Shaikh Mohamad Hanif vs Moorat Mahton and Another

The suit out of which this appeal arises was instituted on the 22nd September 1910. The plaintiff is the proprietor of Mouza Chak Amanulla and on the 14th March 1896 he executed a document, which is called a zarpeshgi ijara, in favour of defendant No. 1 and Jitan Mahton, husband of defendant No. 1. The interest of Jitan Mahton has been transferred to defendant No. 3. The zarpeshgi ijara stipulated among other things that an annual sum of Rs. 35-10-8 was payable to the plaintiff by the defendants or their predecessors and the present suit is brought for the years 1311 to F.S. 1317 in respect of this sum of R3. 35-10-8 with interest. The trial Court and the Court of first appeal found that the defendants'' contention that the plaintiff was not competent to recover more than the amount due for three years was not sustainable. The defendants also contended that in July 1896, that is, about three months after the zarpeshgi ijara, the plaintiff borrowed by three simple bonds a total sum of Rs. 300 from defendant No. 1 and Jitan Mahton and that it was stipulated in these bonds that the interest payable thereon, namely, a sum of Rs. 18 per year should be credited towards the payment of the money due to the plaintiff upon the zarpeshgi ijara. It is necessary to observe that the period of the zarpeshgi ijara and of the three bonds was five years. The zarpeshgi ijara also stipulated that in the event of failure to pay the sum of Rs. 700, which was the loan taken by the plaintiff on that transaction, the defendants should be competent to retain the land till the re-payment of the zarpeshgi money. It also stipulated that the annual consolidated jama of the property transferred to the possession of the defendants by the zarpeshgi ijara was estimated at Rs. 112-8-0, and that out of this amount the sum of Rs. 42 should be retained by the defendants as interest upon the zarpeshgi money, that a sum of Rs. 23-2-8 should be paid on account of, revenue, road and dak cess, and a sum of Rs. 11-9-8 on account of irrigation charges, leaving a, balance of Rs. 35-10-8 payable on account of haqajri to the plaintiff. On appeal to this Court Mr. Justice Roe held that the relationship created by the zarpeshgi ijara was not one of mortgagor and mortgagee but of landlord and tenant and that under the Bengal Tenancy Act the plaintiff was not entitled to recover more than three years'' rent. The plaintiff had a cross-appeal before the learned Judge as to the deduction of the yearly interest of Rs. 18. He contended that the defendants were not entitled to make any deduction for the years in suit, but the learned Judge of this Court was against the plaintiff on this point with the result that he gave the plaintiff a decree for three years only for the principal sum of Rs. 17-10-8 per year.

This matter now comes before us in Letters Patent Appeal and the first question that has been argued is, what is the relationship created by the zarpeshgi ijara. Now it is impossible to lay down any general rule as to the effect of a zarpeshgi transaction. Every case must depend upon its own facts, and in this particular case we must determine upon a construction of the document whether or not we can accept the contention of the defendants that a relationship of landlord and tenant subject to the provisions of the Bengal Tenancy Act was created. On a careful examination of the terms of the document it seems to be clear that the intention of the parties was to create the relationship of mortgagor and mortgagee and that this is not a case in which the amount advanced to the owner of the land is to be viewed as an advance of the rent fixed upon the land. In Nidha Sah v. Murli Dhar 25 A. 115 : 30 I.A. 51 : 5 Bom. L.R. 111 : 7 C.W.N. 289 : 8 P.C.J. 435 (P.C.) their Lordships had before them the case of a plaintiff, who in consideration of advances which had been made to him by the defendant executed what purported to be a mortgage of certain villages with possession to the defendant for 14 years, the deed providing that on "the expiration of the term the mortgagor shall come into possession of the mortgaged villages without settlement of account, that on the expiration of the term the mortgagee shall have no power whatever in respect of the said estate which, after the expiration of the term of the mortgage-deed, shall be returned to the mortgagor without his paying the mortgage money secured under this document." In regard to this document their Lordships observed as follows:

The instrument, though it is called a mortgage, and though it will be convenient to follow the nomenclature used in the document itself and in the pleadings and judgments in the Courts below, is not a mortgage in any proper sense of the word. It is not a security for the payment of any money or for the performance of any engagement. No accounts were to be rendered or required. There was no provision for redemption expressed or implied. It was simply a grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances.

That case is a very different case from that before us here. Here there is a distinct provision for interest upon the sum advanced and we see no difference between the nature of this document and that which was before their Lordships of the Privy Council in the Bengal Indigo Co. v. Roghoubur Dass 24 C. 272 : 1 C.W.N. 83 : 23 I.A. 158 : 7 P.C.J. 94 : 12 Ind. Dec. 848 and where their Lordships observed that the real question was whether the main object of the instrument was to provide security for the loan. The same principle was followed in Ram Khelawan Roy v. Sambhoo Roy 2 C.W.N. 758. In that case a sum of one rupee per year was reserved as rent to be paid to the debtor and the creditor was to remain in possession until the payment of the zarpeshgi money. Their Lordships held that the proper intention to be inferred from the document was that the land was hypothecated for a term of years as security for the payment of the loan. Upon a consideration of all the facts in this case and the document itself, it is impossible to say that the contention of the plaintiff is not correct and that the intention of the parties was not to create the relationship of mortgagor and mortgagee but that of simple landlord and tenant. The document being a registered instrument the amount payable to the plaintiff will be governed by Article 116 of the Limitation Act, the period of which is 6 years from the date on which the cause of action accrued and not 3 years as provided in the schedule attached to the Bengal Tenancy Act.

The next question is whether the defendants are entitled to credit the sum of Rs. 18 per year for the years in suit. Now the Courts below have proceeded on the assumption that the stipulation in the three bonds of 1896 was that the defendants were entitled to pay themselves the sum of Rs. 18 per year so long as the zarpeshgi ijara remained in force. The bonds themselves do not appear to make any such stipulation and if anything is to be inferred from the conduct of the parties, all that appears to be established is that up to the year 1801 the plaintiff gave a receipt to the defendants acknowledging payment of Rs. 17-10-8 per year and allowing the defendants credit for the sum of Rs. 18, The learned Vakil for the plaintiff-appellant before us has admitted in the course of the argument that he continued to allow the defendants to make this deduction up to the year 1903. This being so, the defendants would be under the operation of Section 20, Sub-clause (1), of the Indian Limitation Act entitled to sue upon their bonds for three years after the last payment of Rs. 18, and if they were entitled to sue it follows that they would also be entitled to credit themselves with the sum of Rs. 18 by way of interest up to that period. Therefore, the defendants are entitled to credit for the sum of Rs. 18 and interest thereupon up to the end of the year 1906. That means that for the year 1311 the defendants will be entitled to Rs. 18 and interest which amounts roughly to Rs. 6-4-0, for 1312 they will be entitled to the same sum and interest amounting to Rs. 5-3-8 and for 1313 they will be entitled to the same sum with interest which amounts to Rs. 4-3. The total of these sums will have to be deducted from the total claim of Rs. 293-10-2 and for the balance the plaintiff will be entitled to a decree with interest at 6 per cent. from the date of the institution of the suit till the date of realisation. The result, therefore, is that the appeal will be decreed in this modified manner and the plaintiff will be entitled to his costs in all Courts below calculated proportionately to his success. The defendants will be entitled to their proportionate costs. We make no declaration here as to what proportion of the principal sums is to be paid by defendant No. 3 and also as to what proportion of the costs is to be paid by or realised by him.