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Uttam Chandra Daw Vs. Raj Krishna Dalal and anr. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in55Ind.Cas.157
AppellantUttam Chandra Daw
RespondentRaj Krishna Dalal and anr.
Cases ReferredAshutosh Sikdar v. Behari Lal Kirtania
Excerpt:
transfer of property act (iv of 1882), section 99 - sale in contravention of provisions of section--purchase by mortgagee--redemption, suit for, by mortgagor without setting aside sale, whether maintainable. - sanderson, c.j.1. the question referred to the full bench is 'where a mortghgee has, in contravention of section 99 of the transfer of property act, attached the mortgaged property and brought it to sale and purchased it himself, can the mortgagor or his transferee without first getting the sale set aside successfully maintain a suit for redemption of the property.'2. the plaintiff sued for redemption of what was described by the learned district judge as a usufructuary mortgage bond in respect of 18 bighas of land executed in favour of uttam chandra daw (defendant no. 1) by sayemi bibi, takim gazi and tabrez (or tamraj) sardar on 6th april 1891. possession was given to defendant u.c. daw under the bond, but on the same day the mortgagors executed a kabuliyat in favour of the.....
Judgment:

Sanderson, C.J.

1. The question referred to the Full Bench is 'where a mortghgee has, in contravention of Section 99 of the Transfer of Property Act, attached the mortgaged property and brought it to sale and purchased it himself, can the mortgagor or his transferee without first getting the sale set aside successfully maintain a suit for redemption of the property.'

2. The plaintiff sued for redemption of what was described by the learned District Judge as a usufructuary mortgage bond in respect of 18 bighas of land executed in favour of Uttam Chandra Daw (defendant No. 1) by Sayemi Bibi, Takim Gazi and Tabrez (or Tamraj) Sardar on 6th April 1891. Possession was given to defendant U.C. Daw under the bond, but on the same day the mortgagors executed a kabuliyat in favour of the above-mentioned defendant, whereby they attorned as tenants to him. Subsequently the mortgagors, as tenants, made default in payment of rent and the above mentioned defendant sued Sayema, Takim and Tabrez and obtained a decree. During the course of the hearing before the Full Bench a discission arose as to the nature of the suit and the decree. The learned Vakil for the plaintiffs has supplied us with a translation of the decree. It is headed 'Bent decree' and after reciting that the defendants had been given possession upon a stipulation to give half of the crops grown on the lands and half of the fruit of the trees on the land in lieu of interest and reciting that the three defendants bad not given the plaintiff the share of the Aman paddy and that the plaintiff bad brought the suit for Rs. 97 3 annas 4 gandas, being the value at the rate of Rs. 36 per bis of 2 bis 14 aris, plaintiff's half share of 5 bis 8 aris, the entire produce of 12 bighas of land at the rate of 9 aris per bigha, it was thereby ordered and decreed that the suit be decreed upon contest, that the plaintiff do recover from the defendants Rs. 98-14-15 gandas as per account therein set out: the decree directed that the defendants should pay the above amount to the plaintiff within 15 days from the 18th May 1892, failing which the defendants would be ejected from the land. The decree was dated the 25th May 1892. In execution of this decree the above-mentioned defendant, U.C. Daw, purchased the equity of redemption on the 5th December 1892: the sale was confirmed in January 1893, the sale certificate was granted in April 1893 and the defendant took possession in 1895.

3. Sayemi, Takim and Tabrez died and any interest they had was inherited by Tabrez's widow, who was also the daughter of Sayemi. Tabrez's widow on the 25th April 1902 sold what purported to be the equity of redemption in respect of the mortgaged land to K.N. Bhattacharji, the father of the defendants Nos. 5 and 6. After the death of K.N. Bhattacharji, viz, on 16th May 1913, the defendants Nos. 5 and 6 sold their interest in the land to the plaintiffs. On the 20th November 1913 the plaintiffs brought this suit in which they claim the right to redeem the mortgage of the defendant U.C. Daw.

4. This case was before the Full Bench on a previous occasion and it was then considered material to have a finding upon the questions (1) whether the appellant (i.e., the defendant U.C. Daw) obtained the permission of the Court to bid at the sale of the equity of redemption on the 5th December 1892; and (2) whether the mortgagors consented to the sale thereof to the appellant, on. the ground that if the mortgagee had obtained leave to bid, he would be in the same position as an independent purchaser. If such leave had been obtained or if the mortgagors had consented to the sale, the question submitted to the Full Bench would not arise. Accordingly, the Full Bench directed that the record of the Execution Case No. 1128 of 1892 in the Court of the Munsif at Basirhat should be sent to this Court with a finding by the lower Appellate Court on the above. mentioned two questions.

5. It appears that the record of the execution case was destroyed, in accordance with the rules, many years ago.

6. The learned District Judge held that there was no evidence relating to the first point, but came to the conclusion that it would be an irregularity for the Court to allow the decree-holder to bid at the sale without taking the express permission of the Court and that, therefore, as he did bid at the sale, it should be presumed that he had the permission of. the Court to do so, and he relied upon the provisions contained in Section 114 of the: Evidence Act and Illustration (e). As to the second question the learned Judge found that there was no evidence relating thereto and that in view of his first finding the second question was not material.

