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Manmatha Nath Mookerjee Vs. Sarat Chandra Addy - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1915Cal498,29Ind.Cas.929
AppellantManmatha Nath Mookerjee
RespondentSarat Chandra Addy
Cases ReferredRakhohari Chattaraj v. Bipra Das Dey
Excerpt:
bengal tenancy act (viii of 1885), section 171, scope of - construction--sum paid to avert rent-sale not considered part of mortgage-money--transfer of property act (iv of 1882), section 83, scope of--'money remaining due on mortgage', what includes. - .....brought by a mortgagee to enforce his security. the mortgagee also seeks to recover two sums of money paid by him in satisfaction of the dues of the superior landlord. the mortgage was granted by the first defendant on the 14th july 1909 for a loan of rs. 2,500, which carried interest at 15 per cent, per annum with quarterly rests. the first of the two payments was made by the mortgagee on the 17th march 1910, under section 174 of the bengal tenancy act, to set aside a sale of the mortgaged property held at the instance of the superior landlord in execution of a decree for arrears of rent. the second payment was made on the 15th june 1910, under section 171 of the bengal tenancy act, to protect the mortgaged property from a sale which had been advertised to take place at the instance.....
Judgment:

1. This is an appeal by the sixth defendant in a suit brought by a mortgagee to enforce his security. The mortgagee also seeks to recover two sums of money paid by him in satisfaction of the dues of the superior landlord. The mortgage was granted by the first defendant on the 14th July 1909 for a loan of Rs. 2,500, which carried interest at 15 per cent, per annum with quarterly rests. The first of the two payments was made by the mortgagee on the 17th March 1910, under Section 174 of the Bengal Tenancy Act, to set aside a sale of the mortgaged property held at the instance of the superior landlord in execution of a decree for arrears of rent. The second payment was made on the 15th June 1910, under Section 171 of the Bengal Tenancy Act, to protect the mortgaged property from a sale which had been advertised to take place at the instance of the landlord in execution of another decree of rent. The appellant, the sixth defendant, acquired the equity of redemption under three conveyances from the other defendants, the original owners of the property, executed on the 3rd November 1910, 6th September 1911 and 9th September 1911. The contesting defendant argued in the Court below that the claim for interest on the mortgage should be disallowed, as there had been a valid deposit, under Section 83 of the Transfer of Property Act, of the amount remaining due on the mortgage when the deposit was made in Court. He further contended that no decree should be made in favour of the plaintiffs as against him for either of the sums alleged to have been paid in satisfaction of the dues of the superior landlord. The Subordinate Judge has overruled the first contention and has in part allowed the second. On the present appeal, the decree of the Subordinate Judge has been assailed on three grounds, namely, first, that there was a valid deposit of whatever was due on the mortgage within the meaning of Section 83 of the Transfer of Property Act, and that, consequently, the interest on the mortgage-money ceased to run under Section 84; secondly, that the plaintiff is not entitled to a mortgage-decree for the sum paid by him on the 15th June 1910, inasmuch as it was not a deposit made in accordance with Section 171 of the Bengal Tenancy Act; and thirdly, that the appellant is not personally liable for the money deposited by the plaintiff on the 17th March 1910.

2. The first contention raises a question of considerable importance. It is not disputed that the appellant deposited in Court a sum of Rs. 3,205 on the 16th March 1911 under Section 83 of tie Transfer of Property Act. This sum, it is conceded, represented the amount due from the mortgagor at that date if accounts were taken on the basis of the mortgage alone. The mortgagee, however, refused to accept the money, on the ground that the defendant was bound to deposit, not merely the sum calculated to be due on the mortgage, but also the sums paid by the mortgagee in satisfaction of the claim of the landlords together with interest thereon, inasmuch as, by operation of law, these sums had become assimilated with the mortgage-money. Consequently, the question arises, whether the sum deposited by the mortgagee to save the property from sale was included in the amount remaining due on the mortgage' within the meaning of Section 83 of the Transfer of Property Act, On behalf of the mortgagee, reliance has been placed upon the cases of Anandi Ram v. Dur Najaf Ali Begum 13 A. 195 : A.W.N. (1890) 228, Upendra Chandra Mitter v. Tara Prosanna Multerjee 30 C. 794 : 7 C.W.N. 609 and Rakhohari Chattaraj v. Bipra Das Dey 31 C. 975 in support of the proposition that when a mortgagee has spent money for the necessary protection of his security, he is entitled to add the sums so spent to the mortgage-money. We may here observe parenthetically that in respect of the sum paid on the 17th March 1910 under Section 174 of the Bengal Tenancy Act, the Subordinate Judge has held that the mortgagee has no charge on the property for the realization thereof. It is not necessary for us to decide whether this view is or is not well-founded, because the mortgagee has not taken exception to the decree of the Subordinate Judge on this ground. The only question for consideration is, whether the sum deposited by the mortgagee on the 15th June 1910 under Section 171 of the Bengal Tenancy Act became part and parcel of the mortgage-money and must be deemed included in the amount remaining due on the mortgage on tie 16fch March 1911 when the appellant made his deposit under Section 83 of the Transfer of property Act.

