GYAN CHAND SUNDA Vs. RAM PRASAD AGARWALLA
LAWS(PAT)-1960-2-18
HIGH COURT OF PATNA
Decided on February 17,1960

GYAN CHAND SUNDA Appellant
VERSUS
RAM PRASAD AGARWALLA Respondents


Cited Judgements :-

G GNANAMUTHU NADAR VS. GNANASUNDARI [LAWS(MAD)-1999-12-72] [REFERRED TO]


JUDGEMENT

Kanhaiya Singh, J. - (1.)This is a second appeal by defendants 1 and 2, who are assignees of the mortgage from the original mortgagee (defendant No. 3). The plaintiff-respondent purchased the equity of redemption sometime in 1940 and instituted this suit for the redemption of the mortgage. One defence taken by the defendant-appellants, with which we are now concerned in this second appeal, was that they were entitled to remove the materials of the structure constructed by them on the mortgaged property. It is common ground that, at the time of the mortgage, certain houses stood on the mortgaged property. It is also admitted that they were in a dilapidated condition. It is also not disputed that the appellants had erected new constructions in their stead at a cost of Rs. 3,000. The appellants claim, that on redemption of the mortgage, they should be allowed to remove the materials of the houses they had constructed on the mortgaged property. This claim has been disallowed by both the Courts below.
(2.)The sole point that falls for determination in this appeal is whether the mortgagee or his assignees are entitled to the improvement made by them OB the mortgaged property, or, for the matter of that, they are entitled to remove the materials of the structures constructed by them on the same.
(3.)Learned counsel for the appellants strenuously urged that, although the appellants may not be entitled to retain possession of the houses constructed by them on the mortgaged property, they should not, at least, be debarred from removing the materials of the structures. This contention of learned counsel runs counter to the provisions of section 63A of the Transfer of Property Act, which provides as follows :
"(1) Where mortgaged property in possession of the mortgagee has, during the continuation of the mortgage, been improved the mortgagor, upon redemption shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in cases provided for in Sub-section (2), be liable to pay the cost thereof. (2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal, money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor." It is manifest that, if the mortgagee in possession has, during the continuance of the mortgage effected improvement upon the mortgaged property, the mortgagor, on redemption, shall be entitled to the improvement, subject, of course, to any contract to the contrary. This provision is based upon the principle that the mortgagee cannot be allowed to "improve the mortgagor out of his estate."
There is no dispute that, under the terms of the mortgage-bond, the mortgagee was not entitled to the improvement effected by him upon the mortgaged property. Now, under section 63A of the Transfer of Property Act, the mortgagee cannot have any title to the structure by him during the subsistence of the mortgage. He had no right to make any improvement on the mortgaged property and, if he did so, he cannot have the benefit of that improvement. Learned counsel for the appellants has contended that the improvement may go to the mortgagor, but there is nothing to prevent the mortgagee or his assignees from removing the materials of the structures constructed by them or the improvement made by them upon the mortgaged property. This contention is not warranted by the plain meaning of section 63A of the Transfer of Property Act. It will be seen that, under this section, the mortgagor will not only be entitled to the improvement but also he shall not be liable to pay the cost thereof except in cases falling under Sub-section (2). The combined effect of Sub-section (1) and (2) of Section 63A of the Transfer of Property Act is that, on no account, the mortgagee will be entitled to retain the improvement, rather the mortgagor will be entitled to the improvement and he will not be, at the same time, liable to pay the cost thereof except in cases falling under Sub-section (2). It is not the case of the appellants that the improvement effected by them is covered by subsection (2) aforesaid. If the mortgagor is entitled to the improvement without payment of the cost thereof to the mortgagee, it inevitably follows that the mortgagees cannot, in law, claim to have the materials for themselves. Section 63A, therefore, debars the mortgagee or his assignees even from removing the materials. The position, in my opinion, appears to be perfectly plain. The contention of learned counsel is therefore without substance and in fact, no authority has been cited before me in support of the same. It must be held, therefore, that the appellants are not entitled to remove the materials of the house constructed by them on the mortgaged property and the view taken by the Court below was, therefore, correct. There is, thus, no merit in the appeal which is dismissed but, in the circumstances of this case, the parties will bear their own costs of this appeal.


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