Nachiappan and Others vs P.R. Muthiah Ambalam and Others

This appeal by the plaintiff''s is directed only against the denial of mesne profits for part of the period for which they were claimed. The following

facts are not in dispute. The plaintiff''s purchased the equity of redemption from the mortgagors. In O. P. 39 of 1948, under S. 83 of the Transfer

of Property Act, they made the deposit of the mortgage amount of Rs. 630 on 12-8-1948. Presumably, on the refusal of the mortgagee to receive

the amount, that petition was dismissed on 12-11-1948. But the mortgage amount continued to be in deposit in court. Thereafter, in 1949, they

filed a suit for redemption. A preliminary decree was passed therein in 1951. Subsequent thereto, the plaintiffs deposited the mortgage amount to

the credit of the suit on 25-3-1952. The final disposal of that redemption. The final disposal of that redemption suit was only in 1958, for, against

the preliminary decree, there was an appeal and a further appeal which resulted in a remand, after which it was disposed of. The plaintiff''s

obtained possession of the property on 17-7-1958. In the suit itself, the mesne profits for fasli 1358 had been given. The plaintiff''s filed an

interlocutory application under Or. XX, Rule 12 and Or. XXXIV, Rule 7 C. P. C. for ascertainment of the mesne profits for faslis 1359 to 1367.

The learned District Munsif held that the plaintiff''s would be entitled to mesne profits earlier than the date on which they deposited the mortgage

amount in pursuance of the preliminary decree, which deposit was on 25-3-1952. Mesne profits were accordingly granted only for faslis 1362 to

1367. On the quantum of mesne profits, the learned District Munsif found that the plaintiff''s were entitled to a total amount of Rs. 1500 for the

period in question.

(2) Against this decision, appeals were taken by both sides. The plea of the plaintiff''s that they were entitled to mesne profits for the earlier faslis

were again negatived. On the quantum, in respect of which the defendants had also appealed the learned Subordinate Judge held that a total

amount of Rs. 1024 alone would represent the mesne profits for the period in question.

(3) The plaintiff''s appeal and the short question that has been canvassed in this second appeal is that since the plaintiff''s as the petitioners in the

proceedings under S. 83 of the Transfer of Property Act had made the deposit on 12-8-1948, they would be entitled to mesne profits from that

date. The question then is, are they entitled to mesne profits from 1948, when they made the deposit in those proceedings, or only from 1952,

when they made the deposit in pursuance of the preliminary decree? On behalf of the defendants, a memorandum of cross objections has also

been filed objecting to the quantum of mesne profits awarded by the lower appellate court. Equally, the appellants object to the reduction of the

quantum of mesne profits by the lower appellate court.

(4) On the question of the quantum, there is no substance in the appeal or the cross appeal. The lower appellate court has examined the evidence

with regard to the yield and ascertained the figure. This is purely a question of fact. It has not been shown that in arriving at this figure any relevant

features have been omitted to be considered.

(5) It has to be mentioned that though the plaintiff''''s petition under S. 83 of the Transfer of Property Act was dismissed on 12-11-1948, they

allowed the amount to continue in deposit in those proceedings till 1952.

On the filing of the suit in 1949, they did not make a deposit, that is to say, tender the amount in the suit proceedings. After the passing of the

preliminary decree, they withdrew the amount from the deposit in the earlier proceedings on 16-1-1952 and made a deposit in pursuance of the

preliminary decree in the suit on 25-3-1952. The question is whether the mere fact that the plaintiff''s allowed the amount to continue in deposit in

the earlier proceedings, though those proceedings ended according to law, should be taken in favour of the plaintiff''s contention that by reason of

that deposit, the plaintiff''s would be entitled to mesne profits.

