Chadalavada Satyanarayana vs Alladi Suryanarayana

Clark, J.—The appellant mortgaged certain property to the respondent''s lather. The mortgage was in simple form but at some time, whether

at the date of the mortgage or subsequently is immaterial, the respondent''s father went into possession of the mortgaged property. Thus the

mortgagee was a mortgagee in possession. The appellant filed a suit for redemption in the Court of the District Munsiff of Kavali and obtained a

preliminary decree on the 6th of October, 1942. The respondent''s father died during the pendency of these proceedings and the respondent was

joined as his legal representative. The preliminary mortgage decree for redemption followed the form prescribed in Order 34, Rule 7, Civil

Procedure Code. The District Munsiff in granting a preliminary decree arrived at a decision as to the amount payable by the mortgagor after

making due allowance for the profits of the mortgaged property received by the respondent''s father or the respondent up to the date of the

preliminary decree. On the 14th of July, 1944, the appellant filed an application for an account to be taken of the profits received by the

respondent after the date of the preliminary decree and before the passing of the final decree. In the meantime the appellant had paid into Court the

amount fixed by the preliminary decree and the respondent had delivered up possession to the appellant. The dates on which payment was made

and possession was given are immaterial. It is sufficient to note that both these acts had been done at the time when the appellant applied for a final

decree. The appellant appears to have described his application as one falling under Rule 7 of Order 34, and it. has been so referred to in both the

Courts below.

This was clearly a mistake as the application must necessarily have been one under Rule 8 of Order 34. The District Munsiff held that as the

preliminary decree gave no direction for the taking of an account in respect of the profits after the date of that decree such an application would not

lie. He held that the appellant would "" have to seek his remedy elsewhere "" and dismissed the application. The appellant appealed to the District

Court of Nellore. The respondent resisted that appeal on two grounds both of which were upheld by the District Judge. The respondent''s first

objection was that no appeal lay. His second was the ground found in his favour by the District Munsiff. The District Judge held that the order

dismissing the appellant''s application was not an order appealable under the provisions of Order 43, Rule 1, and accordingly that no appeal lay.

The learned Judge was clearly in error on this point, and counsel for the respondent before me conceded at an early stage that this decision could

not be supported. As I have observed, the appellant''s application was for a final decree. He has been refused that relief. It is beyond question that

an appeal would lie from a final decree, and it cannot be contended that a similar right will not lie when the relief is refused.

On the respondent''s second point of objection the District Judge agreed with the decision of the District Munsiff that in the absence of any

provision in the preliminary decree for the taking of an account no such account could be ordered.

On second appeal to this Court, the appellant urges that an appeal lay to the District Judge and that he was entitled to an account of the profits

received by the respondent after the date of the preliminary decree and up to the date on which possession was given as a necessary preliminary to

the passing of a final decree. That he is so entitled is well-settled law. A mortgage suit continues until the final decree is passed and the relationship

of a mortgagor and mortgagee continues until then. Accordingly a mortgagee in possession has until the expiry of that period the liabilities imposed

on him by Section 76 of the Transfer of Property Act. It is true that Order 34, Rule 8 does not in terms provide that a mortgagor in a suit for

redemption applying for a final decree is entitled to have an account taken of the profits received by the mortgagee in possession between the date

of the preliminary decree and the date when possession is given; but the provisions of Order 34 read as a whole clearly indicate that such an

account must necessarily be taken. Even if they did not, the right of the mortgagor to such an account is established beyond question by the

provisions of Section 76 of the Transfer of Property Act. Again it is beyond question that when a suit whether for sale or redemption of a mortgage

is filed it is the duty of the Court to decide in that suit all the claims of the mortgagor and mortgagee under the mortgage up to the date when the

final decree is given. Such claims can and indeed must be included in the mortgage suit. If they are not included the person failing to include them is

barred thereafter under the provisions of Order 2, Rule 2, Civil Procedure Code, from filing a suit in respect of them. There are a large number of

cases both in this Court and in the other Indian High Courts in which these propositions are laid down beyond question. Vinayak v. Dattatraya ILR

(1902) 26 Bom. 661, Rukmani Bai v. Venkatesh ILR (1907) 31 Bom. 527, Satyabadi Behara v. Harabati ILR (1907) Cal. 223, Kashi v. Bajrang

Prasad ILR (1907) All. 36, Ram Din v. Bhup Singh ILR (1908) All. 225, Chandulal Vs. Bharat Singh, ., Papla Chakrapani Chettiar v.

Ramaswami Thenkondan 42 Ind.Cas. 230 and Suppan Chettiar Vs. Rangan Chetty and Others, .

When these authorities were referred to, counsel for the respondent conceded that the Courts below were in error in refusing to order an

account to be taken, but he urged that: that the account could be taken only for the period between the date of the preliminary decree and the date

fixed for redemption. I can find no justification for this qualification. On the contrary I am satisfied after a consideration of the authorities to which I

have referred that no such qualification can be justified; the account must necessarily be an account of all profits received by the respondent prior

to the date of the final decree. I think it is more convenient to put it that way than to say up to the date when possession is given; for in some cases

possession may not be given until after the final decree is passed. I refrain from expressing any view whether in such cases the account can

properly take into consideration the profits arising after the date of the final decree as that question does not arise in this case for decision.

Accordingly the District Munsiff must deal with the application for a final decree and take an account of the profits which accrued to the

respondent or his father, as the case may be, between the date of the preliminary decree and the date on which possession was given to the

appellant and the case will be returned to the District Munsiff''s Court for that purposes. In taking that account due regard will be paid to the

provisions of Section 76, particularly Sub-sections (g) and (i) of that section.

The appeal is accordingly allowed and the decisions of the Courts below are both reversed, with costs throughout.

No leave.