KIRANSWAROOP RAJARAM Vs. RAGUNATH PRASAD SAWALDAS AND ORS.
LAWS(MPH)-1955-11-10
HIGH COURT OF MADHYA PRADESH
Decided on November 21,1955

Kiranswaroop Rajaram Appellant
VERSUS
Ragunath Prasad Sawaldas And Ors. Respondents

JUDGEMENT

Dixit, J. - (1.) THE suit out of which this appeal has arisen was instituted by Raghunath Prasad, Kedarnath and Hiralal against Kiran Swaroop and Mt. Haidari for the possession of an open land together with a Chabutra standing, thereon and for mesne profits. The Plaintiff's case was that the property in suit was mortgaged with possession in their favour by Mt. Ludako by a registered deed on 3 -4 -1939; that thereafter Mt. Ludako took the property on rent from the mortgagees and continued in possession' of the property as mortgagees' tenant until her death sometime in 1946; that on 3 -7 -1947 the Defendant Kiran Swaroop. got Mt. Haidari to execute a sale deed of the property in his favour and took possession of the property. The Plaintiff's alleged that a" mortgagees they were entitled to the possession of the property and that the Defendant's possession was illegal arid unauthorised. On these allegations the Plaintiffs claimed the recovery of possession of the property as well as mesne profits at the rate of Rs. 10/ - per month. Mt. Haidari admitted the Plaintiffs' claim. The Defendant Kiran Swaroop contested the suit inter alia on the ground that Mt. Ludako was not the owner of the property and that, therefore, the mortgage executed by her in favour of the Plaintiffs, was void and inoperative and that he was in possession of the property as a purchaser from Mt. Haidari. the real 'owner of the property. It was also pleaded in the alternative that as Mt. Haidari was the daughter of Mt. Ludako, she was competent to sell the property as legal representative of Mt. Ludako to the Defendant. The Defendant further stated that the Plaintiffs were not entitled to the relief of possession of the property and mesne profits. The -learned Civil Judge Second Class Gwalior who tried the suit found that Mt. Ludako was the rightful owner of the property; that she executed a mortgage with possession of the property in favour of the Plaintiff's on 3 -4 -1939; that the transfer of the property by Mt. Haidari to Kiran Swaroop was not valid; and that under the terms of the mortgage,, the Plaintiffs were entitled to -the possession of the property. On these findings a decree for the possession of the property in favour of the Plaintiffs was passed by the trial Court directing the Defendant Kiran Swaroop to pay the costs of the suit to the Plaintiffs and the Defendant Mt. Haidari. It also contained a direction for an inquiry into the mesne profits. The Defendant Kiran Swaroop then appealed to the Court of Civil Judge First Class. Lashkar. The appellate Court held that Mt. Haidari was a legal representative of Mt. Ludako and , that the sale of the property by her to Kiran -swaroop was valid. The other findings of the trial Court were, however, upheld in appeal. The appellate Court made a modification in the decree of the lower Court with regard to costs by disallowing the Plaintiff's costs on the claim of mesne profits. In other respects the decision of the trial Court was affirmed and the Defendant's appeal was dismissed leaving the parties to bear their own costs. The Defendant has now preferred this appeal against the decision of the Civil Judge First Class. Lashkar. The Plaintiffs have also filed a cross -objection with regard to the costs of the appeal disallowed to them. During the pendency of this appeal Hiralal died. As according to the Plaintiffs Hiralal, Raghunath Prasad and Kedarnath were members of a joint Hindu family and the mortgage was effected through 'Hiralal in favour of the family and as Raghunath Prasad was now the Karta of the family, the appeal was heard as against Raghunath Prasad and Kedarnath the surviving co -parceners, who were already on record.
