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The Midnapur Zemindary Company Limited Vs. Abinash Chundra Mitra and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in50Ind.Cas.790
AppellantThe Midnapur Zemindary Company Limited; Abinash Chundra Mitra and ors.
RespondentAbinash Chundra Mitra and ors.;srimati Promodini Dasi and ors.
Cases ReferredImam Ali v. Baij Nath Ram Sahu
Excerpt:
bengal tenancy act (viii b.c. of 1885), section 95 - common manager, appointment of--co-owner, whether can mortgage his share--mortgage suit--plaintiff-claiming more than his rights, effect of--transfer of property act (iv of 1882), section 82--mortgage of several properties--mortgagor, liability of--transfer of mortgaged properties--transferees, liability of. - .....for the appellants contended were not before the court, are persons who received portions of the sale-proceeds of schedules nos. 4 and 5 and the person for whom defendant no. 5 in his written statement states that he is a benqmdar. now no relief is claimed in respect of schedules nos. 4 and 5, consequently the persons who received portions of the sale-proceeds of these properties are not affected and were not necessary parties to the suit, and as for the allegation of defendant no. 5 this is denied, and has not been established and we think the defendant no. 5, as being the person who took out a sale certificate, has been rightly sued.10. the fourth contention of the appellant is that as the plaintiffs have themselves taken in respect of other claims portions of sale monies of.....
Judgment:

Greaves, J.

1. The first of these appeals (No. 501 of 1914) is an appeal by the Company (defendant No. 14 in the suit), against that part of the decree of the Subordinate Judge of Midnapur, dated the 15th July 1914 passed in Civil Suit No. 13/378 of 1913, which declares that the sum of Rs. 5,521-2-9 and Rs. 447, proportionate costs, are a charge over 5/9ths of the tenures set out in the 3rd Schedule (Schedule Ga) to the plaint. The second appeal (No. 505 of 1914) is an appeal by the plaintiffs in the suit against that part of the decree which disallows a portion of their claim. The respondents in Appeal No. 501 who appeared were the defendants Nos. 11, 12 and 13 and the plaintiffs, and in Appeal No. 505 the defendants Nos. 11,12,13 and 14.

2. After Appeal No. 505 was opened the learned Vakil for the plaintiffs-appellants stated that he did not desire to press the appeal and this appeal accordingly stands dismissed. We make no order as to costs in this appeal.

3. Before dealing with the points raised by the appellants in Appeal No. 501, it is necessary to state shortly the material facts. The suit out of which this appeal arises was a suit to enforce a mortgage bond, dated the 5th February 1900, executed by Ram Chand Dutt and the defendant Umesh Chundra Dutt in favour of one Kartik Chundra Mitter. The advance stated in the bond is Rs. 4,000 and the executants covenant to pay interest at the rate of Re. 1-4-0 per mensem from the date of the mortgage until realization. The mortgage states that the executants received the Rs. 4,000 according to the schedule, which contains a memorandum of the consideration setting out the numbers of the currency notes in the presence of the Sub-Registrar. The Rs. 4,000 and interest were secured by an hypothecation of certain properties set out in schedules Ka and Kha thereto, which are stated to be subject to certain incumbrances set out in the mortgage bond, including as regards some of the properties a mortgage bond, dated the 16th September 1889, in favour of the mortgagee Kartik. At the foot of Schedule Kha is a statement by the executants that their shares and rights in the properties mentioned in the schedules were mortgaged.

4. The mortgage bond was registered on the 7th February 1900 in the Midnapur Sub-Registry Office by Umesh and the memorandum of registration bears a note by the Sub Registrar that receipt of the consideration money was admitted by the executants.

5. Schedules Nos. 2, 3, 4 and 5 to the plaint in the suit set out the properties mortgaged. It is common ground between the parties that the lands in schedules Nos. 4 and 5 are no longer liable to discharge the mortgage debt. Those in the 4th Schedule known as Silda had been mortgaged prior to the mortgage in the suit to Kartik in 1889 by Ram Chand Dutt, Umesh and Umesh's brothers Bapin and Natabar, in respect of which mortgage the plaintiffs as heirs of Kartik obtained a decree in Suit No. 15 of 1902, which decree they sold to the Company, the appellants, who put the lands up to auction under the decree and themselves purchased them, with the result that the lands were discharged from the mortgage in suit, and as regards the lands in Schedule No. 5 these prior to the mortgage in suit were by pothecated in 1293 by Ram Chand Dutt and the defendants Nos. 1 to 3 to the estate of one Chowdhuri Janmenjoy Mullick, in respect of which hypothecation a decree was obtained and the properties brought to sale with the effect that they were discharged from liability under the mortgage in suit.