7. On the further hearing of this case by the Full Bench it was contended on behalf of the plaintiffs that the presumption that the decree-holder obtained permission to bid should not be drawn : 1st, because it was contrary to the provision of Section 99 of the Transfer of Property Act, 1682 (which was in force at the time of the sale) for the decree-holder, who was the mortgagee, to bring the property to sale otherwise than by instituting a suit under Section 67 and 2nd, that even if leave to bid at the sale were given by the Court, it would have been beyond the jurisdiction of the Court to give such leave in view of the provisions of Section 99 of the Transfer of Property Act.

8. Having regard to the terms of this Section and in view of the absence of any evidence on the question, in my judgment it would not be right to draw the inference that leave was given to the defendant U.C, Daw to bid at the sale of the equity of redemption.

9. Having regard to the Full Bench decision in Ashutosh Sikdar v. Behari Lal Kirtania 35 C. 61 : 11 C.W.N. 1011 : 6 C.L.J. 320 it must be taken that the sale of the equity of redemption in contravention of the terms of Section 99 of the Transfer of Property Act was not a nullity, but an irregular and voidable sale, liable to be avoided on proof that the terms of that Section had been contravened. It was contended, however, on behalf of the defendant U.C. Daw that the terms of this Section had not been contravened, because the defendant had not brought the property to sale in his capacity of mortgagee, but in bis capacity of landlord, and that the amount dee-reed in his suit was due to him as landlord from the plaintiffs as tenants under the kabuliyat.

10. It was admitted that if the defendant U.C. Daw had purchased the equity of redemption in the capacity of landlord in execution of a decree for a claim, irrespective of the mortgage, he would be in the same position as a third party and the mortgagors must set aside the sale before they could sue for redemption, but it was contended on behalf of the plaintiffs that although the decree might, in form, be a decree for arrears of rent, it was in substance a decree for interest due under the mortgage. The decree is described as a rent decree,' the amount decreed is the value of a certain quantity of paddy and costs and there is a direction in the decree that if the defendants failed to pay the amount within the time specified in the decree, the defendants were to be ejected from the land. On these facts it appears to me that the appellant did not bring the equity of redemption to sale in his capacity of mortgagee, but in his capacity of landlord, and if that be the correct view, that is sufficient for the disposal of this case and the appeal should be allowed. I hesitate, however, to base my judgment solely on this ground, for although the lower Appellate Court found that the suit was for rent, the point now relied upon by the plaintiffs in this suit, viz., that although in form it was a suit for rent, it was in substance and reality a claim for arrears Of interest under the mortgage, does not seem to have been considered.

11. And the learned Judges who referred the matter to the Full Bench seem to have assumed that the appellant brought the equity of redemption to sale in his capacity of mortgagee and in execution of a decree for the satisfaction of a claim arising under the mortgage. In view of this and as we have not a translation of the material documents, viz., the mortgage bond, and the kabuliyat before us, I think it is necessary to consider the case on the assumption made by the learned Judges who referred the matter to the Full Bench.

12. The learned Yakil for the plaintiff contended, first, that under the Bale of 5th December 1892 the equity of redemption did not pass to U.C. Daw and that the money paid by him at the sale should be treated as nothing more than a further advance by him on the security of the mortgage.

13. Secondly, that if the equity of redemption did pass by the sale to 17. C. Daw, he held it as trustee for the mortgagors and their assignees, the plaintiffs, who are entitled to redeem on payment of the mortgage debt plus the money paid by the mortgagee at the sale and any money which may have been properly expended by the mortgagee, while in possession, for the protection and preservation of the mortgaged property.

14. In view of the decision of the Fall Bench of this Court in Ashutosh Sikdar v. Behari Lid Kirtama 35 C. 61 : 11 C.W.N. 1011 : 6 C.L.J. 320 to which I have already referred, in my judgment the first point is untenable. It must now be held that the sale of 5th December 1892 was not void, but merely voidable. No steps have been taken to set aside the sale in accordance with the prescribed procedure and the time for so doing has long since passed. Conseqnently the equity of redemption purchased by the appellant U.C. Daw at the sale passed to him and no title to the equity of redemption paseed either by the conveyance of 25th April 1302 to K.N. Bhattachcrjee or by the conveyance of 16th May; 1913 to the plaintiffs. It should be noted that the learned Vakil for the plaintiffs said that he regarded his second point as the better of the two, and it is obvious that the first is inconsistent with the second which was based upon the allegation that the mortgagee held the equity of redemption as a, trustee for the mortgagors.

