Raghubar Narayan Chaudhuri vs Mohit Narayan Jha and Others

James, J.—This appeal arises out of a suit for redemption of a usufructuary mortgage executed on 13th February 1882 in respect of an interest in mouza Nooruddinpur, which is deserved by the plaintiff as a permanent tenure.

The property in question consists of the third part of a two-anna share in the mouza, which is burdened, or was burdened at the time of the execution of the mortgage, with liability to payment of malikana to the heirs of rival claimants to settlement whose claims were disallowed at the Permanent Settlement of the mouza. The sum of seven hundred rupees was advanced on the mortgage. The annual profits were stated in the deed to be Rs. 91-15-0 of which Rs. 84 were allotted for interest; Rupees 5-8-0 was payable to Ganga Ram Chowdhury and his cosharers as malikana; while Rs. 2-7-0 as Government revenue was to be paid by the mortgagees. There was a condition that all profits arising from increased income should go to the mortgagees, and the mortgagors would have no concern with them. The plaintiff, who had purchased the equity of redemption, claimed an account in respect of the payment of these annual dues; and it was suggested that on taking the account it would be found that not only had the principal been satisfied, but the mortgagees would be liable to pay about fourteen hundred rupees to the plaintiff. The mortgagees denied their liability to account; but they admitted that malikana had not been paid to Ganga Ram Chowdhury, saying that they themselves were the maliks, and if any body was entitled to malikana they were the persons entitled to it. Their pleadings on this point were expressed indefinitely, because they also made an attempt which, so far as we can see, appears to have been without justification, to make out that the mortgagors-were not entitled to the property which they mortgaged, and that the mortgagees, possessed it as absolute proprietors.

The Subordinate Judge who tried the suit did not permit the defendants to enter into evidence regarding the alleged want of title of their mortgagors, that no evidence was given on this point. Oft the question of the right to malikana. their line of defence placed the mortgagee in a dfficult position, because they could not prove that they themselves were entited to the malikana without admitting, that the right to malikana existed, which) amounted to an admission of the existence of the so called tenure. The Subordinate-Judge found that the mortgagees were not liable to account so that the question of whether they were themselves the persons entitled to malikana, and. of whether they should be deemed to have satisfied the claim to malikana by merely keeping for themselves the sum allotted for the annual payment, did not in his view arise in the case. He decreed the suit, finding that the plaintiff must pay Rs. 700 to mortgagees before he could recover-possession of the mortgaged property.

The plaintiff appealed to the District Judge, who held that as malikana was payable to Ganga Ram Chaudri by the terms of the mortgage, and the malikana, had admittedly not been paid to anybody the plaintiff must be credited with this amount of Rs. 5-8-0 annually towards the redemption of the principal money advanced on the mortgage, from the very inception of the mortgage and he directed, that an account should be taken on this principle with annual rests. In the result it was found on taking the account in this way, that instead of being, liable to pay seven hundred rupees to the mortgagees the mortgagors were entitled to receive a sum of Rs. 3,154.

The mortgagees have come up in second appeal from that decision and an appeal has also been preferred by the mortgagors against the decision of the learned District Judge on other points which will be considered in due course.

The most important question for consideration in these appeals is whether the usufructuary mortgagees are liable to account or whether they are entitled to claim the benefit of the provisions of Section 77, T.P. Act. The mortgage bond specifies a sum of Rs. 91-15-0 as the annual income which the mortgagees may expect to derive from the property; but it is expressly provided that, any income in excess of this shall go to the mortgagees in possession and that the mortgagors will have no concern with it. Mr. Pugh contends on behalf of the appellants that the assignee of the equity of redemption is not concerned to know how the mortgagees applied their annual profits, provided that no additional liability was thereby east upon the mortgagors. Mr. Hasan Imam cites a number of cases Basant Bai v. Kanauji Lal [1879] 2 All.455 Nursingh Narain Singh v. Lukputty Singh [1880] 5 Cal. 333 Jaijit Bai v. Gobind Tiwari [1884] 6 All. 303 and Parasurama Pattar v. Venhatdohalam Pattar [1911] 25 M.L.J. 561 in all of which the usufructuary mortgagees were made to account. In the case of Basant Rai v. Kanauji Lal [1911] 25 M.L.J. 561 the mortgagee undertook by his mortgage bond to pay malikana out of the profits and failed to pay it; but it is to be noted that malikana was payable in that case to the mortgagor. In the case of Jaijit Rai v. Gobind Tiwari [1884] 6 All. 303 the mortgagee failed in his contract to pay Government revenue from the profits, and the assignee of the equity of redemption was compelled to pay in order to save the property. Mr. Pugh does not deny that the mortgagees would be liable to account if by their mortgage deed the malikana had been payable to the mortgagors, or if owing to the default of the mortgagees the mortgagors had themselves been obliged to pay malikana to Ganga Ram Chowdhury; and indeed in all the cases cited by Mr. Hasan Imam the usufructuary mortgagees were required to account because by their omission to fulfil the terms of the mortgage contracts the mortgagors had been made to suffer specific losses; that is to say, the mortgagee had failed to pay to the mortgagor rent or malikana reserved by the mortgage-deed or in other cases the mortgagors had been obliged to make payments which the mortgagees had undertaken to make.

