Sripat Singh and Others vs Naresh Chandra Bose and Others

Das, J.—[After stating facts as set out above his Lordship proceeded]. Various contentions were raised by the defendants in their written statement and they have all been dealt with by the learned Subordinate Judge. As between the plaintiff and Sripat Singh and Jagatpat Singh, the main questions appear to have been, first, whether the plaintiff''s suit was barred by limitation; secondly, whether there was legal necessity for the loan, and thirdly, whether the plaintiff was entitled to interest exceeding the principal sum advanced. The question as to whether the mortgage bond was genuine seems also to have been raised in the Court below. That question has been answered by the learned Subordinate Judge in favour of the plaintiff and Mr. Manuk appearing on behalf of defendants, Sripat Singh and Jagatpat Singh, very properly accepts the decision of the learned Subordinate Judge on this point.

In regard to the question of limitation, Mr. Manuk contended that the mortgage in suit was not an English mortgage; but it seems to us that it is unnecessary for us to express any opinion on this point since upon the finding of the Court below there can be no doubt that the suit is not carried by limitation. There were varitus payments from time to time made by the mortgagor and the question in the Court below was whether these payments were genuine payments or whether the books of the Official Receiver were not forged in order to save the suit. All these payments were made by the Official Receiver and the cash book of the Official Receiver undoubtedly supports the case of the plaintiff. The last payment was made on 8th July 1910 and the payment before that was made on 28th February 1900. It was contended in the Court below that the entries made in the cash book of the Official Receiver were not genuine. Mr. Manuk has inspected the books of the Official Receiver and has very properly admitted those payments. He concedes that the suit is not barred by limitation and I do not propose to discuss the question any further in regard to the question of legal necessity. Mr. Manuk confined his arguments to the question of interest claimed in the suit. The interest claimed is 10 per cent. per annum with six monthly rest. In my opinion the interest claimed is very moderate and there is no reason to take the view that the interest is excessive.

In regard to the last question raised, the argument is founded upon the rule of damdupat. The Calcutta High Court has uniformly held and we agree with those decisions that the rule of damdupat is not applicable to the muffasil. It is quite true that the mortgage bound was executed in Calcutta, but the bond comprised properties which are in the muffasil and I am of opinion that we cannot apply the rule of damdupat in a case heard in Purnea.

The question as between the plaintiff and Jamehar Kumari is as to who is entitled to priority in respect of the mortgaged properties. Jamehar Kumari is the widow of one of the mortgagors; but she took an assignment of the rights of the decree-holder in Suit No. 253 of 1889 in her favour. The extreme contention advanced on her behalf is that she is entitled to priority over the plaintiff''s mortgage in respect both of Perganna Sripur and of the Cotton Street property. She contends that so far as the Cotton Street property is concerned, she purchased it at the Registrar''s sale free from all encumbrance and that she is entitled to retain it and to repel the attack made on it by the plaintiff in this litigation. In regard to Perganna Sripur she contends that the utmost that can be said in favour of the plaintiff is that he is entitled to redeem her. The extreme contention on behalf of the plaintiff is that he is entitled to propriety over the interest of Jamehar Kumari, first, because the money advanced by his father saved the property from loss or destruction; and, secondly, because Jamehar Kumari is the benamidar of Chatrapat Singh. In regard to the last contention it is to be pointed out that the plaintiff did not suggest any case of benami in his plaint. Indeed he alleged in the p. 5 of the plaint that his father released No. 147, Cotton Street, Calcutta from all claim in respect of his mortgage and the plaint as originally filed certainly suggested that the plaintiff did not seek to enforce the mortgage by the sale of the Cotton Street property. This is a question in which the plaintiff is not really interested; for it appears that Parganna Sripur is sufficient to meet his claim. But Brindaban Chandra Dutt, who has a second mortgage of Perganna Sripur is vitally interested in this question; and he undoubtedly alleged a case of benami in his written statement. Brindaban Chandra Dutt contended that Jamehar Kumari was a benamidar for her husband who was then alive, that Hari Charan Bose did not release the Cotton Street property from all claim in respect of his mortgage and that he was entitled to have the debt of the plaintiff satisfied out of the Cotton Street property which was not mortgaged to him so far as such property would extend.

