Mohanlal and another vs Prithvi Raj and others

Nigam, J.C.

Mohanlal and Bhanwarlal sued Sm. Jethi and two others for possession of a shop in suit and Rs. 21/- as mesne profits. The facts alleged are that defendant 1 is the owner of the shop property and she executed a usufructuary mortgage in favour of the plaintiffs on 21-8-1947 and promised to put the plaintiffs in possession. Defendant 1 approached the next day for possession and at that time defendants 2 and 3 also agreed to deliver possession within two or three days. But thereafter, they failed to deliver possession to the plaintiffs.

The suit was contested, defendant 2 claiming that he was entitled to remain in possession as he was in possession as a mortgagee since Sambat 1998 and that defendant 3 was a tenant on his behalf. The learned 2nd Additional Subordinate Judge decreed the suit. In appeal the learned Senior Subordinate Judge held that defendant 2 was entitled to the benefit of S. 53A, Transfer of Property Act, and was not liable to dispossession. The plaintiffs'' suit was dismissed with costs. Now the plaintiffs have come up in second appeal. I have heard the learned counsel for the parties.

The first contention of the learned counsel for the appellants is that defendant 2 was not entitled to the benefit of S. 53A. In Sambat 1993, the husband of defendant 1 put defendant 2 in possession of the property so that he may realize the rent from Mangilal tenant and appropriate it towards the debt due to him. The mortgage-deed in favour of defendant 2 was executed on Asadh Sudi 8 Sambat 1998 and since then defendant 2 is in possession as mortgagee. He paid Rs. 300/- in cash to the mortgagor and appropriated the balance of Rs. 150/- in satisfaction of the debt due to him. On Sawan Sudi 6, Sambat 1998, defendant 2 also got rent-note Ex. 13 executed by Mangilal in his favour. The question for my determination is whether the conditions mentioned in second clause of S. 53A have been satisfied or not.

The learned trial Judge was of opinion that these conditions were satisfied. He further held that the plaintiffs had no notice of the contract or of the part performance thereof. Before the learned Senior Subordinate Judge the fact of payment of the consideration of the mortgage and the execution of the rent-note Ex. 13 do not appear to have been challenged. These facts have not been challenged before me either. It is, however, contended that these acts do not satisfy the provisions of second clause of S. 53A, Transfer of Property Act.

This is a case in which the mortgagee has continued in possession and I do not think his allegation that he had continued in possession in part performance of his contract can be seriously challenged. It remains to be seen whether the mortgagee has done some act in furtherance of the contract or not. It is contended before me that the payment of the consideration is sufficient to justify the conclusion that the mortgagee has done an act in furtherance of the contract. On the other hand, it is urged that payment of the price or part thereof cannot be relied upon as an act of part performance either because payment of money is an equivocal act or because mere payment of money does not change the relative position of the parties though it may give rise to a claim to recover it back. I have been referred to - ''Ma Thet v. Ma Se Mai'', AIR 1934 Rang 304 (A). In this case the purchaser was already in possession as mortgagee and had paid the further amount due under the sale-deed. It was held:

But it is contended on behalf of the appellant that payment of the purchase money is not an act of part performance of the contract on the grounds that payment of money is an equivocal act and that a mere payment of money does not change the relative position of the parties though it may give rise to a claim to recover it. The decisions of the English Courts on which the contention is based refer, of course, to (sic) part performance of an agreement to sell (sic) the purchaser is not already in possession of the property sold, and, in my opinion, they have no reference to a case such as that which is now before me, where the purchaser is already in possession of the property as mortgagee and then continues in possession after the agreement to sell has been concluded. In such a case, the payment of part of the purchase money in addition to the amount already due on the mortgage, in respect of which the purchaser is already in possession, is an unequivocal act which cannot be referred to any other matter than the agreement for sale, and, as such, therefore, is sufficient to satisfy the requirement of S. 53A, Transfer of Property Act that some act must be done in furtherance of the contract.

I have also been referred to - ''Gopinath Sarma v. Hangsanath Sarma'', AIR 1950 Ass 129 (B). There was some difference of opinion between the Hon''ble Judges. Thadani C.J. held:

Assuming in this case that the plaintiff was already in possession, and that he continued in possession in part performance of the contract, the question arises whether he did some act in furtherance of the contract.........But the payment of Rs. 80/- was the consideration for the contract, and cannot unequivocally be regarded as an act in furtherance of the contract. An act which can be regarded as having been done in furtherance of the contract must consist of something more than mere payment of the consideration.

Ram Labhaya J. expressed a different opinion. In para 16 he stated:

I regret I am unable to agree to the proposition that even where a transferee is in possession of the property in part performance of the contract, the payment of the consideration cannot be regarded as an act in furtherance of the contract. I do not find any warrant for that proposition in the language of the statute, nor has any authority been cited in its support.......But where transferee has taken possession the only act that he may be in a position to perform in many cases would be the payment of consideration.

If I may say so, I respectfully agree with the view taken by the Rangoon High Court and by Ram Labhaya J. In many cases the only act open to the mortgagee or the vendee may be the payment of the price particularly if he is already in possession since before the contract in suit. It may not be in every case that it is possible for the mortgagee or the vendee to make substantial alterations in the building. The payment of the money is made in furtherance of the contract and there is no reason why it should not be treated as an, act in furtherance of the contract. No ruling has been cited before me to indicate that such a payment made by a mortgagee who was already in possession or even by a vendee, who was already in possession will not amount to an act in furtherance of the contract. I, therefore, hold that the payment of Rs. 300/- was an act in furtherance of the contract and defendant 2 was, therefore, entitled to the benefit of S. 53A.

There is, however, another act that was performed by defendant 2. He got rent note Ex. 13 executed. AIR 1944 212 (Oudh) lays down:

Where the vendee, who has been already residing in the house purchased along with her husband, issues an order of extensive repairs and lets out parts of the house to the tenants she purports to do acts which indicate that she had taken possession as owner, and as the taking of possession can be referred only to the contract for sale, it must be regarded as being in pursuance of it.

In the present case, the execution of Ex. 13 in which defendant 2 asserted his right to lease out property could have been only in assertion of his rights in pursuance of the mortgage relied upon. I am, therefore, of opinion that the requirements of second clause of S. 53A were fully satisfied.

The second question for my determination is whether the plaintiffs who are the transferee for consideration had no notice of the contract or of the part performance thereof. The learned Senior Subordinate Judge has recorded a finding of fact that the plaintiffs had, notice of the contract and the part performance thereof. This finding, being one of fact, is binding on this Court. It is, therefore, not necessary for me to consider whether the burden of proving notice was on defendant 2 or whether the plaintiffs were required under the law to prove it.

No other point has been pressed before me.

I, therefore, see no force in this second appeal and dismiss it with costs.