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Rasik Chandra Chakravarti Vs. Jagabandhu Chakravarti and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1929Cal392,113Ind.Cas.904
AppellantRasik Chandra Chakravarti
RespondentJagabandhu Chakravarti and ors.
Cases ReferredRadhay Koer v. Ajodhya Das
Excerpt:
- .....of section 73, t.p. act, which would, in my opinion, indicate that a mortgagee in a case where the mortgaged property is sold for arrears of rent must be confined to the surplus sale-proceeds and cannot follow the mortgaged-property. in support of his contention the learned advocate for the appellant placed reliance on the observations of their lordships in the case of hem chandra v. tafazzel hossein khan [1904] 8 c.w.n. 332. the observation that is to be found at p. 336 runs thus:the effect of this section is, as we understand it, that the mortgagee has no charge upon the property sold for rent, such charge being taken to be extinguished, and transferred, as it were, to the surplus sale proceeds.6. but the case of hem chandra v. tafazzel hossein khan [1904] 8 c.w.n. 332 can in my.....
Judgment:

1. This appeal arises out of a suit brought by the plaintiff to enforce a simple mortgage-bond executed by defendant 1 in favour of plaintiff's father since deceased for a sum of Rs. 100 on the 25th Kartic 1385 B. S. To understand the case properly as also the arguments that were advanced before us it would be necessary to state the facts of the case in some detail. Defendant 1 the mortgagor, executed a first mortgage in favour of defendant 3's father in July 1909. On 11th November 1911 he executed in favour of the plaintiff's father a second mortgage, the suit for enforcement of which has given rise to the present appeal. On 7th August 1915, the property was sold in execution of a rent-decree and purchased by defendant 2. In 1917 the plaintiff brought a suit to have this rent sale set aside on the ground of fraud as also on the allegation that defendant 2 was a benamidar for defendant 1

2. This suit, however, was dismissed on 3rd September 1919. Thereafter on 7th July 1920 defendant 1, the mortgagor, sold the property to defendant 3 in satisfaction of the first mortgage for Rs. 290 and after the sale by defendant 1 to defendant 3 they dispossessed defendant 2 from the property in suit. Thereafter defendant 2 brought a suit for recovery of possession from defendant 3 and defendant 1 and this suit was decreed on 8th May 1923. Plaintiff's suit for enforcement of the mortgage-bond was contested by defendant 2, on, amongst others, the allegation that as defendant 2 had purchased the lands in execution of a decree for arrears of rent the plaintiff could not follow the property in suit for the satisfaction of his mortgage-debt. The Court of first instance gave a decree to the plaintiff and in the decree it was directed that the balance of the sale proceeds after the sale, if any, should be paid to defendant 2. On appeal the lower appellate Court found among other things that defendant 2 was only a benamidar for defendant 1, the mortgagor, and the Court of appeal below dismissed the appeal and confirmed the decree that had been made by the Court of first instance. Defendant 2 has appealed to this Court.

3. A number of points were taken on behalf of the appellate before us and I will take them up seriatim. It was first of all contended that the finding of the lower appellate Court on the question of benami was unnecessary inasmuch as the decree of the first Court which was confirmed by the lower appellate Court was based on the fact that defendant 2 is the real owner of the property and not a benamidar of defendant 1. The decree of the lower appellate Court as it stands whereby the decree of the Court of first instance was affirmed in its entirety is not strictly in accordance with the finding arrived at by the lower appellate Court on the question of benami. But the decree which the lower appellate Court made was made after the lower appellate Court had arrived at its finding on the question of benami and at the time when the lower appellate Court arrived at that finding there was nothing to prevent it from taking up and determining the question whether defendant 2 was the real owner or benamidar of defendant 1.

4. The lower appellate Court has found the question of benami in favour of the plaintiff on two grounds, first, because in a previous litigation between the parties the question that defendant 2 was a benamidar of defendant 1 was raised and in that litigation it was found that defendant 2 was a benamidar of defendant 1 It was said that the Court of appeal below in the previous litigation had not come to any clear finding on the point But the judgment of the appellate Court in that litigation clearly shows that the appellate Court there upheld the finding of the first Court in that litigation to the effect that defendant 2 was a benamidar of defendant 1. The learned Subordinate Judge in the present litigation has also arrived at the same conclusion on the question of benami independent of the determination of the question in the previous litigation. It was contended before us that this finding of the lower appellate Court on the question of benami is wrong in law inasmuch as the learned Subordinate Judge does not fully set out in his judgment the evidence and circumstances to lead to the conclusion that he came to on the point. There is in the judgment of the lower appellate Court, however, a statement that the learned Subordinate Judge had come to his finding on that point on a consideration of the circumstances disclosed in the evidence. The learned advocate for the appellants could not say that there was absolutely no evidence in the ease in support of the finding.