(2.) BEFORE me it was not disputed that Mt. Ludako was the owner of the property in suit and that on 3 -4 -1939 she mortgaged the property with possession in favour of the Plaintiffs; that after the mortgage she remained in possession of the property as a tenant of the mortgagees until her death; and that on 3 -7 -1947 Mt. Haidari, as a legal representative of Mt. Ludako, sold the property to Kiran Swaroop and that the sale was valid. The main question debated in this appeal is whether the Plaintiffs are entitled to recover the possession of the property or whether their only remedy as mortgagees is to sue for the recovery the mortgage amount. Mr. Inamdar learned Counsel appearing for the Appellant submitted that the mortgage in favour of the Plaintiffs was an anomalous mortgage; that under Section 98, Transfer Property Act, the rights and liabilities of parties to the mortgage were governed by terms of the mortgage deed; that under the mortgage contract the only right given to the mortgagees was to sue for the recovery of the mortgage money by the sale of the mortgaged property on the expiry of the period of two years within which the mortgagor undertook to repay the debt; and that, therefore, the mortgagees could not obtain the possession of the property after the stipulated term fixed for redemption. It was also said that under Section 68, Transfer of Property Act the only remedy available to the mortgagee, who fails to obtain possession of the mortgaged property is to sue for the mortgage money. Now it is quite true that the mortgage made in favour of the Plaintiffs was an anomalous mortgage and that under Section 98, Transfer of Property Act the rights and liabilities of the parties thereunder are governed by the contract as evidenced in the mortgage dead. But I am unable to accept the contention that under the terms of the mortgage, the mortgagees were entitled to the possession of the property, only during the period fixed for redemption and that thereafter their only remedy was to sue for the recovery of the mortgage amount by the sale of the property or that Section 68, Transfer of Property Act denies to the Plaintiffs the remedy of the recovery of possession. The mortgage was with possession and with the stipulation that the mortgage amount of Rs. 500/ - would carry interest at the rate of 12 percent. per annum; that the mortgagees would credit the rents and profits to interest and the deficiency in interest, if any, would be made up by the mortgagor and that if the rent realised exceeded the amount of interest, the excess rent would be appropriated by the mortgagor; that the mortgagor would redeem the property within two years and on. his failure to do so, the mortgagees would have the option (Akhtyar) to sue for the recovery of the mortgage amount by the sale of the property. The terms with regard to the realisation of the amount are in the following words: vxj fe;kn etdwjs ckyk ds vanj tehu ejgwuk ckxqtk'r u djkbZ tkos rks eqrZgu ekSlwQ dks b[R;kj gksxk fd vxj og pkgs rks ukfyl tehu ejgwuk nkej djds tehu ejgwuk dks fuyke djkdj viuk erkyck olwy djsa o olwjr dHkh nhxj tk;nkn gj fdLeh jkfguk ls o tkr [kkl jkfguk ls ftl rjg pkgs olwy djsa eq>s ;k esjs okjlku o dk;e eqdkeku dks dqN mtj u gksxk A The above terms of the mortgage deed clearly show that the mortgagees were entitled to possession ini their right as mortgagees not only for the stipulated period of redemption but until the discharge of the mortgage debt. The fact that the, mortgage deed authorised the mortgagees in case of default of redemption within a period of two years to sue for the recovery of the debt by the sale of the mortgaged property, cannot take away the right of the mortgagees to the possession of the property, which arises under the terms of the mortgage. The fixation of a term for the redemption of the property is not inconsistent with the mortgagees' right to retain or obtain possession so long as the debt is subsisting. Nor is the personal covenant to pay the debt. The terms of the mortgage deed give an option to the mortgagees to sue for the realisation of the debt by the sale of the mortgaged property on the expiry of the period fixed for redemption. It does not take away the mortgagees,' right to continue in possession until the mortgagor himself redeems the property. This option given to the mortgagees' cannot be read as an obligation on their part to give up possession and sue for the recovery of the mortgage debt by the sale of the property. If then, as I think, under the terms of the deed the mortgagees are entitled to retain possession of the property until the discharge of the debt, they must obtain the possession of the property if they have been dispossessed therefrom during the subsistence of the mortgage. The contention that if the Plaintiffs have been dispossessed from their security, their procedure is to ask the relief under Section 68(1)(d), T.P. Act, is, in my opinion, devoid of any substance. That provision does not deal with the mortgagee's right to sue for possession, when being entitled to possession. 'of the mortgaged property he fails to obtain possession from, the mortgagor or is dispossessed therefrom. If the mortgagee is entitled to the possession of the mortgaged property and if the mortgage deed does not contain a personal covenant to pay, then under Section 63(1)(d) the mortgagee has a supplemental right to sue for the mortgage money in the circumstances mentioned in the clause. The provisions of Section 68(1)(d) are designed for the purposes of indemnifying the mortgagee against the failure of the mortgagor to deliver possession of the property and against any disturbance in the mortgagee's peaceful enjoyment of the property. It is a provision of an enabling nature, which does not preclude a mortgagee who has failed to obtain possession or who has been disturbed in his possession from suing the mortgagor or the person causing the disturbance for the recovery of possession of the property. There is nothing in Section 68(1)(d) to disqualify a usufructuary mortgagee or a mortgagee who under the terms of the mortgage deed is entitled to retain possession of the property