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H.R. Chamaria and Company Vs. Sonaton Pal and anr. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in107Ind.Cas.72
AppellantH.R. Chamaria and Company
RespondentSonaton Pal and anr.
Excerpt:
mortgage - mortgagee obtaining possession with consent of mortgagor--liability to ejectment--person claiming under mortgagee, whether, trespasser--purchaser of equity of redemption, rights of. - .....in possession he is held to be accountable as such for example, in this case if in the mortgage suit galstaun had taken up the position that he did not enter into possession as a mortgagee but simply as guardian of owen sukeas, i think his plea could not have been given effect to. he was not the legal guardian of owen sukeas and, there fore, as there is no other legal ground, which he could maintain for being in possession of the property he would be liable to account as a mortgagee in possession. my view, therefore, is that chamaria may shelter himself under the plea that galstaun took possession of the property as a mortgagee after the death of j.b. sukeas and that he was brought on the land by galstaun.10. there was no relationship of landlord and tenant between him and the.....
Judgment:

B.B. Ghose, J.

1. This is an appeal on behalf of the principal 'defendant H.R. Chamaria and' Company, who may shortly be described as Chamaria, against a judgment and decree of the Subordinate Judge, Second Court, Dacca, dated the 21st December, 1925. The suit as framed was on the ground that Chamaria was a tenant at will under one J.B. Sukeas who was the owner of the property in question. The plaintiff had purchased the right, title and interest of the legal representative of J.B. Sukeas in execution of a money decree on the 2nd May, 19l9. He was put into symbolical possession by virtue of his purchase on the 18th July, 1919. The purchase was made in the benami of his son named Bepin Behary Pal who was joined as defendant No. 2 in the suit. On the 4th August, 1919, the plaintiff served notice on Chamaria determining the tenancy under which chamaria was alleged to have held the property in question as from the end of August, 1919. The present suit was brought on the 17th September, 1919, and the claim was for rent at the rate of Rs. 600 per month from 2nd May to 31st August, 1919, and for damages at a certain rate, which it is unnecessary to mention, from the 1st September to 17th September, 1919. The plaint was subsequently amended by an application made on the 23rd January, 1925, asking for mesne profits or damages up to the date of delivery of possession. By this amendment the original valuation of the suit which was Rs. 10,000 odd was increased to Rs. 80,000 odd. The defendant objected to the application for amendment which was overruled by the lower Court. The defendant's main defence was that he was never a tenant of the land under the plaintiff or his predecessor in interest, and the plaintiff has no right to maintain the suit against him. His case was that one J.C. Galstaun held an equitable mortgage or as it may be properly described as a mortgage by deposit of title-deeds, which was effected in the town of Calcutta under Section 59 of the Transfer of Property Act by J.B. Sukeas; and that Galstaun Wis in possession of the property in suit along with other properties as a mortgagee and while in such possession Galstaun let out the property at first to a brother of J.B. Sukeas and then to the defendant Chamaria at a rent of Rs. 600 per month. But sometime in April, 1918, an agreement was entered into between Galstaun and Chamaria that Chamaria would purchase the property in dispute for Rs. 85,000 and that he would lave to pay no rent but would have to pay interest on the purchase-money agreed to between them. The sale could not be effected because Galstaun had no right to effect a sale of the property at the time. But the stipulation was that Galstaun would either take the permission of the Court to sell the property on behalf of the infant heir of J.B. Sukeas or he Would himself effect the sale after purchasing the property in execution of the decree on his mortgage which he intended to have On these pleadings several issues were framed in the lower Court. The main questions are covered by issues Nos. 3, 7 and 11. Issue Nov 3 was 'Is there any relation Ship of landlord and tenant between the plaintiff and the defendant?' Issue No. 7 was 'Was the plaintiff aware of the equitable mortgage in favour of J.C. Galstaun at the time when he purchased the property in suit? If so, can he get Mas possession without redeeming plaintiff's mortgage?' The 11th issue was. 'Whether Mr. J.C. Galstaun is mortgagee in suit. If so, whether the plaintiff is entitled to recover any amount by way of damages?' It should be stated here that the plaintiff did not at the commencement admit the mortgage of Galstaun. When the suit was brought by Galstaun on his mortgage the present plaintiff was joined as a defendant as he ought to have been joined as a purchaser of a portion of the equity of redemption. Galstaun's suit on his mortgage was brought on the 14th of May, 1919, four months prior to the present suit by the plaintiff. The plaintiff disputed the mortgage and in that suit he took up a plea that Galstaun having got into possession of the property and having realised the profits he was bound to account for the receipts and those must be debited against the debt if any was found due to Galstaun. That suit was decided in the trial Court on the 23rd September, 1921. There was an appeal against that decision and this Court modified the decree of the Subordinate Judge by its judgment dated the 23 rd January, 1924. I shall speak later On about this judgment. The judgment and decree of the High Court were affirmed by the Judicial Committee in January, 1927.

