1. This appeal arises out of an action to recover possession of a certain Hat called Alamgunj Hat.
2. On the 19th November 1898, corresponding to the 4th Aghran 1906, one Syed Ashgar Reza executed a mortgage bond in favour of Ram Chandra Babu, whereby amongst other properties he mortgaged the hat in suit. On the 30th March. 1904, the mortgagee obtained a mortgage decree directing the sale of the mortgaged properties. On the 7th June 1905, the hut was sold and purchased by the plaintiff for Rs. 16,000. She duly obtained possession of this hat on the 15th September 1905. Subsequently on the 9th. January 1906, the dwelling house of Syed Ashgar Reza, together with the adjoining site on which the hat is held, was sold under a certificate issued under the Public Demands Recovery Act and was purchased by the defendants. In March 1906, the defendants obtained possession of the properties purchased by them and thereafter dispossessed the plaintiff from this hat. In the month following, the plaintiff brought the present action for possession of this hut The defendants alleged that under their purchase they were entitled not only to the site but also to the hat which was held upon it. The learned Subordinate Judge has, upon these facts which are practically admitted, given the plaintiff a decree.
3.The first question which arises in this appeal is whether a hat can be the subject of a valid mortgage.
4. What the mortgagor really transfers, are the rents and profits issuing out of the land or, in words of the General Clauses Act used in the definition of immoveable property,' 'benefits arising out of land.' There is no express authority upon this point; but the principle, upon which depends the solution of this question, is well settled. There can be no doubt that everything which is capable of being transferred may form the subject of a valid mortgage. Story in his equity jurisprudence, in Section 1021, says- As to the kinds of property which may be mortgaged, it may be stated that, in equity, whatever property personal or real, is capable of an absolute sale, may be the subject of a mortgage.... Therefore, rights in remainder and reversion, possibilities coupled with an interest, rent, franchises and choses in action are capable of being mortgaged.' See also James on Mortgages, 6th Edition, Section 140.
5. It is, therefore, clear that rents and profits may be transferred by way of mortgage, apart from the land itself.
6. If any further authority is needed in support of this proposition, it is to be found in the observations of the learned Judges of this Court in Surendro Prosad Bhuttacharji v. Kedar Nath Bhuttacharji 19 C. 8. There the question was whether the sayer compensation paid by Government for the abolition of a hat which existed prior to the decennial settlement was capable of being mortgaged. It was hold that such compensation did not partake of the nature of malikana, or could not in any sense be regarded as rent or profits of the land and that, therefore, it could not be mortgaged. The learned Judges distinguished the sayer compensation from rent or profits of land. They thus observed--These duties, that is the duties, of which the sayer compensation was an instance, it will be observed, were in no sense rent or profits which the owner of a hat or bazar was entitled to receive for the use of land or for houses, shops or other buildings erected thereupon', clearly indicating thereby that the rent or profits receivable by the owner of a hat or bazar for the use of land Or for houses or shops erected on it can form the subject of a valid mortgage.
7. In Bungsho Dhur Biswas v. Mudhoo Mohuidar 21 W.R., 383, the question was whether a lease could be given of the profits of a hat. The learned Judges said: The collections which the plaintiff let in farm to the defendants are not, it seems to us, in the nature of internal duties. They are merely in the nature of rent which the owner of the land receives from persons who go to sell goods on his land in the shape of a part of the proceeds of sale, instead of a fixed monthly or yearly payment.' If the rents or profits of a hat can form the subject of a valid lease, there is no reason why a mortgage of such rents or profits cannot be given.
8. In Surendra Narain Singh v. Bhai Lal Thakur 22 C. 752, the validity of a lease of a hat was assumed, and the question was whether registration of such a lease was compulsory. It was held that a hat was a benefit arising out of land and, therefore, within the definition of immoveable property, as given in Section 2, Clause 5, of the General Clauses Act (I of 1868).
9. Similarly in the case of Sikandar v. Bahadar 27 A. 162 the validity of a lease of the right to collect market dues was assumed and it was held that such market dues were in the nature of benefits arising out of land and, therefore, registration of the lease was necessary.
10. These authorities are, in my opinion, sufficient to establish the proposition that the rents and profits derivable from a hat can be validly mortgaged.
11. But it was contended further on behalf of the appellant that the nature of the hat is so peculiar that the mortgage of it cannot be valid according to law.
12. In the mortgage bond the description of the hat is as follows: And the said hat called Alamgunj used formerly to be held in Alamgunj and it has now been removed by me from there and established in the compound wherein my Masjid etc. stand and it is my intention to remove this hat from that compound and establish it elsewhere; so I do hereby also mortgage and pledge 16 annas of the said hat Alamgunj and the mortgage under this bond will hold good in respect of the hat called Alamgunj under any circumstance and every place, whether it be in that compound where it is now held or any other place where it may be established, and the said hat will be sold by auction without any objection on the ground that the site of the hat has been changed. Although the boundaries of the said hat which have been fixed from formerly within Alamgunj are herein given, still as set forth above the boundaries of the said half shall be considered to be of the place whore it may be held, and in case of its being sold by auction, it shall be sold with those boundaries.'
13. It is clear from these words that the mortgage was of hat Alamgunj held on the site where it was held at the time of the mortgage, with a further covenant that the mortgagee should have the same right over the hat on whatever site it might thereafter be held, that is, even if it were removed to some other site situated on the property of the mortgagor. Whether this further covenant is valid or not, as between the mortgagor and the mortgagee, or between the purchaser of the rights and interests of the mortgagor at an execution sale and the mortgagee, it is unnecessary to consider; because the hat is still being held on the site where it used to be held at the time of the mortgage. There can be no doubt that the mortgage of the hat now held on the same site where it used to be held at the time of the mortgage and at the time of the sale is separable from the further covenant to which I have just referred and is valid in law.
14. It follows, therefore, that the purchase of the defendant is subject to the purchase by the plaintiff at the sale in execution of the mortgage in favour of Ram Chandra Babu and the plaintiff is entitled to have possession of the hat, for those reasons the judgment of the Court below is affirmed and this appeal is dismissed with costs.
15. I agree.