15. With regard to the second point, assuming for the moment (hut without deciding) that by reason of the sale of 5th December 1892 the appellant U.C. Daw became trustee of the equity of redemption for the mortgagors, it appears to me clear that this suit would not lie. The suit is based upon the ground that the plaintiffs are the owners of the equity of redemption and are, therefore, entitled to redeem the mortgaged property, whereas this argument is based upon the assumption that the property in the equity of redemption passed by the sale to the appellant U.C. Daw. If that he so, the plaintiffs had no interest in the property except so 'cestui que trust' and they could not sue for redemption. This is further made clear by the accounts which upon the basis of this argument would have to be taken as between trustee and cestui que trust, accounts which would be different from those taken in a suit for redemption.

16. Upon the above-mentioned assumption the suit is really one to enforce a trust, and if it were treated as such it would be out of time, for Article 148 of the Limitation Act of 1908 would not apply, but Article 120 would apply. The sale was in December 1892 and the suit was not brought until the 20th November 1913, viz., after a lapse of nearly 21 years.

17. These considerations show, in my judgment, that the question referred to the Fall Bench should be answered in the negative.

18. This conclusion does not, in my judgment, conflict with the principle laid down in the dictum of Lord Davey in Khiarajmal v. Daim 32 C. 296 at p. 312 : 2 A.L.J. 71 : 1 C.L.J. 584 : 7 Bom. L.R.I. : 9 C.W.N. 201 : 32 I.A. 23 : 8 Sar. P.C.J. 734 (P.C.) viz.: Their Lordships throw no doubt on the principle, which has been acted on in many cases in India, that a mortgagee cannot, by obtaining a money, decree for the mortgage debt, and taking the equity of redemption in execution, relieve himself of his obligations as mortgagee,: or deprive the mortgagor of his right to redeem on accounts taken and with the other safeguards usual in a suit on the mortgage.' The mortgagor's right in this respect is provided for in Section 99 of the Transfer of Property Act, 1882, but inasmuch as it has been decided by the Full Bench of this Court that a sale, though held in contravention of Section 99, is not a nullity but is an irregular and voidable sale, liable to be set aside merely on proof that the terms of the section have been contravened, it follows that, under the circumstances mentioned in the question referred to the Full Bench, the mortgagor, in order to establish and enforce his right of redemption and to have accounts taken as between mortgagor and mortgagee, must get the sale set aside in accordance with the procedure and within the time prescribed, before he can sue for redemption.

19. In my judgment the question referred to the Full Bench should be answered in the negative, the appeal should be allowed and the suit should be dismissed with costs both in this Court (including the reference) and in the Courts below.

Woodroffe, J.

20. As I said in Pancham Lal Chowdhury v. Kishun Pershad Misser 6 Ind. Cas. 47 : 12 C.L.J. 574 : 14 C.W.N. 579 the question which has been debated before us is open to argument but as this Bench is of opinion that a suit to redeem will not lie where there has been a sale and purchase by the mortgagee which has not been set aside, I accept that view. Whether a suit in such a case to have it declared that the mortgagee purchaser is a trustee for the mortgagor will lie, need not be decided because this is not such a case, and if it were, it would be barred for the suit is brought 21 years after the sale. In my opinion neither Article 148 nor Section 10 of the Limitation Act would apply 'to such a suit, if maintainable. As the terms of Article 148 show, it refers to a suit for redemption and not to a suit where the equity of redemption has passed out of the plaintiff who teaks to enforce a trust in his favour upon the taking of an account, which is not that of an ordinary mortgage suit.

Mookeejee, J.