2. In the present case before the Subordinate Judge the trial proceeded upon the ground that Galstaun had a mortgage on the property in question. The sole question upon which the parties seem to have been in controversy was whether Galstaun was ever in possession of the property in question as a mortgagee or in other words whether Galstaun's position was that of a mortgagee in possession. The Subordinate Judge found as it was found in the previous litigation that the purchase of the plaintiff was with notice of Galstaun's mortgage. The Subordinate Judge found in the present case in deciding issue No. 7 as stated above that Galstaun took possession of the property as guardian of the infant son of J.B. Sukeas and did not take possession as a mortgagee. That being so, he held with regard to issue No. 7 that the brother of J.B. Sukeas Was a tenant of Owen Sukeas, the infant son of the original mortgagor, when Galstaun let out the property to him and that Chamaria was similarly a tenant under Owen Sukeas when Chamaria was let into possession by Galstaun in his capacity of guardian of Owen 'Sukeas, In that view it was held that the plaintiff as a purchaser of the right, title and interest of Owen Sukeas stepped, into his shoes and thus Chamaria became' a tenant under the plaintiff and that tenancy was terminated at the end of August, 1919, by notice to quit which was served by the plaintiff upon Chamaria and upon that basis the plaintiff was entitled to a decree for rent for the period of the tenancy and also for damages by way of mesne profits till the date of delivery of possession. The property, however, was sold in execution of the mortgage-decree obtained by Galstaun on the 23rd October, 1925, and purchased by himself. The value fetched for the property at the execution sale was far below the amount of the mortgage-decree. By reason of that sale no decree could have' been made by the Subordinate Judge for ejectment of the defendant as the plaintiff's title to the property ceased to exist by virtue of that sale. But he made a decree for damages up to that date and the total amount of the decree made by the Subordinate Judge, who modified the' claim for damages made by the plaintiff to a considerable extent, was Rs. 46,660. The defendant Chamaria has appealed to this Court.

3. The first ground taken on behalf of the appellant is that the amendment asked for by the plaintiff should not have been allowed by the lower Court. We do not think that there is any substance in this objection. If the plaintiff had not specified in his plaint that he asked for mesne profits till the date of the suit, that is to say, till the 17th of September, 1919, the Court might have been in a position to make a decree for mesne profits up to the date of delivery of possession. But if the suit is otherwise properly framed there was no harm in allowing the plaintiff to amend his plaint by striking out from his prayer for recovery of mesne profits the words 'up to the date of the suit' and by substituting in their place the words 'up to the date of delivery of possession.'

4. The appellant then takes up the position that he was brought on the. land by the mortgagee Galstaun who was in possession at the time and that so long as the possession of Galstaun could not be got rid of the plaintiff was not entitled to sue him as there was no privity between him and the plaintiff, As I have already stated Chamaria never acknowledged that he was on the land as tenant of Sukeas. Galstaun's possession was not admitted by the plaintiff in this suit either in the plaint or in the evidence on his side. The Subordinate Judge, however, has found that Galstaun was in possession. But he has held that as Galstaun was in possession as a guardian of Owen Sukeas the relationship of landlord and tenant existed between Owen Sukeas and the defendant. The question, therefore, is whether that position is at all maintainable. The learned Vakil on behalf of the plaintiff respondent does not seek to support the decree of the Subordinate Judge on that ground. The position that he takes up is this, that Galstaun got into possession without any right. His position was that of a mere trespasser and Chamaria who was brought on the land by Galstaun was in no better position. They were joint trespassers upon the facts as established by the evidence. That being so, the plaintiff was entitled to claim damages from any one of them, both of whom were jointly and severally liable. So long as it is not established that the plaintiff has recovered any damage from the other joint trespasser the plaintiff is entitled to recover damages from this tortfeasor that is, Chamaria, and upon that ground the decree of the Subordinate Judge is unassailable.