Now clearly the plaintiff is entitled to priority in respect of Perganna Sripur. It is not disputed that Government revenue to the extent of Rs. 16,000 in respect of Perganna Sripur was payable on 28th March 1895 and that the Receiver had no funds in his hands out of which he could have paid the Government revenue. Perganna Sripur was therefore in imminent danger of being sold for non-payment of arrears of Government revenue. In these circumstances the Calcutta High Court passed an order with the consent both of the plaintiff and Chatrapat Singh that the Receiver should raise a loan to pay the Government revenue. The material portion of the order of the Calcutta High Court runs as follows:

And it is further ordered with the like consent that the said Receiver be at liberty upon such terms and conditions as to rate of interest or otherwise as he may deem necessary to raise a sufficient sum by mortgage of the said properties comprised in the mortgage to the plaintiff for the purpose of paying the Government revenue payable in respect of the said zamindari Parganna Lot Sripur on the twenty eighth day of March instant and that such mortgage be executed and registered by the said Receiver for and on behalf of the defendant and such mortgage to have priority over the existing mortgage of the said zamindari Parganna Lot Sripur.

In pursuance of this order the Receiver borrowed Rs. 17,000 from the plaintiff''s father on the security of both the properties and there is conclusive evidence that with the money so raised he paid the Government revenue and saved the zamindari property from destruction. The evidence is also conclusive that the Receiver spent the entirety of the money so raised in paying Government revenue and in meeting certain incidental expenses.

In my opinion the plaintiff is entitled to what the Court gave him, namely, a first charge on parganna Sripur. An advance was made by the plaintiff in order to save parganna Sripur from loss or destruction; and on principles which are well recognized in our Courts the advance so made is payable in priority to all other charges of earlier date. In my opinion the decision of the learned Subordinate Judge on this point is right and must be affirmed.

The next question is with reference to the Calcutta property. Mr. Manuk, appearing on behalf of Jamehar Kumari, strongly contends that the Calcutta property is not within the scope of the suit and that the learned Subordinate Judge should not have given any direction with reference to it. As I have pointed out, the plaintiff undoubtedly said in the plaint that his father released the Calcutta property from all claim in respect of his mortgage. He instituted the suit in Purnea and Mr. Manuk relies upon the allegation in the 11th para. of the plaint which runs as follows:

The property in suit being situated in zillah Purnea, thanas Bahadurganj and Kasba and district Purena within the local limits of the jurisdiction of this Court the cause of action arose in thanas Bahadurganj and Kasba on the 26th March 1896.

I have no doubt whatever that at the time when the plaintiff instituted the suit he was under the impression that he had no claim to put forward with reference to the Cotton Street property; but he specifically asked that in default of payment by the defendants "the said mortgaged premises or a sufficient part thereof be sold under the direction of this Court." He filed the original mortgage bond with his plaint which showed that "the said mortgaged premises" consisted of the zamindari property and the Calcutta property.

Now as I have said the plaintiff is not so much interested in this question as Brindaban Chandra Dutt is; and Brindaban denied that the plaintiff''s father released the Calcutta property from all claim in respect of his mortgage. Thereupon the plaintiff inquired into the matter and on 17th December 1909 he applied for amendment of the plaint. In his petition he stated that on inquiries made by him he had ascertained "that as a matter of fact the late Hari Charan Bose did not execute any release in the year 1910, or in any other year and the allegation relating thereto in the said para. 5 is a mistake." He asked for amendment of the plaint first by striking out from para. 5 the words of which exception was taken by Brindaban Chandra Dutt and by adding the following statement in the plaint, namely, "that your petitioner has been informed and believes that the said Premises No. 147, Cotton Street, Calcutta, was sold by the Registrar of the Calcutta High Court free from all encumbrances on the 10th day of April 1897 under an order of the said High Court made in the said Suit No. 253 of 1899 and dated the 5th day of April 1897, and defendant 4, Srimati Jamehar Kumari, was declared the highest bidder and purchaser for Rs. 50,000."