21. The subject-matter of this litigation is a tract of land, 18 bighas in area, held in Mourasi Mokarari Jote right by one Zahid Gazi under Joanendra Nath Roy Chowdhuri and others. On the death of Zhid Gazi, the tenancy was inherited by three persons, who on the oth April 1891 mortgaged it by way of conditional sale to secure a loan of Rs. 170 taken from Uttam Chandra Daw, the first defendant in this suit (now appellant before us). Under the terms of the mortgage instrument the mortgagee became entitled to possession of the premises, and was to enjoy the profits in lieu of the interest which was fixed at the rate of Rs. 37-8-0 per cent. per annum. The mortgage money was made re-payable on the 2th April 1898. On the date of execution of the mortgage, the mortgagors took a lease of the lands from the mortgagee. The lease recited that the mortgagee had taken possession and had agreed to let out the lands to the mortgagors for the period of the mortgage, that is, till the 12th April 1893. The tenants were to cultivate the lands, take half the produce themselves and deliver the other half to the lessor or Rs 50 as the value thereof. The lease further contained a provision that if the tenants failed to deliver the produce or pay the money value thereof in due time, the lessor would be at liberty to eject them from the lands. On the 28th January 1892 the lessor sued the lessees for value of crops due, and for ejectment if the sum decreed should not be paid within the time pres cribed by the Court. The records of that suit have been destroyed, but as the decree made therein is described on the face of it as ' rent decree, ' there can be no doubt that the suit was treated as one for rent. The suit was decreed on the 18th May 1892 for a sum of Rs. 98-4 9 and the decree contained a direction that the judg-ment-debtors 'should be ejected, if the amount adjudged due was ' not paid up within fifteen days. The sum was not paid, with the result that the decree was executed and the lessees were ejected on the 4th July 1892. The tenancy thus came to an end. The decree-holder subsequently took out execution of the decree for realisation of the money due. On the 5th December 1892, the right, title and interest of the judgment-debtors in the Jote (that is, the equity of redemption) was sold by auction and was purchased by the decree-holder himself; the sals was duly confirmed on the 5th January 1893, and the sale certificate was granted to the purchaser on the 18th April 1893; the equity of redemption thus became united with the interest of the mortgages. On or about the 24th April 1902, however, one of the mortgagors, who had by inheritance taken the shares of the other two, professed to sell the equity of redemption to one Khiti Nath Bhattacharjya for a sum of Rs. 81. On the 16th May 1913, the sons of Khiti Na h Bhitacharjya, who had died manw tile, con veyed the equity of redemption to the plaintiffs for a sum of Rs. 350, the purchasers retained out of the consideration money Rs. 170 and undertook to pay the, dues of the mortgagee. On the 20th November 1903, the plaintiffs on the strength of their purchase of the equity of redemption instituted the present suit against the mortgagee for redemption and recovery of possession. The mortgagee resisted the claim on the ground that as the equity of redemption had vested in him on the 5th December 1892, the plaintiffs had acquired no title thereto by their purchase and were consequently not competent to redeem the property. The Courts below have concurrently negatived this defence and have held, on the authority of Pancham Lal Chowdhury v. Kishun Pershad Mister 6 Ind. Cas. 47 : 12 C.L.J. 574 : 14 C.W.N. 579 that notwithstanding his purchase of the equity of redemption, the mortgagee was liable to be redeemed by the mortgagors or their representatives-in-interest. The mortgagee defendant appealed to this Court. The appeal was heard in the first instance by Chitty and Walmsley, JJ., who held that the decision in Pancham Lal Chowdury v. Kishun Per shad Misser 6 Ind. Cas. 47 : 12 C.L.J. 574 : 14 C.W.N. 579 was inconsistent with that of the Full Bench in Ashutosh Sikdar v. Behari Lal Kirtania 35 C. 61 : 11 C.W.N. 1011 : 6 C.L.J. 320 and consequently expressed a doubt as to its correctness. They accordingly referred the following question to a Full Bench for decision:

Where a mortgagee has, in contravention of Section 99 of the Transfer of Property Act, attached the mortgaged property and brought it to sale and purchased it himself, can the mortgagor or his transferee, without first getting the sale set aside, successfully maintain his suit for redemption of the property.

22. The matter was heard by a Full Bench (Sanderson, C.J., Woodroffe, J., Chitty, J., Fletcher, J., and Chatterjea, J.) on the 20th November 1918 when the Court gave the following direction:

We direct that the record in Execution Case No. 1128 of 1892 in the Court of the Munsif of Basirhat be sent up to this Court with every despatch, with a finding by the lower Appellate Court as to whether the appellant obtained the permission of the Court to bid at the sale of the equity of redemption on the 5th December 1892 or whether the mortgagor consented to the sale thereof to the appellant.

23. The District Judge has reported that the record of the execution case was destroyed in accordance with the rules many years ago, but he has held that on the principle deducible from Illustration (e) to Section 114 of the Indian Evidence Act, viz., that the Court may presume that judicial and official acts have been regularly performed, the inference may legitimately be drawn that the mortgagee obtained the permission , of the Court to bid at the sale of the equity of redemption on the 5th December 1892. The case has now been placed before the present Full Bench for final disposal.

24. There has been considerable discussion at the Bar upon the question, whether the District Judge has correctly applied the presumption mentioned in Section 114 of, the Indian Evidence Act. On the one hand, we have been pressed to hold that after the lapse of such a long period, the presumption may well be raised that the mortgagee decree-holder obtained the requisite permission as was contemplated in Section 294 of the Code, 1882, which has now been replaced by Order XXI, Rule 72, Civil Procedure Code, 1908; this is supported by the observation of Scott, C.J., in Sahactu Manaji v. Devlya Jaba Mahar 14 Ind. Cas. 780; 14 Bom. L.R. 254 We have been asked on the other band to hold that as the purchase by the mortgagee was in direct contravention of Section 99 of the Transfer of Property Act, it is highly improbable that the decree holder could have ventured to ask for the leave of the Court. I am inclined to take the view that leave was not obtained, but, in my opinion, it is not necessary to determine definitely whether leave was or was not granted, because the rights of the parties are not affected by the answer which may be given.

25. It is indisputable that the sale in this case was held in contravention of Section 99 of the Transfer of Property Act, which was in force at the time and provided as follows:

Where a mortgagee, in execution of a decree for the satisfaction of any claim, whether arising under the mortgage or not, attaches the mortgaged property, he shall not be entitled to bring such property to sale, otherwise than by instituting a suit under Section 67, and he may institute such suit, notwithstanding anything contained in the Code of Civil Procedure (1882), Section 43.

