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Basanta Kumar Das and ors. Vs. Adarmani Gupta and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in164Ind.Cas.241
AppellantBasanta Kumar Das and ors.
RespondentAdarmani Gupta and ors.
Cases ReferredTarn v. Turner
Excerpt:
mortgage - rights of mortgagee--convenant in mortgage-deed that mortgagor would not lease property during mortgage--property given on permanent lease--lessee, if can sue mortgagee for injunction restraining them from rendering property less valuable--mortgage of tank--excavation by mortgagee by removing silt, how far a prudent act of management. - .....agreement for lease was such as would not be binding on the mortgagee. tarn, however, brought a suit to redeem. the mortgagee resisted the suit on the ground that upon the agreement of lease he had no right to redeem. the court of appeal allowed redemption. lord justice cotton makes these observations at p. 464 page of (1888) 39 ch. d.--[ed.] of the report. after reciting the facts which 1 have recited above he says thus:what was the position tarn had got by demise an interest in the equity of redemption, and as the defendant was not bound at all by any contract to grant him a lease, if a lease had been granted in pursuance of that agreement, then at any time the mortgagee might have interposed and have said to the tenant, tarn, even after having expended money.i am not bound by your.....
Judgment:

R.C. Mitter, J.

1. This is an appeal on behalf of defendants Nos. 1 to 3 and 5 in a suit for injunction. The defendants in the suit are mortgagees. Pro forma defendants Nos. 6 and 7 executed in their favour a mortgage on Jaistha 11, 1328, and these defendants are in possession of the mortgaged premises. The mortgage included amongst other properties the homestead of the mortgagors and three plots, namely, Dags Nos. 402, 403 and 401. Dag No. 402 is a tank and is also Dag No. 401. Those two tanks were in existence from before the date of the mortgage, but they have to a certain extent been silted up. A portion of Dag No. 403 is a piece of firm land in between the two tanks situate on Dags Nos. 402 and 401. It was covered with bamboo clumps. The defendants attempted to dig up that portion of Dag No. 403 which is in between the two tanks and their intention was by such an act to join the two tanks on Dags Nos. 402 and 404, to re-excavate them and to enlarge the sheet of water. For that purpose they will have to remove the bamboo clumps on Dag No. 403 and to lop off or remove certain other trees on the western bank of the tank on Dag No. 402. The plaintiff on Pous 28, 1328, got a lease from the mortgagors and it is by virtue of the rights conferred on him by this lease that he has instituted this suit to restrain the mortgagee defendants from doing the acts which I have recited above. He had got an injunction from both the Courts below.

2. A very interesting point has been argued with great ability by Mr. Roy before me. The point arises in this way. In the mortgage-deed, the mortgagor covenants not to transfer or grant any lease during the subsistence of the mortgage. The mortgage is still subsisting and a permanent lease has been granted by the mortgagors to the plaintiff after the mortgage. Mr. Roy says that having regard to this covenant in the mortgage the plaintiff has no right to institute the suit and he is in the position supporting his arguments he says that a permanent lease granted by the mortgagor after the mortgage is void against the mortgagee. Tie lease to the plaintiff, he says, can be ignored by the mortgagee on another ground also, namely, it is against the covenants given by the mortgagors in the mortgage-deed. On these grounds he says that the suit is not maintainable at the instance of the plaintiff and he cites before me a large number of cases. 1 do not think that the cases cited by him do really help him. The point to be considered is this. Has the plaintiff before me the right to redeem by reason of such a lease It is no doubt true that if the mortgagor grants a permanent lease after the mortgage or a lease not in the usual course of management, the terms and conditions of the same are not binding on the mortgagor and the mortgagee can take steps to turn out the lessee. Where there is a covenant by the mortgagor not to grant a lease during the subsistence of the mortgage, and if a lease is granted by the mortgagor in violation of those covenants, the mortgagee can ignore the lease by putting an end to the lessee's possession. But the question is that if such a lease is granted has the lessee a right to redeem. As between the mortgagor and himself it is a valid lease, and I think that the lessee in the position of the plaintiff before me has the undoubted right to redeem. The question was considered by the Court of Appeal in England in the case of Tarn v. Turner (1888) 39 Ch.D 456 : 57 LJCh. 1085 : 59 LT 742 : 37 WR 276. There, the mortgagors agreed to grant a lease for a term of years to Tarn on certain terms and conditions. The mortgagee was not willing to recognise the lessee and the agreement for lease was such as would not be binding on the mortgagee. Tarn, however, brought a suit to redeem. The mortgagee resisted the suit on the ground that upon the agreement of lease he had no right to redeem. The Court of Appeal allowed redemption. Lord Justice Cotton makes these observations at p. 464 Page of (1888) 39 Ch. D.--[Ed.] of the report. After reciting the facts which 1 have recited above he says thus:

What was the position Tarn had got by demise an interest in the equity of redemption, and as the defendant was not bound at all by any contract to grant him a lease, if a lease had been granted in pursuance of that agreement, then at any time the mortgagee might have interposed and have said to the tenant, Tarn, even after having expended money.

I am not bound by your agreement ; there is no contract as between me and you which you can enforce in a Court of Equity. I have got the estate and have a perfect right to turn you oat at any time.

Will the Court of Equity allow that The Court of Equity always says--What is the real contract When it is a mere security for money, and when the money is tendered with interest, then we direct the mortgagee to divest himself of the legal estate and not to insist on such legal rights as he has. Then why is the tenant, who holds under an agreement such as I have mentioned, not to be entitled to redeem, which is the only way of relieving himself from the effect of the mortgage. in my opinion, it seems so clear that I should have doubled if there could have been so ingenious an argument addressed to us on the point. Here is a man who has a certain interest in the equity of redemption and he may be prejudiced by the action of the mortgagee insisting on his lights as legal owner of the property. the answer must be--Yes, that is quite true, but if the tenant likes to redeem he can do so. The interest which he got from the mortgagor make him to a certain extent an assignee of the equity of redemption, and, therefore, entitled to all the rights which appertain to the owner for the time being, however small his interest in the equity of redemption may be with regard to duration of time. That, as I understand, is recognisad in all the cases.

3. Following the above principle, I hold that as the transaction is binding between the plaintiff and the mortgagors, the pro forma defendants Nos. 6 and 7, the plaintiff has by the lease acquired a right to redeem. This position is also made clear in his notes to Section 65-A by Sir Dinsbaw Mulla on the Transfer of Property Act at p. 382 where some Indian decisions are also noted.

4. The plaintiff, therefore, having the right to redeem is entitled to see that his equity of redemption is not rendered less valuable by act on the part of the mortgagee. If he has got the right to redeem he has got the right to restrain the waste on the part of the mortgagee. On these principles, I hold that the suit is maintainable by the plaintiff.

5. So far as the injunction is concerned, the learned Judges of the Courts below have found that the act which the defendants mortgagees intend to do would be to convert the property and would depreciate the value of the equity of redemption. Moreover, there is an express covenant in the document by which mortgagee undertook not the change the character of the land. I hold that the Courts below have rightly held that the plaintiff has got the right to maintain the suit and that the circumstances of the case required an injunction upon the mortgagee-defendants. But I do not think that the form in which the injunction has been given is justified. The covenant in the mortgage does not prevent the mortgagees from doing all acts which would be necessary in the usual course of management or would be necessary to enjoy the usufruct of the property. The mortgagees have bean restrained from making excavations or altering the character of the land. This covenant would not include within it an act of re-excavating the tanks or removing the silt. An act on the part of the mortgagees to remove the silt of the tanks or to re-excavate them provided the area of the tank is not extended would be regarded in law as a prudent act of management.

6. I accordingly hold that the injunction made by the Court below would stand subject to this modification that the mortgagee defendants would be entitled to remove the silt from the tanks included in the demised premises or to re-excavate the bed of the existing tanks provided they do not extend the area of the tanks in any direction and would also be entitled to utilise the earth in any way they please. Subject to this modification, the appeal is dismissed with costs.

7. With regard to the bamboo clumps, the defendant mortgagees would only be entitled to cut bamboos in the usual course of management. Bat they have no right to remove the bamboo clumps altogether. They can take bamboos for their own requirements for the purpose of repairing huts and so forth.

8. The injunction with regard to the cutting of trees and bamboos is maintained subject to the reservation with regard to the bamboos which I have made above.


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