I am unable to agree with the contention of Mr. Manuk that the Calcutta property was not within the scope of the suit. I quite agree that the plaintiff when he filed the plaint did not think that he had any claim to put forward in respect of the Calcutta property but he undoubtedly asked the Court to pass a decree for the sale of "the said mortgaged premises" if there was default of payment by the defendants within the time allowed by the Court, and he showed that "the said mortgaged premises" included the Calcutta property. He was undoubtedly labouring under a mistake when he said that his father had released the Calcutta property from all claim in respect of his mortgage; but he corrected his mistake and there is no reason to take the view that the Court is not entitled to give him such relief as he may be entitled to in regard to the Calcutta property.

The next question is as to what relief the plaintiff is entitled to in regard to the Calcutta property. Jamehar contends that she has purchased the property free from all encumbrances and that she is entitled to hold it free from the encumbrance created in favour of the plaintiff. Mr. Manuk points out on her behalf that the mortgage in favour of the plaintiff''s father was executed on the 11th May 1895, that is to say, four years after the final decree was passed in suit No. 253 of 1889 and his extreme contention is that he is entitled to have what the Court gave him, namely, the property free from all encumbrance. It was faintly suggested by Mr. Manuk that the mortgage in favour of the plaintiff''s father was affected by the rule of lis pendens; but in this Mr. Manuk is clearly wrong as the mortgage in favour of plaintiff''s father was made under the order of the Court in Suit No. 253 of 1889. The case clearly comes within the exception recognized in Section 52 of the Transfer of Property Act.

The plaintiff, or to be more accurate, Brindaban Chandra Dutt, supports his case on two ground: first, on the ground that the mortgage in favour of the plaintiff''s father was made pursuant to the order of the Court; and, secondly on the ground that Jamehar Kumari was a benamidar for her husband Chatrapat Singh. So far as the first point is concerned, it is clearly without substance. The Calcutta property was not in any danger at all; and the money lent by the plaintiff''s father did not save that property from loss or destruction. In the second place, the order of the High Court gave the priority to the plaintiff''s mortgage over the bond of the 10th May 1884 in respect Parganna Sripur only. The Court clearly recognized that it would be unfair to give the plaintiff''s bond priority over the bond of 1884 in respect of the Calcutta property. In my opinion the first contention advanced on behalf of the plaintiff fails and must be overruled.

I now come to the question of benami which has been specifically raised by Brindaban Chandra Dutt in his written statement. The learned Subordinate Judge decided this issue against Jamehar Kumari; but, with all respect, I am unable to agree with his decision on this point. Jamehar Kumari is the ostensible purchaser of the property. An ostensible purchaser must be assumed to be the real purchaser until the contrary is shown. The onus is accordingly on the plaintiff to establish that the property was purchased by Chatrapat Singh in the name of his wife Jamehar Kumari.

Now what is the evidence on which the Subordinate Judge relies in support of his finding as to benami? In the first place, he refers to certain Judgments and decree made in suits to which Jamehar was a party, but to which neither the plaintiff nor Brindaban was a party.