26. The sale was not a nullity, bat an irregular sale liable to be avoided; merely on proof that the terms of the section have been contravened Ashuiosh Sikdar v. Behari Lai Kirtania 35 C. 61 : 11 C.W.N. 1011 : 6 C.L.J. 320. It unquestionably operated to transfer the equity of redemption from the mortgagors to the mortgagee, but it might have been set aside at the instance of the judgment debtors on an application under Section 244 of the Civil Procedure Code, 1882. Such application was not made either before or after confirmation. The sale, therefore, became final and conclusive, and under Section 36, Civil Procedure Code, the title to the property sold (that is, the equity of redemption) vested in the purchaser from the date of confirmation, so far as regards the parties to that suit and persons claiming through or under them. The period of limitation for cancellation of the sale by an appropriate proceeding has long since expired, and as no fraud is proved, no question of extension of time can arise. Prima facie, then, the mortgagors lost the equity of redemption on the 6th January 1893, and the conveyances of the 24th April 1902 and 16th May 1913 passed no title to the successive transferees. In this view, the plaintiffs are not entitled to redeem the mortgage property. The right of redemption, no doubt, exists from the moment when the mortgage is made and the security is redeemable on payment of the debt during the subsistence of the mortgage. But the right to redeem is not a personal right; it is an interest in the property mortgaged, so that when the equity of redemption has been sold away, the mortgagor can no longer exercise his right of redemption. This view has been adopted in Dharanikota Venkayya v. Budharazu Surayya Garu 30 M. 362 : 17 M.L.J. 325; Sahadu Manaji v. Devlya Jaba Mahar 14 Ind. Cas. 780; 14 Bom. L.R. 254; Lal Bahadur Singh v. Abharan Singh 27 Ind. Cas. 795 : 37 A. 165 : 13 A.L.J. 138 and Sheo Narain Ojha v. Bam Jatan Ojha 41 Ind. Cas. 533 : 2 P.L.J. 587 : 1 P.L.W. 729 : (1917) Pat. 373. These decisions are based on the now familiar doctrine that an irregular sale must be formally vacated and cannot be ignored as a nullity. This was enunciated in the dearest possible terms by the Judicial Committee in Malkarjun v. Narhari 25 B. 337 10 M.L.J. 368 : (P.C.) : 27 I.A. 216 where they reversed the judgment of the majority in Erava v. Sidramappa 21 B. 424 In that case a mortgagor sued to redeem, although the equity of redemption had been sold away in execution at the instance of a judgment creditor and had been purchased by the mortgagee. Lord Hob-house explained that the sale was irregular, because held in contravention of the requirements of the Civil Procedure Code as to service of notice upon the representatives of the deceased judgment debtor, but it was essential that the sale should first be set aside, as it was a sale held by a Court with jurisdiction. There is consequently no escape from the position that at the date of institution of this suit, the plaintiffs had acquired no title whatever to the equity of redemption and were not entitled to redeem.

27. A desperate attempt, however, has been made on behalf of the plaintiffs to take the case out of the operation of the principle just explained. It has been argued that the sale of the equity of redemption was held in execution of a decree for the satisfaction of a claim arising under the mortgage, that the mortgagee, purchaser at a sale held in these circumstances, took the property in trust for the mortgagor, and that he might accordingly be called upon at any time within 60 years (under Article 148 of the Limitation Act) to submit to redemption. There is no solid foundation for this contention. The argument is based on the assertion that the sale took place in execution of a decree for the satisfaction of a claim arising under the mortgage. But as has been already explained, the suit was for recovery of rent, although the sum recovered was to be applied in satisfaction of interest due on the mortgage, and it would be an abuse of language to maintain that the suit was for recovery of arrears of interest on the mortgage. Two instructive cases on this point are furnished by the decisions in Anonymous case 23 A. 341n and Chimman Lal v. Bahadur Singh 23 A. 338 : A.W.N. (1901) 95. In the first of these cases a mortgage and a lease were, as in the case before us, executed simultaneously. Sir John Edge, C.J., observed that the grant of such a lease by the mortgagee to his mortgagor had been invariably treated as a transaction in the nature of a lease and as putting the parties in exactly the same position as that in which they would have stood, if, instead of' having been mortgagor and mortgagee, they were the Zemindar and any other person taking a lease of the land. In the second case, precisely the same view was adopted, and it was ruled that the effect of the kabuliyat was to establish between the parties the relationship of landlord and tenant, with the result that a suit on the kabuliyat would lie only in a Revenue Court. A similar view was taken in Khuda Bakhsh v, Alimunnissa 27 A. 313 : A.W.N. (1904) 273 : 1 A.L.J. 715 and the earlier decisions in Altof Ali Khan v. Lalta hrosad 19 A. 486 : A.W.N. (1897) 128 and lmdad Hasan Khan v. Budri rasad 20 A. 401 : A.W.N. (1898) 212 mast be deemed to have been decided on their special facts. In the case before us, the suit was apparently described as a suit for rent; this inference may safely be drawn from the description of the decree, as also from the entries in the register of suits. The decree was made obviously under Section 66 of the Bengal Tenancy Act (which prescribes a period of grace for fifteen days) and ejectment was obtained under Section 89, I feel no doubt that the sale cannot be deemed to have been held in execution of a decree for enforcement of a claim under the mortgage. This conclusion completely sweeps away the foundation for the argument of the plaintiffs-respondents.

