Judgement

Appeal from a judgment and decree of the Court of the Judicial Commissioner (November 9, 1916) varying a decree of the Subordinate Judge of Amraoti (May 15, 1915).

The suit was brought in April, 1913, by the respondent against the appellant in the following circumstances.

On March 9, 1893, one Laxmansa Balkishnasa mortgaged to the appellant sixteen fields in five different villages by a document which, after reciting that the mortgagor had received Rs. 6000, mortgaged the property above men tioned for that amount and authorized the mortgagee (appellant) to take possession if the money due was not paid by July 9, 1893, and to apply the income towards payment of (1.) cultivation expenses, (2.) Government rent and other charges, (3.) interest at R. 1 per cent, per mensem, and (4.) the balance, if any, towards the principal ; the document also purported to authorize the mortgagee (appel-lant) to sell the property. On October 4, 1896, the said Laxmansa Balkishnasa executed a sale deed of one of the fields comprised in the mortgage to the respondents. In the year 1899 the appellant, the mortgagee, sued in the District Court, East Berar, to recover the sum due on the mortgage with interest, and by a consent decree it was agreed that unless the said Laxmansa Balkishnasa made certain payments within a year, nine fields of the mortgaged pro perty, including the field in which the respondents claimed to be interested, should be foreclosed and given into the appellants possession. On December 17, 1900, the conditions of the said consent decree not having been complied with, the Court ordered " that the defendant (the said Laxmansa Balkishnasa) should stand absolutely debarred and foreclosed of and from all equity of redemption of, in, and to the said mortgaged premises." The appellant did not make the respondents parties to the suit and it was found by both Courts that he was ignorant of their interest. The appellant received possession of the property so foreclosed, including the property purchased by the respondents, on April 14, 1901, and had ever since been in possession, but had kept no accounts of his receipts from and expenditure on it.

The respondents by their plaint claimed to redeem the nine fields which were in the possession of the appellant.

The Subordinate Judge held that the appellant could only redeem the field purchased by them, and that they were entitled to do so upon payment of a proportionate amount of the mortgage money which he assessed at Rs. 571.

The plaintiffs appealed to the Court of the Judicial Commissioners contending that they were entitled to redeem all nine fields; and the defendant filed cross-objections stating that it should have been held that the plaintiffs were bound by the foreclosure decree though they were not parties to it, as the defendant had no notice of their interest.

The Court of the Judicial Commissioners varied the decree of the trial judge and made a decree for redemption of the whole mortgage by the plaintiff on payment by him of Rs. 1979 within six months. The officiating Additional Judicial Commissioner dismissed the cross-objections, holding that it was not material whether the defendant had or had not notice of the plaintiffs purchase. As to the appeal, he said " It seems to me that the plaintiffs were entitled to redeem the mortgage as a whole. They cannot be in a worse position than they would have been if they had been made parties to the foreclosure suit. If they had been arrayed among the defendants then, there is no doubt that they could have redeemed the whole mortgage and Mirza Yadalli Begs failure to join them cannot be allowed to benefit him. The first two plaintiffs however did not seek to redeem all the property mortgaged.....They expressly excluded the five fields mortgaged but not included in the consent decree. Though their claim to redeem cannot be denied, there is no force in the contention that the amount now due must be apportioned between the property covered by the consent decree and that released by it. The settlement between Mirza Yadalli Beg and the defendants in the former suit was in effect that he should get his money and that in default of doing so a certain number of the mortgaged fields was to be liable to foreclosure. Now the plaintiffs wish to redeem the fields which they say Mirza Yadalli Beg agreed were to be foreclosed for his debt. It is clear that if they wished to do this they must pay the whole of the mortgage debt before they can be allowed to do so." With regard to the method of accounting he said " To ascertain what is now due, it is necessary to make a fresh account on the mortgage debt from the date of the mortgage, only simple interest being allowed. Against the sum so due must be set off a fair occupation rent of the land for the period it has been in possession of the mortgagee. This rent has been calculated by the Lower Court to amount to Rs. 1600 per annum, and that finding has not been disputed here. The mortgagee is also entitled for the Government assessment paid by him. The account so made shows Rs. 1979, including interest for the six months allowed for redemption, as the sum payable by the plaintiffs."

1920. May 3, 4. E. B. Raikes and Sanyal for the appellant The respondents were only entitled to redeem the field of which they had acquired the equity of redemption unless the mortgagee insisted upon the whole mortgage being redeemed, which was not the case.

[VISCOUNT HALDANE referred to Fisher on Mortgages, 6th ed., para. 1447.]