(6) Under S. 60 of the Transfer of Property Act, the mortgagor has the right to tender the mortgage money at any time after the principal money

has become due and require the mortgagee to deliver to the mortgagor the relevant documents, and where the mortgagee is in possession of the

mortagaged property, to deliver possession of the property to the mortgagor. This is the right of a mortgagor to redeem. Such a right could

therefore be exercised without resort to a court of law. Under S. 83, before a suit for redemption is barred, the mortgagor may deposit into court

at any time after the principal money has become due and seek the assistance of the court as specified in that section. The court thereupon issues a

notice of the deposit to be served on the mortgagee, and the mortgagee may, on expressing his willingness to accept the money in full discharge

and on deposit of documents relating to the property, apply for and receive the money. If the mortgagee is in possession of the property, before

the amount is paid to the mortgagee, the court shall direct him to deliver possession of the property to the mortgagor. It is recognised that such a

deposit operates as a tender. Under S. 84, where such a tender has been made, interest on the principal money shall cease to run from the date of

tender or the date of deposit, provided that the mortgagor has done all that has to be done in order to enable the mortgagee to take the amount out

of court. The proviso to this section states that if the mortgagor subsequently withdraws the money or any part thereof, the interest on the principal

money shall be payable from the date of such withdrawal. Even apart from the deposit of the amount under S. 83 of the Act, operating as a tender,

the depositing of the money into court on the filing of a suit for redemption has equally that effect. When once the mortgagor in a suit for

redemption deposits the mortgage amount into court during the trial of the suit, whether before or after the passing of the decree for redemption,

the principle that the mortgagee would not be entitled to interest on the principal amount is the natural corollary of the above provisions of the

Transfer of Property Act. What however is the position when on a valid deposit having been made under S. 83 of the Act, the proceedings do not

draw to the normal termination, but the petition is dismissed? It may be that on the dismissal of a proceeding under s. 83, the mere fact that the

money deposited continues to remain with the court would not give that amount the character of the mortgage amount. On the termination of these

proceedings, it is clear that the mortgagee would not be in a position to draw that amount from court. The amount is only available to the

mortgagor, the depositor, and he could withdraw it at any time. Where the mortgagee has refused to accept the mortgage amount in these

proceedings, the only alternative which the mortgagor has is to institute an action for redemption and if he wishes to secure that interest on the

principal amount shall no longer be payable, it is for the mortgagor to see that a valid deposit is made in the redemption proceedings. It is the

contention of Mr. A. Sundaram Aiyar for the respondent that whatever may be the result if the mortgagor had allowed the amount to remain in

deposit, when once he has chosen to withdraw the amount, interest will cease to run only from the date of the deposit made in pursuance of the

preliminary decree in the mortgage suit.

(7) Mr. K. S. Desikan, learned counsel for the plaintiff-appellants, does not deny that after the dismissal of the S. 83 proceeding on the refusal of

the mortgagee to receive it, that amount in deposit could not be said to be available for payment to the mortgagee. It is true that the plaintiffs-

appellants filed a suit in 1949, but it was not till 1952 that they made the deposit of the mortgagee amount. While S. 84 refers to the interest upon

the mortgagee amount, it is obvious that in the case of a mortgage with possession, interest is equated to the mesne profits derivable from the

property. Mr. Dasikan has referred to Velayudha Naicker v. Hyder Hussain Khan Sahib, ILR Mad 100. In this case it was held that while interest

ceases to run on the principal amount from the date of the tender, it is not necessary that the mortgagor should, after such tender, always keep the

money ready for payment. That was a case of a tender under S. 60. The money when tendered was refused by the mortgagee. The lower court

disallowed interest from the date of the tender. The learned Judges held that S. 84 was mandatory and the word ""tender"" therein did not imply that

the mortgagor must always keep the money ready for payment. In Krishnaswami Chettiar v. Ramaswami Chettiar, ILR Mad 44, the mortgage

amount deposited by the mortgagor under S. 83 of the Transfer of Property Act, had been withdrawn by the mortgagor on the mortgagee''s refusal

to accept it. It was decided herein that the continuance of the deposit is necessary to justify the claim to the cessation of interest. The learned

Judges observe :

But why should the mortgagor, who has taken back the money and possibly made use of it or derived some other benefit from it, be entitled to the

cessation of interest from the date of the original deposit ? S. 84 appears to us to presuppose the continuance of the deposit to justify the claim to

the cessation of interest. In the case of tender, continued readiness to pay has been held necessary for the cessation of interest.

The learned Judges referred to the earlier decision in ILR Mad 100, but made no comments thereon. In Ramabhadra Thevar and Others Vs.

Arunachalam Pillai and Another, , a Full Bench of this court had to consider the effect of the withdrawal of the mortgage amount by the mortgagor.

