1. This appeal arises out of a suit for foreclosure. It has been decreed by both the Courts below, and defendant 6 who represents the equity of redemption is the appellant before me. He was, in fact, the main contesting defendant in the suit. The only ground on which the suit was resisted was that the mortgage security had been extinguished by reason of a deposit made under S.83, T. P. Act. That deposit was made on behalf of the original mortgagors from whom defendant 6 took an assignment of the equity of redemption. The Courts below have taken the view that the deposit was not a valid one under Section 83, T. P. Act, in so far as it was made at a particular season of the year when, under the terms of the bond, repayment had been expressly forbidden. It was said that the stipulation was that the mortgage could be discharged only by payment beyond the fruit season. The deposit however was made in Court while the fruit season was still on. I do not think however, assuming that this particular condition in the mortgage bond continued to be enforcible, that that should in any way, render the deposit invalid. The effect of the deposit would be to stop the running of interest; but, in this case, as the property was held by the mortgagee in lieu of interest, no such question arose. It was quite open to the mortgagee to wait till the fruit season was over before he withdrew the deposit. It is not shown that the mortgagors made a condition of the deposit that the plaintiff was to take out the money forthwith in satisfaction of his dues. There is thus, in my opinion, no substance in the point on which the Courts below refused to give effect to the alleged deposit.
2. There is however a much stronger ground on which the plaintiff may rest his case, and it is that the mere fact of a deposit under Section 83, T. P. Act, would not be sufficient to extinguish his right to foreclosure. In order to appreciate the question which arises on this head, it is perhaps necessary to state a few facts. It appears that after the deposit was made, notice was duly served on the plaintiff by the Court as required by Section 83. Para. 3 of the plaint, in fact, contains an express admission of the receipt of such notice. It may be pointed out in passing that the learned Munsif's remarks in this connexion are not at all correct. He is wrong in saying that the plaintiff denied having received any notice of the deposit. That is not so. It was, in fact, plaintiff's case that on receipt of such notice, he went to the Court to apply for withdrawal of the money, when, however, he learnt that the money had been already taken away by pleader purporting to act under his authority. That pleader is defendant 7 in the present suit. It has been found in effect that this gentleman had not really been authorized by the plaintiff, a finding which, as the learned Judge points out, was not challenged. It is not disputed by the pleader that he did withdraw the money. The position, therefore, is that the money was drawn out by somebody who was not entitled to it, and when the party for whom the deposit had been made sought to apply for it, it was not available.
3. The question arises, in these circumstances, whether the plaintiff thereby lost his right to enforce his security. The learned advocate for the appellant has urged that the fact of the deposit was sufficient to extinguish the right of the plaintiff, and he put it on the ground that the liability of the mortgagors had come to an, end with the making of the deposit. The reason the learned advocate puts forward is not really a reason for the conclusion he seeks to draw. It is only another way of stating the same proposition. For, I do not think that it can be maintained that the liability of the mortgagor can be extinguished without the corresponding right of the mortgagee being extinguished at the same time, or vice versa.
4. What, then, was the effect of the deposit under Section 83, T. P. Act? My attention was drawn to Section 67 of the Act which provides inter alia that in the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage money has become due to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgaged money has been paid or deposited as hereinafter provided, a right to obtain from the Court a decree for foreclosure or sale. It is suggested on the wording of this section that such a right cannot possibly subsist where the mortgage money has been 'paid or deposited as hereinafter provided.' The argument is that the words 'deposited as hereinafter provided ' refer to the mere fact of a deposit irrespective of how the deposit is disposed of. I think, however, that the words, 'as hereinafter provided ' make it perfectly clear that a deposit under Section 83, in so far as it is contemplated here, must mean a deposit which has been accepted and acted on by the mortgagee in terms of that section. Section 83 shows that just as the right to make the deposit is optional with the mortgagor, so is it optional with the mortgagee to accept it in satisfaction of his dues. The use of the word 'may' in the case of both the mortgagor and the mortgagee, leaves the matter in no doubt. As I understand the matter, it is only when the mortgagee has signified his 'willingness' to accept the money deposited in full discharge of the amount due on his mortgage and accepted the money accordingly that the deposit under this section becomes effective for the purpose of extinguishing the liability of the one party and the right of the other. I am unable to accept the view that the mere act of the mortgagor in making a deposit causes an extinction of the security as if there has been valid satisfaction. That result can follow only when the mortgagee applies for' and receives the money in terms of that section.
5. I may in this connexion refer to a case to which my attention was drawn in the course of the argument, Ahmadullah v. Abdul Rahim ('24) 11 AIR 1924 All 26, in which it was held that a deposit made by a mortgagor under Section 83 does not have any effect on the relations between the mortgagor and the mortgagee unless and until such deposit is accepted by the mortgagee. This is based on the ground that the mortgagee is not bound to accept the deposit, and if, and so far as, that is not done, the mortgage necessarily subsists. Reference was made on behalf of the appellant to another case, Nibaran Chandra v. Parbati Charan ('22) 35 CLJ 202, where it was held that Section 83 casts a duty upon the Court to cause the notice of deposit to be served upon the mortgagee, and not on the mortgagor to see that the notice has been served. It does not mean, however, that where notice is served, that fact per se is adequate to extinguish the mortgagee's right to enforce the mortgage.
6. The Acting Chief Justice, no doubt, observed in that case that as no question had been raised as to the sufficiency of the amount deposited, the Court of first instance should have dismissed the. suit which was one for enforcement of the mortgage security. But that observation was made apparently on the basis that all the other elements necessary were present. In other words, it was assumed that the deposit was available for the benefit of the mortgagee. Where, however, as here the facts show that, notwithstanding the receipt of the notice by the mortgagee, and notwithstanding his willingness to accept it, the Court could not place the money at his disposal, in other words, where it is found that the deposit was, for all practical purposes an illusory transaction so far as the party for whom it was intended was concerned, I do not think that there is any principle of law or equity which would make the deposit a legal deposit under S.83 such as might be supposed to affect the rights of the parties one way or the other. The conclusion, therefore, I come to, is that the so-called deposit made by the mortgagors left the plaintiff's right to foreclosure wholly unaffected, and as a result the appeal must fail. The plaintiff will be entitled to the costs of this hearing.
7. I cannot pass over the case without referring to the fact that no steps had been taken for the purpose of doing substantial justice as between the parties. In my opinion, having regard to the admitted facts, there should have been an enquiry as to the circumstances under which defendant 7 withdrew the money and as to the persons to whom he is supposed to have made over the money after such withdrawal. As I have already stated, on the findings as they stand, it is clear that the money was withdrawn by him and paid to a person other than the real mortgagee. If, as a result of the enquiry I have indicated, an order could be made against defendant 7 to bring back the money into Court, it would have helped towards an easy adjustment of the rights and liabilities of the mortgagors and mortgagee as between themselves. I am expressing no opinion as to whether such an enquiry would have been legitimate in a suit for foreclosure, nor must I be understood to suggest that defendant 7's liability to make such refund should be taken for granted. All that I am pointing out is that if an investigation had been made on these lines, it might perhaps have resulted in satisfying all legitimate claims without involving any one. It is pointed out that the decree of the Courts below as drawn up is one for foreclosure and sale. Whether that be so or not, the plaintiff will be entitled merely to a decree for foreclosure on the usual terms. Leave to appeal under Clause 15, Letters Patent, is refused.