That is not the law in India, as appears from the judgment of the Board in Azimut Ali Khan v. Jowahir Singh (( 1870) 13 Moo. I. A. 404, 415); also from the concluding words of s. 60 of the Transfer of Property Act, 1882, where that Act applies, which was not the case here. Since the decision in Rathna Mudali v. Perumal Reddy (( 1912) I.L.R. 38 M. 310.) Huthasanan Nambudri v. Parameswaran Nambudri (( 1898) I.L.R. 22 M. 209.) is not an authority that the holder of the equity of redemption in part of mortgaged property is entitled to redeem the whole in the absence of consent. The rights of the parties are to be determined by the rule of justice, equity and good conscience; the only way of applying that rule in this case is to ascertain what portion of the mortgage debt can fairly be apportioned upon the one field, and to allow the respondents to redeem the field on paying that amount. The amount so apportion able has been ascertained by the trial judge. If the respondents are allowed to redeem the whole nine fields, the account should be taken only to the date when the appellant went into possession.

[Reference was also made to Kuray Mal v. Puran Mal (( 1879) I.L.R. 2 A. 565.); Gajadhar v. Mul Chand (( 1888) I.L.R. 10 A. 520.); Ragnunath Prasad v. Jamna Prasad (( 1906) I.L.R. 29 A. 233.); and Ghose on Mortgages, vol. ii., p. 764.]

The respondents did not appear.

June 8. The judgment of their Lordships was delivered by

VISCOUNT HALDANE. The relevant facts in this case can be briefly stated. In 1893 the owner of sixteen fields in Berar mortgaged them to the appellant. In 1896 the mortgagor conveyed one of these fields to the respondents. In 1899 the appellant brought a suit against the original mortgagor alone to enforce the mortgage, and obtained a decree by consent. Under this decree (which was afterwards made absolute) in default of payment within a definite time, nine of the mortgaged fields, including that conveyed to the respondents, were to be foreclosed and to be handed over in possession to the appellant. The respondents not having been made parties to the suit were not affected by it. The appellant went into possession. He kept no accounts. The officiating Judicial Commissioner in the Central Provinces, Berar Jurisdiction, has decided that the respondents as owners of an interest in the equity of redemption as it originally stood, an interest which although only fractional remains undisturbed, are entitled to redeem the mortgage on the footing of paying the balance left of the mortgage debt after debiting the mortgagee with a fair occupation rent during the period of his possession, and crediting him with simple interest on the debt due to him under the mortgage deed. If the respondents have the right to redeem the entirety, their Lordships think that this direction as to the form of account was right. The only question that arises is whether they are entitled to redeem the whole of the nine fields, or only the field conveyed to them subject to the mortgage over the whole. According to English law the respondents would have been entitled to redeem the mortgage in its entirety, subject only to the safeguarding of the equal title to redeem of any other person who had a right of redemption, a point which has not arisen so far in the present case. The respondents, being transferees of part of the security, by English law, if it applied, would on the one hand be entitled to redeem the entire mortgage on the properties generally, and correlatively could not compel the mortgagee to allow them to redeem their part by itself. This would be so as the result of principle unless something had happened which extin guished the mortgage in whole or in part, such as an exercise of a power of sale originally conferred on the mortgagee by his security, or such conduct on the part of the transferees as would estop them from asserting what normally would have been their right. Nothing of this kind is alleged in the case before their Lordships.

The judge in the original Court thought that the decisions of the Courts in India had established that one of several mortgagors cannot redeem more than his share unless the owners of the other shares consent or do not object. Subject to proper safeguarding of the rights to redeem, which those owners may possess, their Lordships are of opinion that this is not so in India any more than in England. The decisions referred to when scrutinized turn out to be based not on any general principle different from that adverted to, but on the special circumstances of the transactions to which they related, circumstances which have nothing analogous to them in the facts now under review.

It need only be added on this point that the right to redeem in the present case is not affected, as was suggested, by the concluding part of s. 60 of the Transfer of Property Act, 1882, which is as follows " Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except where a mortgagee, or, if there are more mortgagees than one, all such mortagees, has or have acquired, in whole or in part, the share of a mortgagor." This did not apply to Berar at the time the foreclosure decree was made in 1900, and moreover, if it had applied, it would have done no more than declare applicable what is just the law as established in England. Their Lordships agree with the view taken by the officiating Judicial Commissioner on Appeal, and they see no reason to alter the decree which he has made.

They will humbly advise His Majesty that this appeal should be dismissed.