The Full Bench decided that a deposit in court under S. 83 is only a special kind of tender designed to make available a sure mode of proof to the

mortgagor of the fact that he has made a tender. If he tenders in the ordinary way, and tender is denied, he may be defeated by false evidence. If

he tenders in the ordinary way, and tender is denied, he may be defeated by false evidence. If he tenders by deposit in court, the matter is proved

for him by record. The learned Judges did not agree with the view adopted in ILR Mad 44. They proceeded--

The only question properly arising was whether the mortgagor, notwithstanding his withdrawal, remained ready and willing to pay throughout. The

better opinion seems to be that the fact of the tender raises the presumption that the debtor continued ready and willing to pay and that the burden

is cast upon the creditor to show that he was either not willing or not able to pay, because he had utilised the moneys for other purposes, and it

may be that the fact of withdrawal might, in certain circumstances, in itself be some evidence of unwillingness to pay.

It is necessary however to mention that all of these decisions were before the amendment of S. 84 of the Transfer of Property Act.

(8) In the Full Bench decision referred to the view of Phillips J, in Thevaraya Reddi v. Venkatachala Pandithan, ILR Mad 804 : AIR 1918 Mad

1360 was also not accepted. The view taken by Phillips J, in that case was that when once the money is deposited and a reasonable time is given

to the mortgagee to take the amount, interest thereafter cannot be allowed in any circumstances. The Full Bench in its observation in the above

extract obviously intended to lay it down that once there is proof that the debtor continued to be ready and willing to pay, then, normally, interest

should be denied to the mortgagee, unless, of course, there was proof to the contrary that the debtor was unwilling to pay. If the debtor had made

a deposit and that continued to be in deposit, it would appear from the above decision that readiness of the debtor to pay would find support from

his conduct.

(9) Mr. A. Sundaram Aiyar, learned counsel for the respondents, contends that on the dismissal of the petition under s. 83 of the Act, the money

deposited by the mortgagors could no longer be withdrawn by the mortgagee even if he were to change his mind and after his initial refusal agreed

to be paid that amount. It is vaguely suggested that on the dismissal of the application the court becomes functus officio and cannot validly make

any order with regard to that amount. A decision of the Patna High Court lends some support to this argument. It is reported in Mt. Ratna Koer

Vs. Mt. Nanhaki and Others, . There a deposit had been made under S. 83 by the mortgagor which was refused by the mortgagees. The court

made an order that the mortgagor was entitled to withdraw the money. Subsequently thereto, it appears that the mortgagees moved the court and

prayed that the money might not be paid over to the mortgagor, as there was a criminal case pending against the mortgagor in connection with an

alleged theft of the mortgage deed. Upon this, the Subordinate Judge directed the with-holding of the payment to the mortgagor. That criminal case

ended in the acquittal of the mortgagor and later on the mortgagees purported to have changed their mind and intimated their willingness to accept

the tender. The learned Judges took the view that after the disposal of the case, that is, S. 83 proceedings, when the court made the order ""that the

mortgagor was entitled to withdraw the money on the refusal of the mortgagee to accept it"" there was no other tender and the money was the

mortgagor''s money and the mortgagor was entitled to withdraw it..... Being therefore of opinion that there was no tender outstanding, the order

directing the money to be paid to the mortgagees seems to have been made without jurisdiction....."" With respect, I am unable to agree that the

tender was no longer open. It is true that there was initial unwillingness on the part of the mortgagees to accept the amount. But the fact that the

mortgagor allowed the money to continue in deposit is a sure enough indication of his willingness to pay. That is the effect of the Full Bench

decision in Ramabhadra Thevar and Others Vs. Arunachalam Pillai and Another, . The deposit operated as a continuing tender, and so long as the

court had the custody of the fund and had to dispose of it in one manner or other according to law, the court does not appear to be prevented

from considering the request made by the mortgagee of his willingness to receive the amount the more so when the mortgagor had not rescinded

the tender by withdrawal of the amount. The court can in those circumstances issue a notice to the mortgagor, and if the tender was not withdrawn,

direct the payment of the amount to the mortgagee.