28. But even if we assume that the sale was held in execution of a decree arising out of a claim on the mortgage, the case for the plaintiffs is beset with difficulties. Their contention is that although the equity of redemption has been sold away and it is no longer possible for the mortgagors to obtain a re-transfer thereof by avoidance of the sale, they are still entitled to recover the property from the mortgagee on payment of the mortgage money and the purchase money at the execution sale, In support of this argument they have invoked the aid of a principle of equity enui ciated by Lord Davey in Khiarajmal V. Daim 27 Ind. Cas. 795 : 37 A. 165 : 13 A.L.J. 138 in the following terms:

A mortgagee cannot by obtaining a money decree for the mortgage debt, and taking the equity of redemption in execution relieve himself of his oh ligations as mortgagee, or deprive the mortgagor of his light to redeem on accounts taken and with the other safeguards usual in a suit on the mortgage.

29. According to Lord Davey, this principle of equity had been acted on in many cases in India. One of the earliest cases where the doctrine was applied is that of Kamini Debi V. Ram lochan Sirkar 5 B.L.R. 450 at p. 459. There Macpherson, J., held that a mortgagee cannot, in execution of a simple decree for money (the repayment of which is secured by mortgage , properly attach and sell the mortgagor's equity of redemption in the property mortgaged; but, if be does so and purchases it himself, he becomes a trustee for the mortgagor against whom he cannot acquire an irredeemable title. Reliance was placed upon Bournes v. Grazebrook (1897) 3 Merivale 200 : 17 R. R. 62 : 36 E.R. 77 to show that where a mortgagee has a power of sale, if he sells in exercise of that power, be cannot himself purchase, that is to say, if he does purchase, he will be declared to be merely a trustee for the mortgagor. Reference was also made to the judgment of Norman, J., in Ramlochun Sirkar v. Kamini Debi 5 B.L.R. 46 note, Ramlochan Sircar v. Kaminee Dabee 10 B.L.R. 6 note and of Phear, J., in Brajanath Kundu v. Gobindmani Dasi 4 B.L.R. (O.C) 83; See also the judgment of Markby, J., in Neeruniun Mookersee v. Oopendro Narain Deb 10 B.L.R. 57. The question arose again in the case of Mahabir Pershad Singh v. Macnaghten 16 C. 682 : 16 I.A. 107 (P.C.) : 5 Sar. P.C.J. 45 and Lord Watson held that the decision of Macpherson, J, in Kamini Debi v. Ramlochan Sirkar 5 B.L.R. 450 at p. 459 could be supported, only in cases where the mortgagee purchased without leave of the Court, for leave to bid puts an end to the disability of the mortgagee and puts him in the same position as any independent purchaser. It may be assumed, then, that in 1882, at the time when the Transfer of Property Act was passed, the rule had been recognised by our Courts that where a mortgagee had obtained a money dices for the mortgage debt and had, without the leave of the Court, taken the equity of redemption in execution, he as, on equitable grounds, liable to be treated, notwithstanding his purchase, as a mortgagee holding the property in trust for the mortgagor. The question necessarily arises, what was the effect of Section 99 of the Transfer of Property Act? The Legislature recognised the prevailing rule of equity, but modified its application in two directions, in the first place, the mortgagee was prohibited to purchase the equity of redemption in execution of his own decree, whether it was a money decree for the mortgage deb; or for a claim related thereto or whether it was a decree for a claim entirely unconnected there with. In the second place, the portions was absolute, and the Legislature did not contemplate a purchase by the mortgagee even with the leave of the Court, In these circumstances, the endeavour to engraft upon Section 99 of the Transfer of Property Act. the preexisting rule, on the subject as discoverable from judicial decisions is opposed to well-recognised principles of construction of Statutes, What has been here attempted by the plaintiffs was emphatically condemned by Lord Herschell in Bank of England v. Vagliano (1891) A.C. 107 at p. 145 : 60 L.J.Q.B. 145 : 64 L.T. 353 : 89 W.B. 657 : 55 J.P. 676: the purpose of the Statute surely was that on a point specifically dealt with by it, the law should be ascertained by interpreting the language used, instead of, as before, by roaming over a vast number of authorities in order to discover what the law was and extracting it by a minute critical examination of the prior decisions. The utility of the legislative enactment would be almost entirely destroyed and the very object of embodying the rule in a code frustrated, if the Court would be called upon to examine the antecedent decisions and to engraft the rule deducible therefrom on the Statute. The mischief is well illustrated by what has happened in the case before us. We were invited to consider the exact effect of the cases already mentioned as also other decisions such as Bhaggabutty Dossee v. Shamachurn Bose 1 C. 337; Martand Balkrishna Bhat v. Dhondo Damodar Kulkarni 2 B. 624 at p. 628. Erusappa Mudoliar v. Cotmmercial & Land Mortgage Bank Limited 23 M. 377; 10 M.L.J. 91 and Mulhu v. Karuppan 17 M.L.J. 168 : 80 M. 313 : 2 M.L.T. 181 and to supplement the statutory rule by the previous law on the subject. This can only lead to confusion, as is shown by the divergence of opinion disclosed in the oases of Muthu v. Karuapan 17 M.L.J. 168 : 80 M. 313 : 2 M.L.T. 181 and Dharanikota Venkayya v. Budharazu Surayya Garu 30 M. 362 : 17 M.L.J. 325 which were decided within a few weeks of each other and one learned Judge was a party to both decisions. After the best consideration I have been able to give to the matter, I have come to the conclusion that the severity of the rule embodied in Section 99 of the Transfer of Property Act should not be softened by invoking the aid of the pre existing law on the subject. I am consequently unable to follow the decisions is Panchm Lal Chowdhury v Kishun Pershad Misser 6 Ind. Cas. 47 : 12 C.L.J. 574 : 14 C.W.N. 579 and Narayan Chandra Poddar v. 'ReshabLal Dhari Bhai 46 Ind.Cas. 493 : 28 C.L.J. 151.