In the present case we are asked to declare the mortgagees liable to account, not because of any default affecting the mortgagors, but on the ground that they have obtained as profit the money which ought under the deed to have been paid to the malikanadars. This case would appear to resemble that of Fakir Muhammad Khan v. Ali Sher Khan [1911] 10 I.C 113 wherein the mortgagee, who was entitled by his mortgage to appropriate in lieu of interest the profits remaining after the payment of rent to the zamindar, had for several years escaped payment of rent. In that case it was held that this fact gave no ground for taking accounts; the mortgagee was entitled to all the profits he could make out of the property, and it happened that ha had managed to add to the profits the rent of several years. "We need not double that the result of the case would have been different if the rent had been payable to the mortgagor, or if the mortgagor had himself been obliged to pay the rent to save the property.

Another case in point is that of Shafi-un-Nissa v. Fazl Bao [1910] 7 A.L.J. 787 wherein it was held that an usufructuary mortgagee is not liable to account unless there is an express stipulation therefor. We are of opinion that the mortgagees'', failure to pay the malikana does not render them liable for acc-count, nor does it necessarily affect the liability of the mortgagors to pay the mortgage money before they can recover possession of the property. The utmost that the mortgagors can be allowed to claim is that they should be indemnified against the contingency that a valid claim for arrears of malikana may be made against them after their recovery of possession. It is not clear who is entitled to malikana or whether anybody is now entitled. It has been suggested in the course of argument that the mortgagees as reversionary heirs of Ganga Ram Chowdhury may have now become enti to the malikana; but this has not been proved. The claim which was made but not proved, in the trial of the case, that the mortgagees are now the malikanadars because they are registered as proprietors, is of doubtful validity, since the malikana was payable to maliks out of possession, not to proprietors in possession; but this is a question on which we cannot give judgment, since it has not been tried out, and the evidence on the record is scanty. There appears to be possibility that some person entitled to malikana may be able to recover 12 years'' arrears from the plaintiff after he has obtained possession of the mortgaged property; and the mortgagees must give him an indemnity against this contingency.

The next ground of appeal taken by Mr. Pugh is that by virtue of an ekrarnama executed on 7th July 1902 by Markanda Narain Chowdhury, one of the mortgagors, renouncing his share in the property mortgaged, the mortgagees have acquired a quarter share in the equity of redemption. Mr. Hasan Imam points out that this ekrarnama does not amount to a conveyance, and that it can only be deemed to be a surrender if the property mortgaged could properly be regarded as leased from the malikanadars, or from any other person who might be regarded as the superior landlord, whose rights-now vest in the mortgagees. It has certainly not been proved that the mortgaged property is of this character and indeed the scanty evidence before us appears to indicate that it is not; but whatever may be the effect of this ekrarnama, it cannot affect the plaintiff''s title to redeem in the present suit, because the defendants took no plea by their written statement that they had acquired a fourth share in the equity of redemption. Indeed the point only appears to have been raised before the learned District Judge after the conclusion of arguments for the appellant.

Mr. Pugh argues further that the amount of Government revenue paid by the mortgagees was in excess of that specified in the mortgage bond; the mortgagees undertook by their bond to pay Rs. 2-7-0, whereas the actual payment which had to be made in respect of this share was Rs. 7-4-0. In support of the allegation that these payments had been made the defendant tendered in evidence some chalans at alate stage of the case; but the Subordinate Judge had discretion to decline to admit the documents at that stage. He exercised his discretion to exclude them and it must be held that these payments have not been proved.

We come now to Appeal No. 753 which has been preferred by the assignee of the equity of redemption. His claims that the account taken on the ground of the -mortgagees'' default in payment of malikana ought to have been taken from an earlier date so that it would have shown a still higher balance in his favour, and that higher interest sought to have been allowed on surplus profits have been disposed of in the discussion of the mortgagees'' liability to account in Appeal No. 610. The same remark applies to the ground taken by the plaintiff-appellant, that the learned District Judge ought to have required the mortgagees to prove that they had paid Rs. 2-7-0 annually as Government revenue or in the alternative to give an account of profits, since it has not been shown that the plaintiff himself or his assignors have had to make this payment; and unless that can be shown, the defendants are not liable to account. It is suggested that the notice sent by the plaintiff in the form of a tender on 5th August 1923 was a tender of the zareshgi money which was sufficient in law; but the learned District Judge rightly held that this was not a valid tender but a contentious notice. It was in fact a notice calling for accounts which the mortgagees were not liable to render.

Another ground of appeal taken by the plaintiff is that the quantity of proprietors'' private land originally mortgaged has been reduced by means of leases granted by the mortgagees. It is sufficient to remark that this question is concluded by the concurrent findings of fact of the Courts below that no zirat land has been settled with tenants by the mortgagees.

The result is that Appeal No. 610 will be decreed, while Appeal No. 753 will be dismissed. The decree of the Subordinate Judge is restored, with these modifications, that the date by which the sum of Rs. 700 is to be paid to. the defendants by the plaintiff, will be fixed as 19th September 1927; and that by 19th August 1927, the mortgagees must execute a bond in the sum of Rs. 110 to the satisfaction of the Subordinate Judge, indemnifying the mortgagor against the possibility of his being madeliable to pay 12 years'' arrears of malikana after recovery of possession, and if this indemnity bond is not duly executed within the period prescribed, the plaintiff will be permitted to redeem on payment of the sum of Rs. 590. The plaintiff Mohit Narain Jha will bear the costs of defendants 1st party in this Court and in the lower appellate Court.

Jwala Prasad, J.

I agree.