1. This appeal is directed against an order of dismissal made on an application under Order XXXIV, Rule 5, of the Code of Civil Procedure for a final decree in a mortgage suit. The preliminary decree was made on the 6th April 1910 and the mortgagor was thereby allowed six months to pay the amount, found due. The present application for final decree was presented on the 2nd October 1917. An objection was thereupon taken that the application was barred by limitation. The mortgagees decree-holders urged that they were entitled to the benefit of Section 20, Sub-section (2) of the Indian Limitation Act. The Courts below have overruled this contention and dismissed the application.
2. The case for the mortgagees decree holders is that in 1912 the mortgagor agreed to transfer the equity of redemption to them in satisfaction of their dues under the mortgage decree, that in pursuance of this agreement they entered into possession of the mortgaged properties and that since then they have held possession, though the mortgagor did not carry out his agreement by execution and registration of the proper deeds. On the other hand, on the 1st April 1-917 the mortgagor transferred the property to the fifth defendant, who dispossessed the plaintiffs. Daring the period that the plaintiffs were thus in possession they received the rents and profits, and their contention is that this is sufficient to save the present application from the bar of limitation under Section 20, Sub-section 2 of the Indian Limitation Act. That sub-section provides that 'Where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment for the purpose of Sub-section (1).' Sub-section (1) provides that, 'Where interest on a debt...is, before the expiration of the prescribed period, paid as such by the person liable to pay the debt or...by his agent duly authorised in this behalf,...a fresh period of limitation shall be computed from the time when the payment was made.' The fifth defendant controverts this argument on the ground that as the plaintiffs professed to be in possession, not as mortgagees, but as owners of the disputed property, the receipt of the rent and produce of the land by them cannot be deemed to be a payment to the mortgagee within the meaning of Section 20, Sub-section (1), We are of opinion that this contention is not well founded.
3. In the first place, Section 20, Sub-section (2), does not refer expressly to the intention of the party who receives the rent or produce, and may well be construed to apply wherever mortgaged land is, in fact, in the possession of the mortgagee. In such an event the receipt of the rent and produce of the land may be deemed a payment for the purpose of Sub-section (1). In the second place, where a mortgagee has obtained possession under an invalid agreement for sale his position may be deemed to be that of a mortgagee, when it is established that the agreement was inoperative in law, and he may be called upon to account for the rents and profits as if he were the mortgagee in possession. In support of this proposition reference may be made to the decision of Stuart. V.C., in Robertson v. Norris (1858) 1 Giff. 421 : 114 R.R. 486 : 4 Jur. (N.S.) 155 : 65 E.R. 983; see also Bishop v. Sharp (1704) 2 Vern. 469 : 23 E.R. 902. This does not militate against the proposition that, as in Blennerhassett v. Day (1811) 2 Ball & B. 104 : 53 R.R. 79 and Page v. Linwood (1837) 4 Cl. & F. 399 : 7 E.R. 154, a mortgagee is not bound to account for profits received by him out of the mortgaged property, if they were received in an altogether different character [Parkinson v. Hanbury (1967) 2 H.L. 1 at p. 16 : 36 L.J. Ch. 292 : L.T. 243 : 15 W.R. 642]. The same view was adopted in Ram Awatar v. Tulsi Prosad Singh 11 Ind. Cas. 713 : 14 C.L.J. 507 : 16 C.W.N. 137, Ariyaputhira Padayachi v. Muthukumarasawmy 15 Ind. Cas 343 : 37 M. 423 : 23 M.L.J. 339 : (1912) M.W.N. 854 : 18 M.L.T. 425, and Thotakura Govindu v. Pecakayala Mallayya 31 Ind. Cas. 678, In the second case, Ariyaputhira Padayachi v. Muthukumarasawmy 15 Ind. Cas 343 : 37 M. 423 : 23 M.L.J. 339 : (1912) M.W.N. 854 : 18 M.L.T. 425, a mortgagee obtained possession of the mortgaged premises on the basis of an invalid contract for sale of the equity of redemption. The mortgagor subsequently instituted a suit for redemption. The mortgagee set up a title by adverse possession. The mortgagor pleaded that as the contract for sale had proved abortive, the mortgagee could have been in possession only in his character as mortgagee and that such possession could not be deemed in law adverse to the mortgagor. This contention was upheld and it was ruled that the rights of the parties must be determined on the basis of the events as they had happened, and not on their intentions which had not been carried into effect. In the case before us, the contention of the respondent is self-contradictory. If he maintains that there was a valid contract for sale of the equity of redemption and that the title of the plaintiff thereunder was unimpeachable, on the principle that equity regards that as done which should have been done [Walsh v. Lonsdale (1882) 21 Ch. D. 9 : 52 L.J. Ch. 2 : 46 L.T. 858 : 31 W.R. 109, Maddison v. Alderton (1883) 8 App. Cas. 467 : 52 L.J.Q.B. 737 : 49 L.T. 303 : 31 W.R. 820 : 47 J.P. 821, Syam Kishore v. Umeth Chandra 55 Ind. Cas. 154 : 31 C.L.J. 75 : 24 C.W.N. 463] he has clearly acquired no valid title to the property by his purchase on the 1st April 1917, because, on this assumption, his vendor had no subsisting interest on that date to transfer. On the other hand, if he maintains that the contract for sale was not legally carried into effect, that the mortgagee never obtained a title to the equity of redemption so as to become full owner of the property, he could have been in possession only as a mortgagee and the receipt of the rents and profits by him must attract the operation of Section 20, Sub-section (2). A party litigant, it is well settled, cannot be permitted to take up inconsistent positions in Court to the detriment of his opponent: Giris Chandra Bit v. Bipin Behari Khan 44 Ind. Cas. 159 : 27 C.L.J. 535, Bhaja Chowdhury v. Chuni Lal Marwari 5 C.L.J. 95 at p. 105 : 11 C.W.N. 284. The fifth defendant was entitled to make his choice from the two alternatives mentioned; either of them is fatal to his defense. We hold accordingly that the plaintiffs must be deemed to have been in possession as mortgagees and that the present application is not barred by limitation, inasmuch as Section 20, Sub-section (2) of the Indian Limitation Act is applicable.
4. The result is that this appeal is allowed, the decree of the District Judge set aside and the case remitted to the Court of first instance to be re-tried. We are informed that none of the questions on the merits, in controversy between the parties, has been yet investigated. The Court will consequently proceed to determine the matters in issue between them. The appellant is entitled to his costs both in this Court and in the Court of the District Judge.