30. Apart from this, even if the contrary view were taken and the equitable principles enunciated in the earlier decisions could be applied, they would be of no assistance to the plaintiffs. The suit is framed as an ordinary redemption suit and not as a suit to enforce a trust. In a suit so framed, a redemption decree can be made only in conformity with Section 91 of the Transfer of Property Act. Such a decree, it was not disputed, could not meet the justice of the case, because the defendant could not be deprived of the property only on payment of the mortgage money.

31. It may be observed finally that Section 99 of the Transfer of Property Act has now been replaced by a less comprehensive rule (Order XXXIV, Rule 14, Civil Procedure Code). The disability of the mortgagee is restricted to cases where he purchases the equity of redemption at a sale held in execution of a decree for the payment of money in satisfaction of a claim arising under the mortgage. The mortgagee, if he has a claim against the mortgagor independent of the mortgage, thus has the same right that other creditors have to realise it by the attachment and Bale of the equity of redemption. In such a case, however, the decree-holder must obtain leave to bid under Order XXI, Rule 72, and when he has obtained leave, he is in the position of an independent purchaser [Mahabir Pershad Singh v. Marnaghten 16 C. 682 : 16 I.A. 107 (P.C.) : 5 Sar. P.C.J. 45 and Ganga Pershad v. Jawahir Singh 19 C. 4 This differentiates the cases of an execution sale from a private sale of the equity of redemption, There, as observed by Kindersley, V.C., in Gossip v. Wright (1863) 32 L.J. Ch. 648 : 9 Jur. (N.S.) 692 : 8 L.T. 627 : 11 W.R 682 the Court allows the parties, by an arrangement subsequent to the mortgage, to enter into a transaction by which the mortgagor sells or releases or conveys or gives up (call it what you will) his equity of redemption and makes the estate out and out the estate of the mortgagee. This has now been approved by the House of Lords in Reeve v. Lisle (1902) A.C 461 : 71 L.J. Ch. 768 : 67 L.T. 308; 51 W.R. 776 : 18 T.L.R. 767 where they affirmed the decision of the Court of Appeal in Lisle v. Reeve (1902) 1 Ch. 53 : 71 L.J. Ch. 42 : 85 L.T. 464 : 50 W.R. 231 : 18 T.L.R. 61.

32. My answer to the question referred to the Full Bench is in the negative; where a mortgagee has in contravention of Section 99 of the Transfer of Property Act attached the mortgaged property and brought it to sale and purchased it himself, the mortgagor or his transferee cannot successfully maintain a suit for redemption of the property without first getting the sale set aside.

33. In this view, the appeal must be allowed and the suit dismissed with costs in all the Courts.

Ceattirjea, J.

34. The question referred to the Full Bench is thus stated in the order of reference: ' Where a mortgagee has in contravention of Section 99 of the Transfer of Property Act attached the mortgaged property, and brought it to sale and purchased it himself, can the mortgagor or his transferee without first getting the sale set aside successfully maintain a suit for redemption of the property?'

35. It appears that the mortgagors on the 6th April 1891 mortgaged the property in dispute by way of conditional sale, under which the mortgagee was to hold possession and enjoy the usufruct of the property mortgaged by way of interest. On the same date the mortgagors executed a kabuliyat in favour of the mortgagee under which they were to hold the land mortgaged as tenants under the latter on payment of half the produce. It was also provided that on nonpayment of half the produce (or the price thereof, Rs. 50) they would be liable to be ejected. The mortgagors defaulted to pay the share of the crops, and the mortgagee thereupon brought a suit for rent and also for ejectment. He obtained a decree for rent and the decree contained a direction that the defendants should be ejected if the decretal amount was not paid within 15 days. The payment was not made and the decree was executed, and the defendants were ejected on the 4th July 1892. The mortgagee subsequently took out execution of the decree for rent and purchased the equity of redemption on the 5th December 1892, The sale was confirmed in January 1893 and possession was taken in 1895. The heirs of the mortgagors sold the land to the father of the defendants Nos 5 and 6, from whom the plaintiffs) purchased it on the 13th May 1913 and on the 20th November 1913 brought the present suit for redemption.

