Sikri, J. - (1.) This appeal by special leave is directed against the judgment and decree of the Bombay High Court in Appeal No. 598 of 1960, whereby the High Court confirmed the judgment and decree dated January 30, 1960, passed by the Extra Assistant Judge, District Court, Ahmednagar, in Regular Appeal No. 300 of 1958, confirming the decree dated April 7, 1958, passed by the Joint Civil Judge, Junior Division, Ahmednagar, in Civil Suit No. 609 of 1948.
(2.) The relevant facts for the determination of the points raised before us by the learned counsel for the appellant-mortgagee are as follows:The respondents before us filed a suit for the redemption of the mortgage of a bungalow at Ahmednagar alleging that the sale-deed in respect of this bungalow for Rs. 5,000 was in fact a possessory mortgage. One of the terms of this deed dated August 4, 1928, was: "However a condition is laid down that if we pay you within three years from this day Rupees five thousand relating to this sale deed, and (interest) thereon at the rate of 12 twelve annas per cent per mensem at yearly rests, and the amounts spent by you to meet the expenses for repairs, constructions, taxes, etc. together with interest (at the rate) mentioned above ................. ........... .. you are to receive the same and allow us to purchase the aforesaid property back.." The transaction was held to be a mortgage and there is no dispute on this point. On April 7, 1958, the suit was finally decreed for redemption of the property subject to a payment of Rs. 9,224-12-0, Rs. 4812-6-0 as principal, and Rs. 4,612-6-0 as interest thereon, within six months from that date. A preliminary decree was directed to be drawn up. The appellant filed an appeal in the Court of the District Judge, Ahmednagar, and, among grounds, alleged that "the Court ought to have directed the Commissioner to deduct the rent received (i) first towards taxes, then (ii) towards, interest of the amount of repairs, etc., then (iii) towards interest on the principal amount, then towards (iv) amount of repairs and expenses and then towards the principal of the loan. The Extra Assistant judge did not agree with this, contention, and dismissed the appeal. The appellant filed a second appeal to the High Court. The High Court also discharged with the above contentions. The High Court held that the priorities had been settled by the courts below in accordance with the provisions of Section 76 (h) of the Transfer of Property Act, 1882 (IV of 1882) and were, therefore, proper.
(3.) The method of accounting followed by the Commissioner appointed in the case, and which was accepted by the courts below, was as follows:Out of the income derived from the property (There is no dispute that the bungalow was fetching rent from month to month) the outgoings were deducted in the following order of priority: 1. Payment of taxes. 2. Payment of interest on the amount of expenditure on maintenance and repairs. 3. Payment of the expenditure on maintenance and repairs. 4 Interest on the amount of principal of the mortgage bond. 5 Amount of principal under dispute. ;