(10) Another decision referred to by Mr. Sundaram Aiyar--Mothiar Mira Taragan v. Ahmatti Ahmed Pillai, ILR Mad 232--does not lend any

considerable support to the arguments of the respondents. There the question arose of the attachability of an amount deposited under S. 83 of the

Transfer of Property Act and a creditor of the mortgagee sought to attach it. What was decided therein was that the money had not become that of

the mortgagee until he had complied with the conditions of the section, conditions precedent to his right to draw the money out of court. In

Dalsingh v. Pittamsingh, ILR All 179, on the refusal of the mortgagees to accept the sum deposited under A. 83 of the Transfer of Property Act,

the mortgagor filed a suit for redemption. A decree for redemption was passed. The money that had been deposited was treated as the sum to be

deposited in pursuance of the decree for redemption. An appeal by the mortgagees failed. Pending further appeal to the High Court, the

mortgagees were allowed by the court to withdraw the money held in deposit under S. 83. It was held in this decision that when once they had

withdrawn the money so kept in deposit, the mortgagees had no further right to proceed with the appeal. Mr. Sundaram Aiyar relies on the

following observations :

The money was not in court to the credit of the suit but was deposited in court in an independent matter. Moreover, the words of the decree to

which we have referred do not amount to a direction that the money shall be paid to the defendants. Such a direction would be inconsistent with

the portion of the decree immediately preceding them, which directs that if the payment of the amount found to be due to the defendants be not

made, etc, the decree shall be considered void. This contemplates the case of the non-payment of the mortgage debt. But further, the language of

the decree is that if the mortgage money is still in deposit in the court, the defendants can get it, that is, the defendants can apply to the court under

the provisions of S. 83 of the Transfer of Property Act and obtain payment..........

The earlier part of the passage extracted above, no doubt, differentiates between the money in deposit in S. 83 proceedings and the money to be

credited to the suit after the preliminary decree had been passed. But, at the same time, the learned Judges point out that notwithstanding the

original disposal of S. 83 proceedings, it would be open to the mortgagees to seek to draw the money on complying with the conditions contained

in that provision.

(11) Mr. Sundaram Iyer contends that on the filing of the suit for redemption it was the duty of the mortgagor to have deposited the amount into

court to the credit of the suit. Haji Abdul Rahman v. Haji Noor Mahomed, ILR 16 Bom 141 has been cited in support. What was held herein was

that a plea of tender before action must be accompanied by payment into court after action; otherwise, the tender is ineffectual. It does not appear

on a perusal of the facts of that case whether any proceeding under S. 83 of the Act had been instituted prior to the filing of the suit for redemption.

What the position would have been if the money had been deposited into court in S. 83 proceedings was not considered in that decision. I do not

understand Mr. Sundaram Iyer to claim that though the mortgage money continued to be in deposit in S. 83 proceedings on the filing of the suit, the

mortgagor should deposit a further amount to the credit of the suit as well. In further support of his argument that the money in deposit in S. 83

proceedings is not available to the mortgagee, reference has been made to some observations of Sadasiva Iyer J, in Sabapathi v. Vanmahalinga,

ILR Mad 959 : AIR 1915 Mad 210 :

Now, the English and Indian cases have established that a mere offer by a registered posted letter to deliver something or rather the expression by

a letter of willingness or readiness to deliver is not a proper offer. As Shepherd J. says in his ""Contract Act"" : ''A sufficient tender of money is not

made if the money is locked up in a box, nor of goods if they are enclosed in a cask which the other party is not allowed to open''. Following that

analogy, a mere offer by posted letter that the third defendant is ready to execute a release and without having a document of release ready to be

delivered, is not a proper offer....."" In the view that I have expressed that the money deposited in court, despite the initial unwillingness of the

mortgagee to receive the amount, was always ready and available to be paid to the mortgagee and that it was open to the mortgagee to move the

court and withdraw the amount after compliance with the conditions, the above observations do not have any application whatsoever. Nor am I

able to find any assistance from Abohala Sastriar v. Kalimuthu Pillai, 75 Mad LW 543 : AIR 1962 Mad 308 . That decision only laid it down that

the mere fact of the deposit of the mortgage amount in S. 83 proceedings has not the effect of extinguishing the mortgage. The learned judge

pointed out that

the deposit does not per se operate to discharge the mortgage and remains the property of the mortgagor until the mortgagee has expressed his

willingness to the court under S. 83 to accept the deposit and deposits the mortgage deed. Unless these conditions are fulfilled, the mere

withdrawal of the deposit under different circumstances by the mortgagee will not operate to discharge the mortgagee, the reason being that the

proceedings under S. 83 would come to an end with the refusal of the mortgagee to accept the deposit.........