5. The appellant, on the other hand, contends that Galstaun was in possession as a mortgagee. He brought a suit on his mortgage. In that suit he admitted in his plaint, as would appear from a recital in the judgment of the Subordinate Judge in the mortgage suit (at page 42 of the second part of the paper book), that he had obtained possession of the mortgaged properties and some moveables belonging to J.B. Sukeas, after the death of J.B. Sukeas. He had sold some of the moveables and realised the rents and profits of the mortgaged properties and credited the price and rent and profits towards the satisfaction of his debt. He took upon himself the liability to account as a mortgagee in possession. The present plaintiff was defendant. No. 3 in the previous mortgage suit who practically alone contested the suit. He also referred to the fact that Galbtaun had taken possession of the property left by J.B. Sukeas and that he was bound to account for all the moneys that he had received, (which the present plaintiff described as misappropriation) and also to make good the amount of the loss which he had caused by his neglect to get in any part of the property of the deceased. In substance the present plaintiff defendant in the mortgage suit pleaded that not only Galstaun was liable to account for what he had actually received or might have received but he was also liable to account for his wilful default. Upon that an issue was framed as to how much was realised and that was the 6th issue before the Subordinate Judge in the mortgage suit. Galstaun produced his account books in the mortgage suit. What the receipts were is evident from the fact which was stated in the judgment of the Subordinate Judge (at page 58 of the same part of the paper-book) where the Judge stated 'The plaintiff, it is true, credited in his accounts the moneys received from the estate of J.B. Sukeas after his death and these should be held as payments made in reduction of the plaintiff's dues.' It should be stated that the decree made by the Subordinate Judge was merely a money decree as against the representative of the original debtor J.B. Sukeas and the sums which were found in the accounts to have been realised from the property by Galstaun were debited against his dues.

6. Against that decree Galstaun appealed to the High Court and in the High Court the decree of the Subordinate Judge was modified to this extent that a decree was made in favour of Galstaun as a mortgagee and he was held entitled to recover his dues from the mortgaged property. With regard to the accounts it appears that neither party pressed for an account being taken and a decree which in ordinary case is made to the effect that accounts should be taken of what was due to the mortgagee by taking accounts of what was due under the bond and what was received by the mortgagee from the mortgaged properties was not made. Instead of that a decree was made for the sum that was found by the lower Court with interest and costs. The reason evidently seems to have been that both the parties knew that the receipts were less than the interest and outgoings and that on taking accounts the dues of the mortgagee would be found to have been much larger than what, was found by the Subordinate Judge and the mortgaged property not being of sufficient value it would be mere waste of time and money to take further accounts which would have the effect of increasing the debt which was found to be due to the mortgagee. There was an appeal from the decision of the High Court, to the Privy Council by the present plaintiff. The judgment and decree of the High Court were affirmed by the Privy Council on the 21st January, 1927 See 101 Ind. Cas. 50--[Ed.]. No objection was made in that appeal to the accounts nor to the nature of the decree that was made by the High Court. The only ground upon which the present plaintiff chose to fight the case before the Privy Council was whether there was a mortgage or not The position of the parties, therefore, stands thus, that if there was a mortgage the equity of redemption purchased by the plaintiff was worth nothing as the mortgage-debt of Galstaun would far exceed the value of the property in whichever way the accounts might have been taken.

7. It is contended on behalf of the appellant that it is quite clear from the facts that Galstaun was in possession as a mortgagee. That being so, Chamaria had been brought on the land by the mortgagee in possession and the plaintff as a purchaser of the equity of redemption could not treat Chamaria as his tenant so long as the property was not redeemed by him. It is conceded on the part of the respondent that if Galstaun was a mortgagee in possession and if Chamaria was brought on the property by Galstaun as such mortgagee the plaintiff would have no case. But his contention is that Galstaun never took possession as a mortgagee and that contention is sought to be supported by the fact that the plaint was not drawn up in the mortgage suit in the form which is prescribed in Appendix 'A,' form No. 45 of the Code of Civil Procedure for a plaint by a mortgagee who had entered into possession; and the decree is not also in the form given in Appendix 'D' of the Code of Civil Procedure. I have already stated why the decree was not in that form. The plaint, although it is not precisely in the form prescribed in Appendix 'A' sufficiently indicates the position of Galstaun. When he stated in his plaint that he had a mortgage and that after the death of the original mortgagor he got into possession of the property and realised rents and profits which he was willing to debit against the' mortgage amount, this is a sufficient statement that the mortgagee was liable to account as mortgagee in possession and I have already indicated the defence in which it was alleged that the mortgagee was not only bound to account for what he received or what he might have received but also to account for the loss to the estate by his default Under the circumstances it seems to me difficult to hold that the position of Galstaun was anything but that of a mortgagee in possession. The Subordinate Judge has held that Galstaun went into possession as a guardian: It is Undoubtedly true, as it appears from the record, that after the death of J.B. Sukeas, who had himself written a pencil note before his death to the effect that Galstaun should look after his minor son, Galstaun thought that he would act as a sort of a guardian of the minor son of J.B. Sukeas as Galstaun seems to have been very much interested in the welfare of the family. With that view he took possession of not only the mortgaged property but also some moveable properties belonging to Sukeas and tried to carry on his business. It is apparent that when he found that the debts of the estate of Sukeas were so great that it would be hopeless to try to save the estate he ceased from acting as a sort of guardian of the infant. Subsequently, a lady who was the grandmother of Owen Sukeas took out Letters of Administration of the estate of J.B. Sukeas. Galstaun was certainly not entitled to enter into possession under his mortgage. But it is quite clear that he go into possession either with the express or tacit consent of the persons who were really interested in the estate of the mortgagor, J.B. Sukeas, This question does not seem to have been properly investigated and that must have been due to the fact that the plaintiff altogether ignored the existence of Galstaun with reference to this property in the present litigation. It appears quite clear from the evidence on the record that Galstaun entered into possession peacefully and without objection on the part of the persons interested in the mortgaged property. That being so, he cannot be treated as a wrong-doer as he is sought to be treated by the respondent here unless the plaintiff can maintain the position that Galstaun was a wrong-doer and Chamaria was equally a wrong-doer the present suit cannot, in my opinion, be maintained as against Chamaria.

