Kartar Singh vs Udai Ram

J.V. Gupta, C.J.

This is defendants''s second appeal against whom the suit for redemption has been decreed by both the Courts below.

The admitted facts of the case are that the plaintiff Udai Ram, is the owner of the house in dispute, which he mortgaged with defendant Kartar Singh on December 22, 1970 for a consideration of Rs. 2,000/. It was a usufructuary mortgage. No rate of interest was stipulated separately. The plaintiff, however, got the mortgaged house on rent from the defendant on a monthly rent of Rs. 40/ after the mortgage and continued in its possession. The plaintiff filed the suit for possession by redemption of the mortgaged house. He pleaded that he had made payment at the rate of Rs. 40/ per month on account of rent from December 22, 1970 to February, 1974 and at the rate of Rs. 80/ per month from March 1974 to May, 1977 to the defendant and thus he had made payment of Rs. 4,560/ in all. According to plaintiff, the defendant was at the most entitled to claim interest at the rate of 71/2 per cent per annum on the mortgage amount in view of the provisions of the Usurious Loans Act, 1918 (hereinafter called ''the Act'') as amended by the Punjab Relief of Indebtedness Act, 1934. The amount due to interest according to the plaintiff upto the date of the institution of the suit came to Rs. 1,000/. It was thus alleged that the defendant was at the most entitled to recover Rs. 2,000/ as principal and Rs. 1,000/ as interest from the plaintiff, but he actually recovered Rs. 4,560/ i.e. more than what was due to him. On these allegations it was prayed that the decree for possession by redemption of the property, in dispute, be passed without any further payment and the extra amount recovered by the defendant be refunded. He pleaded that the plaintiff got the rent upto December, 1975, at the fate of Rs. 50/ per month and for the subsequent period he did not make any payment on account of rent. He, however, pleaded that the plaintiff did pay Rs. 40/ per month as interest on another loan of Rs. 2,000/ borrowed by him vide pronote and receipt dated February 10, 1974. He thus denied having received Rs. 4,560/ from the plaintiff. He also denied that he was entitled to claim interest at the rent of 71/2 per cent per annum only or that the amount received by him as rent was liable to be adjusted against the principal mortgage amount or interest on it. The trial Court held that the plaintiff had made payment of Rs. 3,240/ to the defendant after the date of the mortgage; Rs. 40/ were however paid by the plaintiff on account of interest and only Rs. 3,200/ were paid by him as rent of the mortgaged property the plaintiff was not entitled to the benefit of the Act in the suit for redemption; the defendant was entitled to claim Rs. 2,450/ on account of rent from the plaintiff for the period from December 22, 1970 to December, 1975 and adjust this amount against the receipt of Rs. 3,200/ by him and that the plaintiff had made excess payment of Rs. 800/ which was liable to be adjusted against the principal. Thus, the suit was decreed on payment of Rs. 1,200/. Dissatisfied with the same, both the parties filed two separate appeals. The learned Additional District Judge took the view that the defendant had realised more by way of interest and, therefore, he was liable to refund interest amount of Rs. 448/. He thus modified the decree of the trial Court and ordered redemption without payment of any amount and rather passed a decree for the recovery of Rs. 448/ in favour of the plaintiff. Dissatisfied with the same, the defendant has filed the second appeal in this Court.

The learned counsel for the defendantappellant submitted that according to the terms of the mortgage deed, the rent and interest were equal and the property was to be redeemed on payment of Rs. 2,000/ as the mortgage money. Thus, argued the learned counsel, in view of the provisions of Section 62 of the Transfer of Property Act, the plaintiff was entitled to redeem the property on payment of Rs. 2,000/.

After hearing the learned counsel for the parties, I find merit in this appeal.

Section 62 of the Transfer of Property Act, reads as under :

"Right of usufructuary mortgagor to recover possession. In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property together with the mortgagedeed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee

(a) where the mortgagee is authorised to pay himself the mortgage money from the rents and profits of the property when such money is paid;

(b) where the mortgagee as authorised to pay himself from such rents and profits or any part thereof a part only of the mortgagemoney, when the term, if any, prescribed for the payment of the mortgagemoney has expired and the mortgagor pays or tenders to the mortgagee the mortgagemoney or the balance thereof or deposits it in Court as hereinafter provided."

Admittedly, it was a usufractuary mortgage and the mortgagor had the right to recover possession of the property on payment of the mortgage amount. According to the terms of it the mortgage deed, rent and interest were equal and that being so, the question of excess payment of rent by way of interest as such did not arise. The approach of the Court below in this behalf was wholly wrong and misconceived. As regards the other loan advanced subsequently by the defendant, the same could not be made the subjectmatter of the present suit. It is a clear case where the plaintiff is entitled to redeem the suit property on payment of the mortgage amount of Rs. 2,000/ under Section 62 of the Transfer of Property Act.

Consequently, this appeal succeeds. The judgments and decrees of the Courts below are set aside. The plaintiff''s suit is decreed on payment of Rs. 2,000/ as the mortgage money which should be paid within six months from the date of the decree of this Court failing which the suit shall stand dismissed.