6. As rerads the lands in the Second Schedule these, have been acquired by purchase by defendants Nos. 4 to 13 and by defendant No. 15 and have been held liable to the mortgage in suit subject to certain deductions, and no appeal has been preferred in respect of such liability. As regards the properties in the 3rd Schedule they were purchased by the Company appellants at an auction gale held in respect of decrees for rent obtained by them against the mortgagors. The plaintiffs contend that these lands are still liable for the mortgage in suit and the learned Subordinate Judge has, as already stated, to the extent stated above, so held and it is in respect of his decision with regard to these lands that this appeal has been preferred.

7. The following points were urged before us on behalf of the appellants. First, it is said that the deed was collusive and that no consideration in fact passed; and we dre asked to take into consideration the fact that Kartik the mortgagee was well acquainted with the mortgagors' position, knew that they were in involved circumstances, knew that a common manager had been appointed under Section 95 of the Bengal Tenancy Act, who could mortgage in priority to any charge Kartik might obtain and that under the circumstances it is improbable he would have lent them any money: it is urged, moreover, that no accounts of Kartik were filed to show that the advance was in fact made, that no attempt was made to enforce the mortgage despite the several opportunities that occurred, for example, the occasion of the enforcement of Kartik's prior mortgage of 1889, and that the endorsement of the Sub-Registrar as to acknowledgment of receipt of the mortgage monies does not accord with the statement in the body of the mortgage that the money was paid in his presence. As against these alleged improbabilities we have the fact that two witnesses Girish, the Sudar Naib of Umesh, and Uma Charan, the plaintiffs' manager and Am-Mukhtar, have both sworn to the payment of the mortgage monies; and that the Subordinate Judge has, and we think rightly, accepted their evidence.

8. Secondly, it is urged that as the properties were at the date of the mortgage under a common manager appointed in 1898, the mortgage is invalid and unenforceable and that as the suit seeks to enforce the Hen against the whole property and not in respect of the mortgagors shares, it is not maintainable, but the mortgage sought to be enforced is a mortgage of the shares of the mortgagors and the fact that a common manager has been appointed does not prevent the dealing with individual rights--Amar Chandra Kundu v. Shoshi Bhushan Roy 31 C. 305 : 31 I.A. 24 : 8 C.W.N. 225 : 8 Sar. P.C.J. 603 (P.C.), and even if the plaintiffs have claimed in their plaint more than they are strictly entitled to this is no bar to their obtaining a decree for what they are entitled and the decree has confined the relief granted to the shares of the mortgagors.

9. Thirdly, it is contended that the suit is not maintainable having regard to the provisions of Order XXXIV, Rule 1 of the Code of Civil Procedure and to the fact that all the persons interested in the equity of redemption of the hypothecated premises are it is said, not before the Court. We do not think that this contention is well founded, the only persons who Counsel for the appellants contended were not before the Court, are persons who received portions of the sale-proceeds of Schedules Nos. 4 and 5 and the person for whom defendant No. 5 in his written statement states that he is a benqmdar. Now no relief is claimed in respect of Schedules Nos. 4 and 5, consequently the persons who received portions of the sale-proceeds of these properties are not affected and were not necessary parties to the suit, and as for the allegation of defendant No. 5 this is denied, and has not been established and we think the defendant No. 5, as being the person who took out a sale certificate, has been rightly sued.

10. The fourth contention of the appellant is that as the plaintiffs have themselves taken in respect of other claims portions of sale monies of properties subject to the mortgage, and thus released such monies from their liability to contribute to the mortgage they are entitled to have these brought into account and to be relieved from a proportionate liability; they also claim that the value for the purpose of such apportionment should be taken in accordance with the values of these properties at the date of the mortgage. The short answers to these contentions is that the learned Subordinate Judge has taken the sale-monies into account where he has found an intention to release by failure to claim against these monies and has made proportionate reduction in the liability of the appellants; he also upon the evidence before him has to the best of his ability arrived at the value of the properties at the date of the mortgage.