36. A question arose as to whether the defendant obtained the leave of the Court to bid at the sale, and the learned District Judge (to whom the question was referred for a finding) came to the conclusion that although there was no evidence on the point (the execution records having been destroyed) there was a presumption that leave to bid was obtained. I am of opinion, however, that no such presumption can be drawn having regard to the provisions of Section 99 of the Transfer of Property Act.

37. The first question for consideration is whether the decree obtained by the defendant (the mortgagee) was for the payment of money in satisfaction of a claim arising under the mortgage. It is contended on behalf of the appellant that although there was a kabuliyat executed by the mortgagors in favour of the mortgagee agreeing to hold the land as tenants under him, it was part of the same (mortgage) transaction, and the decree, though in form a decree for rent, in substance was a decree for arrears of interest due under the mortgage. I am of opinion, however, that the decree was for rent as it purported to be. It is true the arrangement was that the share of the crops which the mortgagee would get from the mortgagors would be appropriated as interest on the mortgage, but the legal relation between the parties after the execution of the kabuliyat was that of landlord and tenant. Had the mortgagee let out the land to a third party, it could not be contended that the share of crops payable under the kabuliyat was not rent, even though the same might be appropriated towards interest. The mere fact that the lands were let out to the mortgagor would not alter the relation between the parties. Moreover the fact that the decree contained a direction for ejectment (presumably under Section 66 of the Bengal Tenancy Act) if the defendant failed to pay the decretal amount within the time specified, shows clearly that it was a decree for rent, because whatever the arrangement might be, the mortgagee could not (except on the footing of landlord and tenant) obtain a decree for ejectment against the mortgagor. I think, therefore, that the defendant purchased the equity of redemption at the sale as landlord, and not as mortgagee.

38. It is admitted that if the sale at which the mortgagee purchased was in execution of decree in respect of a claim not arising under the mortgage, the mortgagee acquired the equity of redemption just as a third party would, and the plaintiffs cannot redeem unless they got the sale set aside. As the decree for rent in my opinion was not in satisfaction of a claim arising under the mortgage, the defendant acquired an irredeemable title to the property by his purchase at the sale in execution of the decree, the sale never having been set aside. In my opinion, therefore, the suit fails on this ground, and it is unnecessary to consider the other questions raised in the. case.

39. But even if it be held that the decree was in respect of a claim arising under the mortgage, I think the suit will fail, as the sale was never set aside. The contention of the plaintiffs is that the sale need not be set aside, the sale stands but that the mortgagee does not acquire an irredeemable title, he holds the mortgaged property as trustee for the mortgagors, and the latter can redeem on payment of the mortgage money plus the amount spent by the mortgagee in purchasing the property, and any other money which. might have been spent by him for the protection of the property; in other words, that the mortgagee by his purchase only adds to his security, and that the rule of equity which governed the relation between the parties before the sale subsists notwithstanding the sale. It is pointed out that the principle of equity, viz., that a mortgagee cannot by obtaining a money decree for the mortgage debt and taking the equity of redemption in execution, relieve himself of his obligation as mortgagee or deprive the mortgagor of' his right to redeem on accounts taken and with the other safeguards usual in a suit on mortgage, is referred to by the Judicial Committee in the case of Khiarajmal v. Daim 32 C. 296 at p. 312 : 2 A.L.J.71 : 1 C.L.J.584 : 7 Bom. L.R.I. : 9 C.W.N. 201 : 32 I.A. 23 : 8 Sar. P.C.J. 734 (P.C.). But this equity is recognized in Section 99 of the Transfer of Property Act. It is now settled, however, by the decision of the Pull Bench in the case of Ashutosh Sikdar v. Behari Lal Kirtania 35 C. 61 : 11 C.W.N. 1011 : 6 C.L.J. 320 that a sale in contravention of the provisions of Section 99 of the Transfer of Property Act is not void but is merely voidable, and admittedly no steps were taken to have the sale set aside, It cannot, therefore, be contended that the equity of redemption subsists in the mortgagor even though the sale is not set aside.

40. As for the argument that the mortgagee by his purchase holds the property as trustee, the trust (assuming that there is any) must be enforced in a suit properly framed for the purpose, and within the period of limitation prescribed. The suit is not so framed, Section 10 of the Limitation Act would not be applicable, and the present suit brought 21 years after the sale is barred by limitation. I would accordingly answer the question referred to in the negative.

Newbould, J.

41. I agree.


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