3. Sub-section 1 of Section 171 of the Bengal Tenancy Act provides that when any person having, in a tenure advertised for sale mrlor Chapter XIV, an interest which would be voidable upon the sale, pays into Court the amount requisite to prevent the sale, the amount so paid by him shall be deemed to be a debt, bearing interest at 12 per cent, per annum and secured by a mortgage of the tenure to him. His mortgage shall take priority over every other charge on the tenure, other than a charge for arrears of rent, and he shall be entitled to possession of the tenure as a mortgagee of the tenant and to retain possession of it as such, until the debt, with the interest due thereon, has been discharged. Sub-section 2 then provides that nothing in the section shall affect any other remedy to which any such person would be entitled. It is plain from the terms of Sub-section 1 that the sum paid to prevent the sale is secured by the mortgage of the tenure and that such mortgage takes priority over every other charge on the tenure other than a charge for arrears of rent. The terms of this section maybe contrasted with those of Section 72 of the Transfer of Property Act, which is applicable only to the case of a mortgagee in possession of the mortgaged property. That section provides that where, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he may spend such money as is necessary for its preservation from sale, and may, in the absence of a contract to he contrary, add such money to the principal money, to carry interest at the rate payable on the principal, and, where no such rate is fixed, at the rate of 9 per cent, per annum. Consequently, in a case where Section 72 applies, the mortgagee who spends money for the preservation of the mortgaged property from sale, is entitled to add such money to the principal money. The sum so added carries interest at the rate payable on the principal, except where no such rate is fixed, in which event the interest is 9 per cent, per annum. Section 171 of the Bengal Tenancy Act, on the other hand, provides that the amount paid to prevent the sale carries interest at 12 per cent, per annum, regardless of the rate at which interest is; payable upon the principal money. Section 171 further provides that the statutory mortgage, created thereunder in favour of the person who makes the payment and saves the property from sale, shall take priority over every other charge on the tenure other than a charge for arrears of rent, Consequently, where the payment under Section 171 has been made by a mortgagee, the statutory mortgage which he acquires is entitled to priority even over the charge which he himself holds. It is, in our opinion, impossible so to construe Section 171 as to entitle us to hold that the sum paid for the protection of the property becomes part of the mortgage-money. If the contention of the respondent were well-founded, the additional money would carry interest at the same rate, and would be realisable in the same manner, as the principal. The mortgagee would be deprived of the special advantage conferred upon him by Clause (1) of Section 171, namely, priority over every charge other than a charge for arrears of rent. The view we take is in no way opposed to the decisions upon which reliance has bsen placed. In the case of Anandi Ram v. Dur Najaf Ali Begum 13 A. 195 : A.W.N. (1890) 228 the payment was made by a usufructuary mortgagee in possession, to whom the provisions of Section 73 of the Transfer of Property Act would be applicable. It was in these circumstances that the Court held that when money is paid by a mortgagee to protect the mortgaged property from sale for arrears of revenue, the mortgagee is entitled to add the amount to the principal money due under the mortgage, and the mortgage cannot be redeemed without payment of this money. In the case of Upendra Chandra Mitter v. Tara Prosanna Mukerjee 30 C. 794 : 7 C.W.N. 609 the payment was made by a mortgagee, who was also a co-proprietor in the estate, to prevent a sale for arrears of revenue. The provisions of Section 171 of the Bengal Tenancy Act were obviously inapplicable, nor was the case covered by the terms of Section 73 of the Transfer of Property Act. The Court held that, on general principles, the mortgagee who had made a payment to save the property from a sale, which, had it taken place, would have destroyed his security, was entitled to a lien for the money paid by him and, in support of this proposition, reliance was placed upon the decisions in Leslie v. French (1883) 23 Ch. D. 552 : 52 L.J. Ch. 762 : 48 L.T. 564 : 31 W.R. 561 and Perianna Serraigaran v. Marudainayagam Pillai 22 M. 332 : 9 M.I.J. 166. In the case of Rakhohari Chattaraj v. Bipra Das Dey 31 C. 975 the payment was made to set aside a rent sale under Section 310A. of the Civil Procedure Code of 1882 and the Court held that the mortgagee, who had made the payment, was entitled to a charge upon the property on principles of justice, equity and good conscience. It is plain that the question now raised for decision was neither raised nor considered in any of the cases mentioned. The case before us is clearly governed by the terms of Section 171 of the Bengal Tenancy Act, and we feel no doubt whatever that in view of the specific provisions of that section, the money paid to avert the sale did not become part of the mortgage-money so as to entitle the mortgagee to treat it ns included in the amount remaining duo on his mortgage under Section 83 of the Transfer of Properly Act. It has been ingeniously argued, on behalf of the respondent, as a last resort that Section 171 is not exhaustive, that notwithstanding its provisions, the mortgagee who has made a payment to avert a sale for arrears of rent, is entitled, on principles of justice, equity and good conscience, to claim a charge on the mortgaged property, and that ho may from this standpoint treat the money paid as part of the mortgage-money. This contention is of no real assistance to the mortaggee in this case. Assume that the mortgagee is entitled to repudiate the statutory benefit conferred on him by Section 171 and to fall back on the position he would have occupied independently thereof. Assume also that a mortgagee who has made a payment to save the mortgaged property from sale is, on general principles of equity independently of covenants in the mortgage and of statutory provisions, entitled to a charge upon the mortgaged premises, additional to the original mortgage lien, but of the same grade and rank and to be enforced with and through the mortgage (Jones on Mortgages Volume II, Section 1174). It is plain that, in the present case, the mortgagee has not elected between the two remedies. The election must be made at the time when the right originates, that is, when the payment was made by him under Section 171. On the other hand, the very fact that he has claimed interest at the contract rate (15 per cent, per annum) on the principal amount and at 12 per cent per annum on the sum paid under Section 171, indicates clearly that he relies upon the Statute, which, as we have already explained, does not entitle him to treat the additional sum as amalgamated with the principal. Consequently, the first ground taken by the appellant must prevail. We hold that there was a valid deposit of the sum due on the mortgage on the 16th March 1911, and that interest on the mortgage ceased to run from that date under Section 84 of the Transfer of Property Act.

