath Nag v. Chundernath Ghose 17 W. B. 192., Bhoobunessur Boy v. Juggessuree Chowdhrain 22 W. R. 413., Hara Gobinda Saha v. Puma Chandra Saha 1 Ind. Cas. 522; 11 C. L. J. 47., Kirtibash Das v. Gopnl Jeo 20 Ind. Cas. 499; 19 C. L. J. 193; 18 C. W. N. 814. A similar principle has been applied to leases: Bipeen Beharee Chowdhry v. Ram Chunder Roy 14 W. R. 12.,Donzellev. Eedarnath 16 W. E. 186; 7 B. L. R. 720., Kedarnath Chucker-butty v. Benjamin Donzelle 20 W. R. 352., lnderbuitee Kooerv. Shaikh Muhboob Ali 24 W. R. 44., Jainarayan Bote v. Kadimbini Dasi 7 B. L. R. 723(note)., Purnia v. Torab (l865)Wyman l4., which are mentioned in the case of Atrabannessa v. Safatullah 31 Ind. Cas. 189; 22 C. L. J. 259; 43 C. 504. We are of opinion that the first question mast be answered against the defendants; they accepted the mortgage from the plaintiff and cannot now question his title to redeem the property upon payment of such sum as may be found due by the Court. This view is in harmony with the observations of the Judicial Committee in Muhammad Mahbub Ali Khan v. Bharat Indu 53 Ind. Cas. 54; 23 C. W. N. 321; (1919) M. W.N. 607 (P. C.). on the nature of benami transactions.

2. As regards the second point, the Courts below have held that the first two defendants are bound to render an account as mortgagees in possession. They do not repudiate their liability to account, but contend that the accounts should be taken on the basis of the sums mentioned in the mortgage bond irrespective of the actual profits of the property. The controversy has thus centered round the question, whether the rights and obligations of the parties in this respect are governed by Section 76, clauses (g) and (h), or by Section 77, of the Transfer of Property Act, Under the former section, the mortgagee in possession is liable to keep and give accounts. This is the general rule, subject to the exception formulated in Section 77, which provides that nothing in Section 76, clauses (b) (d), (g) and (h) applies to cases, where there is a contract between the mortgagee and the mortgagor that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of such interest and defined portions of the principal. Now, under Section 58, Clause (d), a mortgage is usufructuary where the mortgagee receives the rents and profits either (i) in lieu of interest only, or (ii) in payment of the mortgage money, or {iii) partly in lieu of interest and partly in payment of the mortgage money. Section 77 consequently protects usufructuary mortgages of the first category as also such usufructuary mortgages of the third category as are entitled to take the profits in lieu of interest and defined portions of the principal. The Courts below have concurrently held that the mortgage before us falls within the general rule; in other words, that it is not of either of the two types just mentioned. The bond states that the mortgagor took a loan of Bs. 1,600, which carried interest at 5 per cent. per annum, and then proceeds to describe the scheme for repayment of the debt. It sets out the annual profit according to the rent-roll, allows a remission for establishment charges and makes a deduction for the rent and cesses. This, it is stated, shall leave a net profit of Bs. 110, out of which Bs. 80 would be set off against interest and the balance against the principal. It is plain that if the actual income from the property were assumed to be that mentioned in the rent-roll, the amounts stated as payable on account of interest and in reduction of the principal could hold good only during the first year. During the second year, the interest would run on a reduced principal, and, at the end of that year, a larger sum than that available in the first year would be set off against the principal. This process would continue from year, to year-each successive year a decreasing amount would be due for interest and an increasing amount set off against the principal. This militates against the theory that the parties intended to have their rights and liabilities adjusted on the basis of the actual figures mentioned in the document. This view is supported by a significant circumstance. The hastabud or rent-roll would presumably show only the rent payable by the tenants, but there were, as the Courts below have concurrently found, other sources of income, for instance that derived from the Mana of the river Damodar and the Julkar. Finally, the mortgagees were placed in possession of the alluviated and diluviated lands, where of the area and income would vary from time to time; it is improbable that the mortgagor should have, intended to make a present to the. mortgagees of the income which might accrue, from accreted lands, or that the mortgagees. should have undertaken, in the event of diluvion, to give the mortgagor credit at all hazards for a definite sum. On an examination of all the provisions of the deed, we are of opinion that the Courts below have correctly held that it does not exonerate the mortgagees from their ordinary-liability to render an account.

3. The result is that the decree of the Dis triot Judge is affirmed and these appeals dismissed with costs.


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