Balakrishna Naika and Others vs Mahalinga Bhatta and Others

Raman Nair, J.—This appeal by the mortgagee-defendants against a decree for the redemption of a usufructuary mortgage is confined to the quantum of compensation payable for improvements effected by them. They claimed as much as Rs. 12,000 on this account, but the court below awarded them only Rs. 3087-12-0, and in appeal they asked for Rs. 1652-10, more. It is sufficient to state only such of the facts as are necessary for considering the objections taken. Ext. B1, the mortgage in question was of the date 15-11-1932. Although the mortgage was a usufructuary mortgage the mortgagors continued in possession under a contemporaneous lease-back, Ext. B17. Subsequently the mortgagee filed a suit in ejectment, and in execution of the decree therein, took possession of the properties from the mortgagors on 14-7-1940. (Thereafter he transferred his rights to the present mortgagees). The court below disallowed the mortgagees'' claim to compensation in respect of all improvements effected before 14-7-1940 on the patently proper ground that they were improvements effected by the mortgagors and not by the mortgagees. It is nevertheless argued before us that the mortgagors were in possession, not as owners of the property, but as tenants under the mortgagee and that their improvements during the tenancy stand on no different footing from improvements effected by a stranger tenant under a mortgagee in which latter case there can be no doubt that the mortgagee would be entitled to claim compensation from the mortgagor irrespective of whether or not he had, in his turn, paid compensation to his tenant. We are unable to agree. The claim for compensation in this case is founded on the express terms of Ext. B1 and not under the customary law (not that the customary law would countenance the argument advanced) and what Ext. B1 says is that the mortgagee would be entitled to compensation for improvements effected by him. This must be read along with the lease-back under which the mortgagors remained in possession so that there could be no question of the mortgagee effecting any improvements until the determination of the lease, and the clause entitling the mortgagee to compensation can only be read as meaning compensation for improvements effected by him after obtaining actual possession and as excluding improvements effected by the mortgagors who remained in possession though in a different character. It could never have been the intention of the parties that, at the time of redemption, the mortgagors should pay for improvements effected by themselves, and driven to its logical conclusion the argument advanced on behalf of the appellants would mean that, even if the mortgagors had continued in possession under the lease right up to the time of redemption, they would nevertheless be liable to pay compensation for the improvements they themselves had effected. It is not the case that the mortgagee effected any improvements while the mortgagors were in possession, and that the parties themselves did not think that the mortgagees could put forward such a claim as is now put forward on their behalf is apparent from the circumstance that no compensation was offered to the mortgagor-tenants or demanded by them when the mortgagee took possession on determination of the lease. The court below was perfectly right in denying compensation to the mortgagees for improvements effected before 14-7-1940.

The next objection taken is that the arriving at the rate of compensation payable for areca and other trees, the court below relied upon Ext. A8, the report of a commission appointed, not in the present suit, but in a prior proceeding between the parties u/s 19 of the Madras Act IV of 1938 and to which report the mortgagees had even then objected on the ground that the rates were too low. Generally speaking the rates in Ext. A8 are lower than the rates allowed in Ext. B13 and Ext. B14 the reports of the commissioner appointed in the present suit, and generally speaking the lower court followed a middle course and adopted rates more or less mid-way between the two. It is said, and quite rightly, that Ext. A8 is not evidence in the present case, the commissioner who submitted that report not having been examined as a witness. But we find that Ext. A8 was marked by consent and there being no question of proof of the document (Ext. A8 being a certified copy of the original report), it is to be presumed that this marking by consent meant that both parties agreed that the report may be treated as evidence in the present case. Ext. A8 was prepared in January 1951. The present suit was instituted in April 1951, three months later, and Ext. A8 is near enough to the suit to be of value if it can be used as evidence. This apart, the commissioner appointed in the present suit has given no data whatsoever for the rates adopted by him. They are more or less arbitrary, and in the absence of definite data or evidence, one way or the other, we think that the trial court was entitled to adopt the rates which it considered reasonable.