4. As regards the second ground, it is plain that the contention of the appellant cannot possibly prevail. The case was argued in the Court, below on the assumption that the payment was properly made under Section 171 of the Bengal Tenancy Act. Under that section a payment can be made only by a person who has such an interest in the tenure as would be voidable upon the sale. It is now sought to be argued that the interest of the mortgagee was not liable to be avoided upon the sale, because the execution proceedings had not been taken in conformity with the provisions of Chapter XIV of the Bengal Tenancy Act. To support this contention the appellant invites us to receive evidence of the nature of those proceedings. The application obviously comes too late, for if we were to accede to his request, time would have to be allowed to the respondent to give rebutting evidence. No good reason has been assigned for the grant of this indulgence to the appellant at this stagei The second contention accordingly fails.

5. As regards the third ground, which relates to the sum paid on the 17th March 1910, it has been argued that a personal decree should not be made against the appellant. No doubt, as the puichaser of the equity of redemption, he is prima facie under no present obligation to satisfy the claim of the mortgagee, but in transpires that, under the conveyances which are the foundations of his title, he assumed responsibility for the dues of the landlord to the extent of Rs. 5,648, exclusive of Rs. 3,200 which was kept in his hands by the transferors for the satisfaction of the mortgage. In the case of two out of the three conveyances, reference is expressly made to the liability likely to be imposed on the appellant as the result of the present litigation. The appellant has failed to satisfy us that he has spent the whole of the sum of Rs. 5,048; in other words, that the personal liability imposed upon him by the Court below is in excess of the amount for which he assumed responsibility. The third contention, therefore, fails.

6. The result is that this appeal is allowed in part, and the decree of the Subordinate Judge modified in the manner following. Instead of a decree for Rs. 3,331-12 on account of the mortgage-bond, there will be a decree for Rs. 3,205, and the following passage will be expunged from the decree: And that interest do run at the rate mentioned from the date of suit to three months after the date of the decree; if the defendants Nos. 1-6 do not pay up the decretal amount within the time fixed, the plaintiff will get an order absolute for sale of the mortgaged property and interest will run at the rate of 6 per cent, per annum on the decretal amount with costs.' The desree will also be varied in respect of the amount of costs payable by the appellant to the respondent. In the view we take the plaintiff should not have sued for recovery of the sum due on the mortgage. Consequeuly he cannot be allowed any amount for the Court-fees or Pleader's fees payable on that part of the claim. This means a reduction of Rs. 355 in the amount of costs as tabulated in the schedule to the decree. The coats payable by the appellant to the respondent in the Court below will thus be Rs. 248-10 instead of Rs. 603-10. Subject to variation in this respect the decree of the Court below will stand confirmed. As the appeal has failed upon two of the principal points urged before us, the appellant must pay the respondent his costs in this Court. We assess the hearing fee at five gold mohurs.


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