5. The next point taken before us was that the plaintiff was under the provisions of Section 73, T.P. Act, precluded from proceeding against the property and that his only remedy was to proceed against the surplus sale-proceeds under Section 73. There is nothing in the wording of Section 73, T.P. Act, which would, in my opinion, indicate that a mortgagee in a case where the mortgaged property is sold for arrears of rent must be confined to the surplus sale-proceeds and cannot follow the mortgaged-property. In support of his contention the learned advocate for the appellant placed reliance on the observations of their Lordships in the case of Hem Chandra v. Tafazzel Hossein Khan [1904] 8 C.W.N. 332. The observation that is to be found at p. 336 runs thus:

The effect of this section is, as we understand it, that the mortgagee has no charge upon the property sold for rent, such charge being taken to be extinguished, and transferred, as it were, to the surplus sale proceeds.

6. But the case of Hem Chandra v. Tafazzel Hossein Khan [1904] 8 C.W.N. 332 can in my opinion be distinguished from the facts of the present case. In Hem Chandra v Tafazzel Hossein Khan [1904] 8 C.W.N. 332 only one of the properties mortgaged was sold and the purchaser at the sale was no other than the mortgagee himself. That being so, there remained nothing in the property sold which could be followed by the mortgagee, the mortgagee himself having purchased the property. On the other hand, the case of Beni Prosad Sinha v. Rewat Lall [1897] 24 Cal. 746 is in my opinion, a, clear authority against the contention of the learned advocate for the appellant. In this case Beni Prosad Sinha v. Rewat Lal [1897] 24 Cal. 746, (at p. 749) their Lordships observed:

The object of Section 73 in our opinion is to relieve the mortgagee of the effect of the injury which he would suffer by the property which, was a security for his money being sold, and to give him a right over the residue of the sale proceeds. It is not intended in any way to enlarge the interests of persons purchasing at a sale for arrears of revenue or rent. If that had been the intention any subsequent provision of law providing that a sale for arrears of revenue or rent could get rid of an incumbrance would be unnecessary. It is, in our opinion, intended to refer to cases where the law has otherwise provided that the effect of a sale for arrears of revenue or rent should nullify a mortgage.

7. Somewhat to the same effect is the decision in Prem Chand Pal v. Purnimadas [1888] 15 Cal. 546. In the present case the purchase which defendant 2 made at the sale for arrears of rent was subject to the mortgage of the plaintiff which was an incumbrance and which was never annulled. I am therefore of opinion that Section 73, T.P. Act was no bar to the plaintiff's following the mortgaged property to satisfy his. mortgage debt.

8. The learned advocate for the appellant next contended that even if Section 73 does not prevent the plaintiff from proceeding against the property, the plaintiff was by his conduct estopped from enforcing his mortgage claimed against the property which was in the hand of defendant 2 and the conduct of the plaintiff which according to the learned advocate for the appellant estopped the plaintiff enforcing the mortgage claim against the property was the fact that the plaintiff had instituted a suit in 1917 to have the sale set aside at which defendant 2 had purchased the property. I am unable to appreciate the force of this contention of the learned advocate. The plaintiff might have brought a suit to have the sale set aside but I do not understand how it can be contended that he was thereby estopped from instituting a suit to enforce his mortgage claim against the property in suit.

9. Another point that was taken by the learned advocate was that the in cumbrance that was on the property at the time when defendant 2 purchased it was annulled under the provisions of Section 167, Ben. Ten. Act. It appears that defendant 2 after his purchase made an application to the Collector for service of notice under Section 167 but it appears also that that notice was not properly served. The contention on behalf of the appellant was that defendant 2's (the purchaser's) duty ended when he made the application to the Collector and that although there might not have been a proper service of the notice notice of the purchase was in some other way conveyed to the mortgagee. It was urged that in these circumstances it ought to have been held that the incumbrance had been annulled. I do not think this contention is well founded. It has been held in the case of Radhay Koer v. Ajodhya Das [1908] 7 C.L.J. 262 that until the notice has been properly served under Section 167, Ben. Ten. Act upon the incumbrancer, the incumbrance subsists and it is obligatory on the purchaser to show that the notice has been served in the manner prescribed. The finding in the present ease is that no notice under Section 167 had been served in the prescribed way.

10. The next point that was taken before us was that as the plaintiff's mortgage was subject to the first mortgage in favour of defendant 3's father and as defendant 2 got rid of that first mortgage by the suit which he (defendant 2) brought in the year 1920, the plaintiff's claim against the property should be diminished by the amount of the first mortgage. I do not think that there is much substance in this contention. Defendant 2, it is true, brought a suit against defendants 1 and 3 in the year 1920, but that was a suit for recovery of possession and there is nothing to show that the result of that suit was a satisfaction of the mortgage-debt due to defendant 3's father.

11. The last contention advanced before us was in connexion with the question of interest. It was said that the mortgaged property cannot he proceeded against for realization of interest inasmuch as so far is the interest was concerned the covenant was only a personal one. We fail to appreciate the force of this contention. The mortgage-bond would show that the stipulation was that the interest was to be added to the principal at the end of the year. All the contentions that were raised before us therefore fail and the appeal must be dismissed with costs with this little modification only that the balance of the proceeds, if any, which has been directed to be paid to defendant 2 will not be paid to defendant 2 who is only a benamidar.

Garlick, J.

12. I agree.


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