Anandi Ram and Others vs Dur Najaf Ali Begum

Sir John Edge, Kt., C.J. and Brodhurst, J.—The suit out of which this appeal has arisen was one in which the plaintiffs sought a decree for sale against certain shares in a village under the following circumstances. The plaintiffs were mortgagees of the shares in question. The mortgage was a simple mortgage, so far as the principal was concerned, and a usufructuary mortgage so far as the interest on the principal moneys lent was concerned. The plaintiffs, whilst they were in possession as usufructuary mortgagees, paid certain arrears of the Government revenue due in respect of those shares. It may be taken that those payments were made to protect the mortgaged property from sale under s. 166, of Act XIX of 1873. If those arrears had not been discharged and the property had been sold under s. 166, s. 167 would have applied, for the purchaser would have taken the property free from any incumbrance, except those, if any, specified in clauses A and B of that section. After those payments were made, the defendant, who is the representative of the mortgagors, paid into Court, under s. 83 of the Transfer of Property Act, Rs. 25,000, which was the amount which had been advanced under the mortgage. Upon that the plaintiffs presented a petition saying that they would take out the Rs. 25,000 in satisfaction of the mortgage, and they would in future claim the money paid in respect of arrears of the revenue. They also deposited in Court the mortgage-deed and obtained the payment out to them of the Rs. 25,000. The first Court decreed the claim to some extent. The District Judge of Bareilly dismissed the claim altogether. "We should mention that it was provided in the mortgage-deed as follows.--"At the time of the settlement, whatever reduction or enhancement may happen in the Government revenue, we mortgagors take upon us." The arrears of the revenue which were paid by the plaintiffs represent an enhancement within the meaning of that clause in the mortgage-deed. Mr. Durga Charan, who has argued this case very fully and with much ability, has contended that his clients, the plaintiffs-appellants here, upon payment of those arrears of the revenue, obtained a charge in equity upon the property, and a charge which was quite independent of the mortgage which they had held; further, a charge in enforcement of which they are entitled to a decree for a sale of the property, notwithstanding their having abandoned their lien under the mortgage. He has cited to us a great number of authorities, most of which are referred to in the case of Mozaffer Hosain Shaha and Others, Hujjatulla Shaha and Others and Kamaruddin Shaha and Others Vs. Kinu Ram Das, Those authorities which he has cited to us which do not appear to be referred to specifically in that case are the cases of Salig Ram and Others Vs. Lachman Singh and Others, Achut Ramchandra Pai v. Sari Kamti I.L.R., 11 Bom., 313; Girdhar Lal and Others Vs. Bhola Nath and Others, Parsotam Das v. Jaijit Singh Weekly Notes, 1890, p. 90; Nikka Mal and Others Vs. Sulaiman Sheikh Gardner, There is no doubt that, with the exception of the case of Kristo Mohinee Dossee and Others Vs. Kaliprosono Ghose and Others, and the case of Mozaffer Hosain Shaha and Others, Hujjatulla Shaha and Others and Kamaruddin Shaha and Others Vs. Kinu Ram Das, there seems to have been a consensus of opinion in the High Courts in India that a payment of money under such circumstances as the payment in this case of the arrears of the revenue created a charge in equity in favour of the person paying the money. In the case of Mozaffer Hosain Shaha and Others, Hujjatulla Shaha and Others and Kamaruddin Shaha and Others Vs. Kinu Ram Das, a majority of three Judges in a Court of five held that such a payment did not create a charge. The majority held that where a mortgagee paid money under such circumstances the mortgagee might add it to the amount of his mortgage and thereby extend his, lien. We have no doubt that when money is paid by a mortgagee to protect the mortgaged property from sale for arrears of the Government revenue the mortgagee is entitled to add the amount so paid to the principal money due under his mortgage, and that in such a case the mortgage cannot be redeemed without paying those moneys; and further, that if the mortgagee proceeds to enforce his mortgage by sale of the mortgaged property, he can do so for the amount then due, which would include the amount so paid for arrears of revenue as well as any principal or interest outstanding. We do not think that the cases relied on by Mr. Durga Charan, even if they are good in law, and we do not intend to question them, put the case any higher than this, that a person who made a payment to save the property from sale on execution under circumstances which would make s. 69 of the Indian Contract Act applicable, obtained by such payment a charge in equity on such property. Although we think that it is not necessary to decide in this case whether a mortgagee making such payment Would be entitled to bring a simple money-suit for the money paid, still we may point out that the case of Salig Ram and Others Vs. Lachman Singh and Others, and the case of Parsotam Das v. Jaijit Singh I.L.R., 11 Bom., 31 (sic) are authorities to show that he might maintain such a suit. Those authorities are fortified by the decision of their Lordships of the Privy Council in Nugenderchunder Ghose and Another vs. Sreemutty Kaminee It is true that the latter case turned on the effect of s. 9 of Act I of 1845, but that Act was repealed so far as the Lower Provinces of Bengal were concerned by Act II of 1859, and so far as these provinces are concerned by Act XIX of 1873. Still, the principle of the judgment in that case applies, whether the section to be considered is s. 9 of Act I, of 1845, or s. 69 of the Contract Act. It is not necessary to go further into that matter, because any right which the plaintiffs might have had as a personal remedy against the defendant has been long since barred by limitation. We do not think it necessary to express any opinion as to whether the majority of the Calcutta High Court in the case of Kinu Ram Das v. Mozaffer Hosain Shaha reported in (1) or the minority which represents in that judgment the previous consensus of opinion of the Indian Courts (excepting the case reported in Kristo Mohinee Dossee and Others Vs. Kaliprosono Ghose and Others, and which minority has been followed since in Bombay and Madras, was right. In our opinion, whatever may be the position or right of a person paying money under such circumstances, who is not a mortgagee, the position of a mortgagee making such payments is this: if he makes such payment and wishes to seek a direct remedy against the mortgaged property in respect of them by a suit for sale of that mortgaged property, he must do so in his character and position as mortgagee, for it was in that character and position, and that only, he paid the money. He must, if he desires to bring the property to sale in respect of such payments, add on those payments to the principal money due under the mortgage. In other words, in our opinion, a mortgagee making such payments as mortgagee, does not, by reason of making those payments, obtain a lien independently of that under his mortgage. In this case the plaintiffs have lost their Hen under the mortgage by having abandoned it, by having deposited the mortgage in Court to be handed over to the defendant, by having taken out of the Court the money which the defendant said was due on the mortgage, and by having quitted possession in favour of the mortgagor, the defendant. Having abandoned their lien and rights as mortgagees, it appears to us that the plaintiffs cannot revive them in order to sustain a suit for money which they could have added to the original mortgage-debt, and in respect of which they were entitled to continue in their character as mortgagees and to hold on to the deed of mortgage. S. 83 of the Transfer of Property Act is a section that was passed not only in the interest of mortgagors but in the interest of mortgagees. It was a section by which it was intended that a mortgage might be discharged by the mortgagor without any litigation, and it contemplated a mortgagee taking out of Court in satisfaction of the money due to him the money which had been paid in by the mortgagor, although the mortgage-debt at the time might exceed the money paid in. It provides that the mortgagee "on presenting a petition (verified in manner prescribed by law for the verification of plaints) stating the amount then due on the mortgage and his willingness to accept the moneys deposited in full discharge of such amount and on depositing in the same Court the mortgage-deed," &c. It appears to us immaterial that the plaintiffs here added a paragraph to their petition stating that they reserved their rights in respect of the money paid for arrears of revenue. The result is, we are of opinion that this suit cannot be maintained and we dismiss the appeal with costs.