8. It is contended on behalf of the respondent that there is nothing to show that Chamaria paid any money to Galstaun for the period of his occupation or that any sum which he might have paid was taken into account in the mortgage suit and, therefore, the plaintiff is entitled to recover the money from Chamaria for the period of his occupation. We are not concerned in this case, in my judgment, with the question whether proper accounting was made in the mortgage suit of Galstaun. That question does not arise in the present case. The short question which seems to arise here is that if Galstaun was in possession as a mortgagee and was accountable as such in his mortgage bruit any person who has been brought on the mortgaged property by Galstaun. has no privity between himself and the mortgagor so as to be liable to the mortgagor for his occupation of the mortgaged property. It may be conceded that the plaintiff after his purchase of the equity of redemption could by giving proper notice to Galstaun claim to recover possession of the property. In other words he might withdraw by notice to Galstaun the consent that was either actually or tacitly given by his predecessor in interest to the taking of possession by Galstaun but it is unnecessary to discuss what the position would have been in that case as there is no allegation anywhere on the record that any such notice was given. The plaintiff was, therefore, bound by the consent given by or on behalf of the owner of the equity of redemption before his purchase to the taking of possession by Galstaun and he cannot on that ground maintain this suit against the defendant for damages or rent.

9. There is another matter with regard to which I propose to make a few observations. The discussion by the learned Subordinate Judge in his judgment as regards the question whether Galstaun was a mortgagee in possession or not is based upon a discussion in the books as to whether the mortgagee should in certain cases be treated as having taken upon himself the onerous position of a mortgagee in possession. When, a mortgages enters into possession he is bound to account as a mortgagee in possession. But owing to the exceptional severity with which a mortgagee in possession is treated in taking the accounts, the Courts are slow to decide that such possession has been taken, and will only do so when it is proved that the mortgagee had no reasonable ground for believing himself entitled to take the rents and profits in any other capacity. The mortgagee may relieve himself of the liability to account as a mortgagee in possession by showing that he entered into possession in some other character. If he fails to establish that fact in order to exonerate himself from the liability to account as a mortgagee in possession he is held to be accountable as such for example, in this case if in the mortgage suit Galstaun had taken up the position that he did not enter into possession as a mortgagee but simply as guardian of Owen Sukeas, I think his plea could not have been given effect to. He was not the legal guardian of Owen Sukeas and, there fore, as there is no other legal ground, which he could maintain for being in possession of the property he would be liable to account as a mortgagee in possession. My view, therefore, is that Chamaria may shelter himself under the plea that Galstaun took possession of the property as a mortgagee after the death of J.B. Sukeas and that he was brought on the land by Galstaun.

10. There was no relationship of landlord and tenant between him and the plaintiff and the plaintiff, therefore, is not entitled to claim anything from him. The plaintiff purchased the equity of redemption which unquestionably was worth nothing and he is not, in my judgment, entitled to recover anything from Chamaria.

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

Page, J.

12. I agree. This is a suit brought to recover khas possession of certain immoveable property together with arrears of rent and mesne profits. The property in suit was the subject-matter of an equitable mortgage of the 22nd May, 1914, created by one J.B. Sukeas in favour of J.G. Galstaun.