Though the facts are not clear, it would appear that the mortgagee withdrew the amount not in the proceedings under S. 83, but in some other

proceedings. There was however no compliance with the conditions laid down in S. 83, and the view was taken by the learned judge that such

withdrawal would not amount to extinguishing the mortgage.

(12) It will be noticed that most of the cases referred to above were prior to the amendment of S. 84. The proviso to S. 84 was enacted by Act

XX of 1929. To my mind, the proviso was only intended to make it clear that the mortgagor should notwithstanding the tender or deposit continue

to be ready and willing to pay the amount. If the amount continued to be in deposit, the section provides that interest on the mortgage money shall

cease to run from the date of the tender or deposit. But, if, after the refusal of the mortgagee to accept the amount, the mortgagor withdrew the

amount, then the section as it stood, did not indicate whether interest on the mortgage amount would continue to run or not. That was made clear

by the proviso which states that if the mortgagor has subsequently withdrawn the amount of deposit or any part thereof, interest on the principal

money shall be payable from the date of such withdrawal. This only emphasises that fact that the withdrawal of the amount would operate as the

withdrawal of the tender itself. Mr. Sundaram Iyer''s contention that the moment the amount is withdrawn interest becomes payable for the entire

period is certainly not supported by the phraseology employed in the proviso.

(13) The facts may once again be stated. The mortgage amount was deposited on 12-8-1948. That was not accepted by the mortgagee. In 1949,

the mortgagors filed the suit for redemption and on the passing of the preliminary decree they deposited the mortgage amount on 25-3-1952. It

appears that in January 1952, they withdrew the deposit that had earlier been made under S. 83 of the Transfer of Property Act, and within two

months thereafter paid that amount as directed by the preliminary decree in the mortgage suit. Virtually, for the entire period except for a break of

two months, the mortgage amount remained in court. One cannot have a better indication of the continued readiness and willingness to pay on the

part of the mortgagors. Both from the general principles enunciated in the decisions referred to and even the proviso to S. 84, I am satisfied that

interest on the principal amount ceased to run from the date of the deposit in S. 83 proceedings.

(14) On behalf of the respondents, a cross-appeal has been filed objecting to the quantum of mesne profits determined. Contending that since the

deposit had been made in 1948, the mortgagees were not entitled to interest and that therefore the mortgagors were enabled to recover mesne

profits, such mesne profits were claimed for faslis 1359 to 1367. Both the courts ignored the deposit and granted mesne profits only for faslis 1362

to 1367, that is, subsequent to the filing of the suit. In the view that I have taken, the mortgagors would be entitled to mesne profits from the date of

the deposit in S. 83 proceedings. In the cross-appeal, the contention advanced on behalf of the mortgagees had been that there has not been a

proper determination of the mesne profits. It is argued that the value of the yield from the properties would vary from year to year. Without much

discussion on the point, the trial court adopted Rs. 1500 as mesne profits for faslis 1362 to 1367. On appeal, the learned Subordinate judge took

the normal yield for faslis 1362 to 1367, to come to a total of 104 kalams of paddy and 8 kalams of ragi. Deducting the expenses of cultivation,

which was estimated at 50 per cent of the gross produce, the quantum of mesne profits was fixed at Rs. 1024 only. It is contended that for at least

one of the years a commissioner had been appointed and the crops were harvested and sold for Rs. 160 and that for another fasli 1366 the entire

crops were destroyed by cyclone. The quantum of mesne profits was generally also claimed to have been made at an excessive figure. I am not

satisfied however that the courts below have erred in appreciating the evidence. It is true that for one year a commissioner had been appointed, but

that alone cannot establish what mesne profits the person in possession obtained from the land. In so far as fasli 1366 is concerned, the claim of the

respondents that the entire crop was destroyed has not been accepted by the courts. It is not a matter which this court can embark upon.

(15) The appeal is accordingly allowed and the cross-appeal is dismissed. In the circumstances, there will be no order as to costs in either the

appeal or cross appeal in this court. The appeal will be remanded to the trial court for determination of the mesne profits for the faslis 1359, 1360

and 1361. The appellant will be entitled to refund of court fee paid on the memorandum of appeal here. Leave granted.

GI/KBK/R.G.D.

(16) Appeal allowed.