EAPEN PHILIPOSE Vs. NEELAKANTAN RAMAN
HIGH COURT OF KERALA
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(1.)Both the appeal and the Civil Revision Petition are by the same person, who is the defendant in O. S. Nos. 163 of 1957 and 213 of 1959 on the file of the Munsiff, Haripad. On April 4, 1951, he executed a possessory mortgage in favour of the respondent for a sum of Rs. 500/- and took back the property on lease agreeing to give 20 parahs of paddy as its annual rent. Averring the rent to have fallen in arrears since January 1954, the respondent instituted O. S. No. 163 of 1957 terminating the lease and claiming the mortgage money with interest from date of suit. That suit was decreed ex parte allowing recovery of the mortgage amount, but disallowing the claim for interest and reserving the right to collect rent under the lease back. The respondent then instituted O. S. No. 213 of 1959 for rent accrued since August, 1954 and the appellant resisted that claim stating that he had paid rent up to 6-2-1955, that the lease had been terminated in 1957 and that part of the claim had become barred by time. The courts below have decreed the suit in respect of the rents accrued since the 11th April, 1957, and postponed decision on the claim for the prior period in view of Kerala Act 1 of 1957. Meanwhile, the appellant moved to have the decree in O. S. No. 1.63 of 1957 discharged under the Kerala Agriculturists Debt Relief Act, 31 of 1958, which will be referred to hereinbelow as the Act, and that has been allowed by the Court. The respondent then moved an application to amend the decree in O. S. No. 163 of 1957, under S.7 of the Act, so as to include interest on the mortgage amount; and that has been allowed by the lower appellate court. The Civil Revision Petition is against the appellate order in the Debt Relief Petition; and the Second Appeal is against the appellate decree in O. S. No. 213 of 1959.
(2.)Under S.11(6) of the Kerala Agriculturists Debt Relief Act, 31 of 1958, where the property mortgaged has been leased back to the mortgagor by the mortgagee, the possessory mortgage has to "be deemed a simple mortgage from the date of the lease back" with a provision for interest at 5 per cent per annum on the mortgage amount after the commencement of the Act. But, there is no provision in the Act for reappropriation of any rent already paid under the lease back towards interest payable under the "demeed" simple mortgage. Counsel referred to S.5 of the Act to contend that interest on the mortgage amount has to be calculated at five per cent per annum from the date of the transaction, and the market value of the paddy paid as rents under the lease back readjusted towards such interest. The provision in Clause.6(b) of S.11 of the Act that 'the interest payable on the mortgage amount after the commencement of the Act shall be at 5 per cent per annum' clearly indicates that the earlier provisions regarding interest in the Act do not apply to the simple mortgage notionally created by that section. S.5 may be a general provision applicable to all subsisting debts, inclusive of those under simple mortgage actually executed between the parties; but S.11(6)(b) is a particular provision governing the simple mortgages newly brought about by the deeming provision in S.11(6)(b). As that provision for interest in S.11(6)(b) does not cover any period before the commencement of the Act, any rent paid as such under the lease back cannot be reappropriated as interest on the simple mortgage amount but must be held to have gone in discharge of the obligation between the parties in the concerned period. It is pertinent to note that where the mortgagee had been in direct possession of the mortgaged property or had leased it to any person other than the mortgagor, the Act does not require him to reappropriate the income or rental of the property towards any stipulated interest on the mortgage amount. Payments of rent made before the commencement of the Act cannot therefore be reopened now.
(3.)The question then remains in regard to the period prior to the commencement of the Act for which no rent as such had been paid under the lease back. The answer is not free from difficulty. As the possessory mortgage accompanied by a lease back is to be deemed a simple mortgage "from the date of the lease back" a present claim for rent, even if it be in regard to a period anterior to he commencement of the Act, would be directly against law and cannot therefore be countenanced by the Court. The mortgagee can be held entitled only to interest on the mortgage amount, and that at 5 percent per annum which is the only rate recognised by the Act.
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