13. It was common ground at the hearing of the appeal that even if the sums decreed for rent and mesne profits in the suit had been added to the mortgage security it would have been insufficient to meet the sum due to Galstaun under the mortgage of the 22nd May, 1914, The ground upon which the decree was based is set out in the judgment of the learned Subordinate Judge as follows: 'Defendant No. 1 (that is appellant) got into possession admittedly as tenant at a monthly rent of Rs. 600. They were let into possession by Mr. Galstaun in his capacity as a guardian of Owen Sukeas in 1917, and they paid rent as they had agreed to pay for a period of one year. In March or April, 1918, they entered into an infructuous verbal contract with Mr. Galstaun to purchase the property for Rs. 85,000, but they did not pay the money as Mr. Galstaun could not execute any valid deed of transfer and it was settled and agreed that reasonable interest upon the sum of Rs. 85,000 should be paid by H.R. Chamaria & Co. As there was no sale the interest payable as mentioned above was really the rent payable for the property and thus the tenancy created at first was practically continued. The relationship of landlord and tenant, therefore, in my opinion, existed as between Owen Sukeas and defendant No. 1 till the interest of Owen Sukeas was purchased by the plaintiff on the 2nd May, 1919, in the benami of his son defendant No. 2 in auction-sale. On purchase of the equity of redemption the plaintiff stepped into the shoes of Owen Sukeas and thus H.R. Chamaria & Co. became tenants under him. The tenancy terminated with the end of August 1919 as it was put an end by a notice to quit.' It is quite clear that Galstaun could not legally enter into an agreement for a tenancy with H.R. Chamaria & Co. in the capacity either of guardian or of agent of the minor son of Sukeas. It follows, therefore, that the suit as framed must fail, for no privity of estate at any time existed between the plaintiff and Chamaria. At the hearing of the appeal, however, the learned Vakil for the respondent contended that, although he could not support the decree upon the ground upon which it was based by the learned Subordinate Judge, it ought to be affirmed upon an entirely different basis. He urged that Chamaria must have been in possession of the property at all material times either without any title or claiming title through the mortgagor or the mortgagee.

14. As the learned Vakil for the appellant admitted that he could not claim title through the mortgagor Chamaria either had no title to be in possession at all or he must rest his claim to be in possession upon the title of Galstaun, the mortgagee. that assumption the learned Vakil for respondent further contended that Galstaun took possession without any pretence of legal right, and was liable to be ejected as a trespasser; and that Chamaria, who admittedly was put into possession by Galstaun acting in some capacity or other, was in a like predicament. Being trespassers both Galstaun and Chamaria were jointly and severally liable to pay damages for having been in wrongful possession of the property. That is a different cause of action involving the consideration of entirely different issues from the cause of action that was set out in the plaint and canvassed at the trial, and learned Counsel who appeared for the appellant strenuously contended that the Court ought not to permit the respondent to set up a new cause of action of this nature for the first time in appeal. It is necessary to decide that question, because, in my opinion, upon the evidence the learned Subordinate Judge ought to have held that at all material times Galstaun was in possession of the property in suit as mortgagee and not as a trespasser. The oral evidence upon this matter, in my opinion, supported the view that Galstaun took possession of this property as mortgagee with the assent of the mortgagor. That being so, his possession was lawful possession unless and until the assent of the mortgagor to Galstaun remaining in possession of the mortgaged property was withdrawn. At the hearing of the suit no allegation was made, no issue was raised, and no evidence was led by the plaintiff to prove that any time after he purchased the property the plaintiff had refused or withdrawn his assent to Galstaun remaining in possession of the property as mortgagee under the mortgage of 12thMay, 1914. It may be that if such an issue had been raised at the trial the defendant might have been in a position to prove that the plaintiff in fact consented to Galstaun remaining in possession as mortgagee. But once it is found that Galstaun took possession of the property as mortgagee with the assent of the mortgagor, in my opinion, the mortgagee's possession continued to be lawful possession until the assent of the mortgagor was withdrawn; and if Galstaun's possession was lawful possession it follows that Ghamaria's possession was also lawful.

15. The result is, therefore, that, even asking that the respondent ought to be (sick) ed at this stage of the proceedings to put forward the case that Chamaria was trespasser, such a contention must fail having regard to the evidence that has been adduced. It is unnecessary to consider the legal position of the plaintiff vis-a-vis the mortgagee Galstaun, and I refrain from expressing any opinion with respect to the legal obligations that existed or may exist between them.

16. For these reasons I agree that the appeal should be allowed and the suit dismissed.


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