The commissioner estimated the age of certain areca trees and pepper vine as over 10 years - see paragraphs 8, 10 and 14 of the judgment of the lower court, though what are described as areca trees in paragraph 10 are really pepper vine. It is argued that since the mortgagees are admittedly entitled to the improvements effected after 14-7-1940, and since the commissioner''s report was in February 1952 only trees more than 11� years old should have been excluded. But obviously the commissioner''s estimate of the age could only have been approximate, and there is nothing to show which among the trees mentioned in his report were between 10 and 11� years old. The burden being on the mortgagees to establish their claim for compensation, we think that the lower court was right in excluding all these trees in assessing it.

It is next said that the lower court erred in disallowing compensation for one item of reclamation. That relates to the leveling of a hill side and the planting of areca trees thereon, but the trees standing on this portion of the garden are between 10 and 22 years old and it is therefore obvious that the reclamation could not have been effected by the mortgagees.

Another item of claim is on account of a tank in a plot called Korungumulai. This stands on much the same footing. There is no estimate by the commissioner as to the age of the tank. Even at the time of the mortgage the plot in which the tank lies was an area garden which needed irrigation, and the 1st defendant has admitted in his evidence that there was a hollow there in which water used to collect. The commissioner''s report shows that the tank is the only source of irrigation for this plot, and his assessment of its value is only Rs. 61-8-0. It is clear that the so-called tank is nothing more than the hollow which already existing on the land.

The next objection relates to the disallowance of compensation on account of a kattapuni or embankment shown as item C (e) in the commissioner''s report. The commissioner''s report does not give even the approximate age of this kattapuni, and there is no evidence to show by whom it was constructed. It is not possible to identify it with the revetment which the 1st defendant in his evidence claimed that he had done to both sides of a channel running through the middle of the areca garden. That can scarcely be described as a kattapuni. The claim was therefore rightly disallowed.

This exhausts the objections taken before us on behalf of the appellants.

The mortgagor-respondents have filed a memorandum of cross-objection asking for the reduction of the decree amount by Rs. 846. Their main objection is to the addition to the mortgage money of certain amounts paid on their behalf by the mortgagee appellants in the following circumstances : There was a prior charge on the mortgaged property in respect of some maintenance payable by the mortgagors to third parties and Ext. B1 shows that the mortgagors not merely undertook to pay the maintenance regularly but also executed a security bond in favor of the mortgagee in order to indemnify him in case, on account of their failure, he was compelled to pay. For three years the mortgagors failed to make the payment and therefore, as the receipts Exts. B3 to B5 and the evidence of the 1st defendant show, the 1st defendant had to make the payments totaling Rs. 309 in all. The lower court added this amount with interest thereon at 5� per cent to the mortgage money and it is to this that objection is taken. It is not disputed that the mortgagees did make the payments which were charged on the property and which the mortgagors were bound to make, but what is contended is that the mortgagees should resort to separate proceedings to enforce the liability and cannot be allowed to recover the money as part of the mortgage amount. It is said that section 61 of the Transfer of Property Act is a bar, but it seems to us that that section has no application whatsoever. Although the lower court has not referred to the provision of law under which it allowed this amount to be added to the mortgage money it is clear from the discussion in paragraph 24 of its judgment where it says that the defendants were obliged to pay the maintenance amount to save the property, that it had section 72 of the Transfer of Property Act in mind. As against this it is argued that the proviso to that section has not been satisfied in that the mortgagees have neither alleged nor proved that before they paid the amount they called upon the mortgagors to do so : No such point was taken at the trial and the question being one of fact we cannot allow it to be taken now. It seems to us clear that section 72 of the Transfer of Property Act enables the mortgagees to recover the amount in question as part of the mortgage money.

We might here mention that one of the items of objection in the appeal is that the lower court awarded interest only at 5� per cent per annum on the maintenance amount paid by the mortgagees instead of the 9 per cent allowed under the maintenance deed. Whatever might be the rights of the maintenance holder, so far as the mortgagees are concerned they cannot be allowed to recover interest at more than 5� per cent from the mortgagors who are agriculturists.

The remaining items of cross-objection relate to matters which were not disputed in the lower court, and nothing has been urged before us in respect of them. In the result we dismiss both the appeal and the memorandum of cross-objections both with costs.