until the discharge of the debt and who is also given the right to sell the property, from asserting his right to obtain possession in the event of the mortgagor's failure to deliver possession or in the case of disturbance in the possession. I am supported in this view by the decisions in - 'Linga Reddi v. Sama Rau', 17 Mad 469 (A); 'Thakun Chaudhary v. Manrup', 18 Ind Cas 735 (Cal) (B); and 'Bechu Sahu V. Arjun', AIR 1918 Pat 316 (C). There is no doubt a decision of the Patna High Court reported in Bishun Prasad Ram v. Anup Narain 'Singh' : AIR 1949 Pat 166 (D), where a Single Judge has observed at one place that on the expiry or the term of a usufructuary mortgage the only remedy of the mortgagee who is out of possession is to sue under Section 68, T.P. Act 'for the recovery of the mortgaged money and that the remedy of a suit for possession was not available to him. In that case the usufructuary mortgage was for a term of five years. After the mortgage, the mortgagor continued in possession of the property as a lessee on monthly rent. When, the mortgagee sued the mortgagor for possession and for recovery of arrears of rent in lieu .Of interest, the term of the mortgage had expired. It was held that there was no relationship of a landlord and a tenant between the parties after the expiry of the term of the mortgage deed and consequently the remedy of the mortgagee was under Section 68, T.P. Act for the recovery of the mortgage money and not by way of a suit for possession or for recovery of rentain lieu of interest. I must confess I am unable to gather from the judgment in ' : AIR 1949 Pat 166 (D)', the reaning on which the learned Judge came to the conclusion that Section 63(1)(d), T.P. Act prervented a usufructuary mortgagee from suing for possession. If the mortgage was a usufructuary mortgage, then under Section 58(d), T.P. Act the mortgagor was bound to deliver possession and to authorise continuance of possession until the payment of the mortgage money. The learned Judge of the Patna High Court concluded by saying had It been shown to me that under the terms of the deed of mortgage, the Plaintiff was entitled to recover possession even after the expiry of its terms, or that he was entitled to recover interest on the sum advanced, I would have granted him a decree. It is plain from this observation that the learn -?ed Judge himself was not inclined to hold that In -cases where the terms of the mortgage deed authorised the mortgagee to retain possession of the Property even after the expiry of the period stipulated for redemption and until payment of the mortgage -money, Section 68, T.P. Act would bar a suit for recovery of possession. This decision has no applicability here, where, as I have held, under the terms of the mortgage deed the mortgagee is entitled to regain -in possession of the property until the payment of the mortgage money and has been fyenan option to sue for the recovery of the oney by the sale of the propertv in the event of the mortgagor's failure to redeem the property within the stipulated period. Mr. Motilal Gupta learned Counsel for tho espondents referred me to - 'Sidramaya Nilkanthavaswami v. Danava Shidramappa Deshnur : AIR 1954 Bom 407 (E). The Bombay case was not directly In point here. In that case the sestion considered was of the period of limitation for a suit to recover mortgage mones by mortgagee who has failed to obtain possession the property mortgaged to him. In connection with this question the provisions of Section 68(1)(d) were considered and it was observed by the learned Judges of the Bombay High Court that: The provisions of Section 88(1)(d) mean that if the mortgagee has no right to sue for the mortgage money by virtue of the mortgage deed as such, he would be entitled to sue for the mortgage amount in case the mortgagor commits a default as mentioned in that clause... If the mortgage deed specifically provides a personal covenant to pay, the mortgagee may either exercise his option under Section 68(1)(d) or may act under the terms of the personal covenant itself. If the option is exercised by him under Section 68(1)(d), the mortgage amount becomes due and the mortgagor will have to submit to a decree for the payment of the said amount. If the option under Section 68(1)(d) is not exercised by the mortgagee, the amount cannot be said to be due and the mortgagor will have to wait for the expiration of the stipulated period before lie can redeem the property. The fact that the mortgagor commits a default in delivering possession of the mortgaged property cannot be held to lead to his benefit by compelling the mortgagee to sue for the mortgage amount within twelve years after his default. The default of the mortgagor cannot be permitted to accelerate the period of limitation in his favour. The right conferred on the mortgagee by Section 68(1)(d) is not in the nature of an obligation and so it need not be exercised within twelve years thereafter, notwithstanding the fact that a larger period is available to him under the mortgage deed.
(3.) THE Bombay case is relevant only in so far as it explains the real nature and scope of Section 68(1)(d), T.P. Act. The other case cited by Mr. Motilal Gupta, namely - 'Ranba v. Bansilal', AIR 1953 Hyd 231 (P), is more apposite. In the Hyderabad case which followed - 'Harnam Singh v. Bhula Singh', AIR 1921 Lah 309 (E); '16 Ind Cas 725 (Cal) (B)'; and -'Ram Padarath v. Hima Singh' : AIR 1942 Oudh 172 (H), it has been laid down that when the mortgagee is entitled under the terms to possession and the mortgagor falls to deliver the same to him, the mortgagee may avail himself of the statutory protection afforded by Section 68(1)(d) and proceed to recover his money with interest from the mortgagor or he may at his option sue for the recovery of possession of the property or may sue for damages for breach of a contract to deliver possession. In my judgment in the present case neither the terms of the mortgage nor the provisions of Section 68(1)(d), T.P. Act stand in the way of the Plaintiffs being 'granted the relief of possession of the mortgaged property.;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.