11. The fifth contention is that in order to ascertain the liability of the appellants it was necessary to ascertain Mohesh's share and that this cannot be done in the absence of Bama Sundari, or her heirs. What the Subordinate Judge has done is to accept the oral evidence of Grish Chundra Chaokrabarti that Bama Sundari gave her share to Umesh and his brothers by way of a compromise in a suit and he has treated this share as belonging to Umesh, although he has not affected such interest (if any) as Bama Sandari's heirs may have taken or may take on her death. The evidence with regard to this share is not very satisfactory as the compromise decree was not produced, but as already stated, the Subordinate Judge has accepted the oral evidence that Bama Sundari gave her share to Umesh and his brothers by way of a compromise in a suit, and finds that Umesh was in possession of the share and under these circumstances we are not prepared to dissent from his finding on the point.

12. The sixth contention is with regard to the supplementary judgment of the Subordinate Judge delivered on the 8th July 1914. It appears to us that the Subordinate Judge did more than correct an error in calculation he altered in fact the basis of his calculation, but in any case as both appeals are before us, even if the Judge, was wrong in delivering the second judgment, we can now do justice between the parties and adjust the appellants' liability to accord with what upon the facts We think that liability should be.

13. The seventh contention was that the plaintiffs by previously neglecting to assert and enforce their mortgage had prejudiced the Company and debarred themselves from now enforcing it against the Company. This depends upon whether the appellants had previous notice of the mortgage, we think that they had, In Rent, Suit No. 9 of 1906 the plaintiffs were made parties in respect of certain mortgages executed in their favour by Ram Chand Dutt and by Umesh and his brothers (see paragraph 8 of the plaint in that suit) and the general manager of the appellants Mr. Gregson was also a party to that suit. We think, therefore, that it is probable that the appellants had notice in that suit of the mortgage now sued upon, but even if this were not so it appears to us to be beyond doubt that the appellants must have had notice of the mortgage in Ishan Chundra Singha's suit on his mortgage (Suit No. 341 of 1904); the judgment in that suit in unequivocal terms refers to this mortgage and the decree in the suit was purchased by the appellants and executed by them, and under these circumstances we think as already stated that they must be deemed to have been fixed with notice of the mortgage.

14. This being so, the appellants eighth contention that they have annulled the encumbrance also goes and, moreover, as regards this contention the learned Subordinate Judge has found, and we agree with his finding, that no notices under Section 167 of the Bengal Tenancy Act have been duly served.

15. This exhausts the appellants' contentions with one exception, namely, that they contend that the learned Subordinate Judge has not correctly calculated their liability under the mortgage.

16. Now the principle upon which the learned Subordinate Judge proceeded in his original judgment in calculating the present liability under the mortgage was as follows: He found that the plaintiffs might have satisfied their mortgage in part out of the surplus sale-proceeds of certain of the hypothecated properties which have been sold from time to time under paramount titles and as the plaintiffs neglected to enforce their rights under their mortgage against such surplus proceeds, he has calculated the liability which would have attached under the mortgage to the surplus sale-proceeds so withdrawn and has exonerated the properties now sought to be made liable proportionately from liability; Whether this is correct or not may need consideration hereafter. In applying this principle he has found that the plaintiffs might have enforced their liability against 1/3rd of the surplus sale proceeds of Kuthibati, 1/3rd being the extent of their charge, and because they did not do so he has disallowed such portion of their claim as would have been proportionately charged on these proceeds. He finds the surplus sale-proceeds to be Rs 3,687-9-3 of which 1/3rd is Rs. 1,229-3-1, but as he has dealt separately with the amount of surplus sale-proceeds withdrawn by defendant No. 4, viz. Rs. 111-3-6, he has taken the surplus as Rs. 3,576-6-3 and 1/3rd as Rs. 1,192-2-1 and he deprives the plaintiffs of such proportion of their charge as would have been proportionately charged on Rs. 1,192-2-1. We do not see that the Company have any ground of complaint as regards this.

17. Similarly with regard to Silda he has found the surplus sale proceeds available to answer the plaintiffs' charge to be Rs. 617-130 and he has deprived the plaintiffs of such proportion of their charge as would have been proportionately charged on this sum. Again we do not see that the Company have any ground of complaint on this score.

8. He has acted similarly with regard to the tenures, that is, the properties in the third Schedule, in his first judgment. The Company brought them to sale in execution of a rent decree for Rs. 1,413-11-11; at the sale they fetched Rs. 12,900 being purchased by the Company there thus being surplus sale proceeds to the extent of Rs. 11,486-4-0. Five-ninths of the tenures were mortgaged to the plaintiffs' father, so the Subordinate Judge, after deducting from Rs. 11,486-40 a sum of Rs. 973 which was taken by the Company out of the surplus sale proceeds in satisfaction of a money decree, relieves the Company from liability in respect of 5/9ths of the difference, only making them liable for such proportion of the mortgage as was charged on Rs. 1,413-11-11 and Rs. 9,3. It, so doing it appears to us that he has acted in accordance with the principles applied by him to Kuthibati and Silda. But if the matter stood there, his calculation is open to criticism as the rent decree held priority over the mortgage and he should have deducted this from the sale proceeds to arrive at the value of the property in 1900. The Company are not interested in the properties in the 2nd Schedule and it does not seem necessary for the purposes of this appeal to examine how liability has been apportioned on these, nor in fact has the apportionment been called in question by the appellants. When, however, the Subordinate Judge delivered his second judgment, it seems that he departed from the principle followed by him as he says that he acted wrongly in taking it, to account with regard to the tenuies the surplus sale-proceeds withdrawn by persons other than the Company, and he accordingly makes the tenures or rather 5/9ths of them liable after deducting 5/9ths of the rent charge, that is to say, he takes their value at the date of the mortgage as Rs. 12,900, of which 5/9ths is Rs. 7,166-10-0, from which he deducts 5/9th a of the rent charge of Rs. 1,413, that is Rs. 785-6-0, and makes the Company liable for the difference, that is, for Rs. 5,521-2-9, which he declares to be a charge on the tenure together with Rs. 447, proportionate costs. The question, therefore, which arises on this branch of the appeal is, whether the Subordinate Judge acted rightly in not taking into account the surplus sale-proceeds of the tenures out of which the plaintiffs, had they been so minded, might have satisfied their mortgage.

9. It will be well to state what appears to us to be the settled law in cases of this nature. If properties A, B and C are mortgaged they are all equally liable in the hands of mortgagor for the mortgage; if, however, during the subsistence of the mortgage they pass into other hands they are still similarly liable but the owners inter se, when the mortgage is enforced, are entitled to have the liability apportioned rateably between the properties according to their value at the date of the mortgage. See Section 82 of the Transfer of Property Act. This, however, is a right between the holders of the properties inter se and does not affect the mortgagee's right to enforce his mortgage against all or any of the properties.

10. If, however, the mortgagee releases one or more of the properties from liability under the mortgage with knowledge that there has been a change of ownership as to some or all of the properties, then the pro parties which remain liable are only liable to such part of the mortgage debt as is proportionate to their value at the date of the mortgage, Imam Ali v. Baij Nath Ram Sahu 33 C. 613 at p. 622 : 10 C.W.N. 551 : 3 C.L.J. 576. Now in this case the learned Subordinate Judge has found that 5/9ths of the tenures are still liable to the 'plaintiffs' mortgage, that is to say, he' has found that the mortgagees' neglect to enforce their charge against the surplus sale proceeds of the tenures did not amount to a release of these properties from their liability to the mortgage debt. This is a question of fact and not of law, and we are not prepared to say that the Subordinate Judge has upon the facts come to a wrong conclusion, and the fact that he has come to a different conclusion with regard to the failure to enforce the lien against the surplus sale proceeds of other properties does not necessarily vitiate the conclusion which he: has come to with regard to the tenures and, moreover, in the other cases the sales were in respect of overriding charges which had the effect of discharging the properties sold in respect of subsequent charges, which is not so in the case of the sale of the tenures. In the result the appeal fails and must be dismissed with costs, 2/3rds to the plaintiffs respondents and the remaining 1/3rd equally among respondents-defendants Nos. 11, 12, and 13.

Teunon, J

14. I agree.


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