The facts in connexion with that suit, Suit No. 496 of 1910, are as follows: One Askaran Baid obtained a decree against Chatrapat Singh, and in execution of that decree he attached No. 147 Cotton Street, as belonging to Chatrapat. Jamehar Kumari thereupon laid a claim to that property and the claim was disallowed. Thereupon she instituted a suit which was suit No. 496 of 1910 in the Original Side of the Calcutta High Court for a declaration that she was the absolute owner of the property and that the same might be released from the attachment effected at the instance of Askaran Baid. The Court of first instance dismissed her suit basing its decision on various judgments and decrees which were not inter partes. The case went up in appeal and Sir Lawrence Jenkins, giving the decision of the appeal Court, approached the case from the only stand point from which it could be approached, namely, whether Jamehar Kumari had clearly established that she was the real purchaser, ''having regard to the fact that the claim case had been decided against her. In the course of his judgment, Sir Lawrence Jenkins said as follows: "I recognize that the value of this opinion, namely, the opinion of the learned Judge in the Court of first instance, is in some measure discounted by the fact that it was in part based on the view expressed in earlier litigation a class of evidence that was used by the learned Judge to an extent that the law does not permit. But apart from this evidence, there are circumstances which clearly call for explanation and the onus in this case is on Jamehar to show affirmatively that not only the ostensible but the real title also is in her. She is a plaintiff who is calling in question in a suit contemplated by the Code (Order 21, Rule 63), an adverse decision of the Court given, it is true, in a summary proceeding but conclusive, subject to the result of this suit. This is a suit therefore to alter or set aside a summary decision or order of the Court, and it is method of obtaining review. The plaintiff in the circumstances of this case cannot discharge the burden of proof cast on her by merely pointing to the innocent appearance of the instruments under which she claims. She must show that they are as good as they look." It is obvious that the decision in the earlier litigation upon which the learned Subordinate Judge has relied was based on the question of the onus of proof, it being held by the Court of appeal that Jamehar Kumari failed to establish that she was not only the ostensible but the real owner of the property.

In my opinion the judgment in that suit is inadmissible in evidence against Jamehar. In the present case the onus is clearly upon the plaintiff to prove that the apparent title is not the real title, and, in my opinion, the question must be decided on the evidence recorded in this case, not on the evidence which was recorded in Suit No. 496 of 1910. This being the position what evidence has the plaintiff adduced to prove that Jamehar is the benamidar of her husband? The learned Subordinate Judge says as follows: "Besides the judgment and decree we have also got evidence proving that Chatrapat used to hold each year a meeting of his own caste people in No. 140, Cotton Street, that Chatrapat had also recently mortgaged the house No. 147, Cotton Street, to one Bhagwan Das." The only evidence on the point is that of Ahir Chand Barman who was examined on behalf of the defendants. It is to be noted that the plaintiff has adduced no evidence on this point at all apart from tendering in evidence the plaint filed by Jamehar Kumari in Suit No. 496 of 1910 and the judgments and decrees of the Calcutta High Court in that suit. Ahir Chand says in his evidence that the property belonged to Jamehar Kumari who made a gift of it to her two sons by a deed of gift in 1918. In cross-examination he admits that Chatrapat mortgaged No. 147, Cotton Street, to Bhagwan Das and that there was a suit on that mortgage in the Calcutta High Court. He also admits as follows: "On the invitation of Chatrapat a meeting of panchaiti of the Jamas used to be held in Calcutta in Katik and Fagoon each year and always during Chatrapat''s lifetime and that punchaiti sometimes used to be held in 147, Cotton Street, and also (then adds) sometimes in the house of Kesho Das Sital Chand Chowdhury." This is all the evidence on the question of benami. In my opinion this is wholly insufficient; and the learned Subordinate Judge should have decided this issue in favour of Jamehar Kumari. I admit that the case is suspicious, but suspicion cannot be regarded as a substitute for legal proof.

That being so, the plaintiff cannot claim priority in respect of the Cotton Street property. Jamehar Kumari, on the other hand, contends that the plaintiff has no claim to put forward in regard to the Calcutta property as she has purchased it free from all encumbrances. In my opinion, the contention of Jamehar Kumari on this point must be overruled. The plaintiff was not added as a party to the suit and his right to redeem could not be extinguished except by adding him as a party to the suit. Jamehar as the purchaser of the property represents the interest both of the mortgagor and the mortgagee. Now both the mortgagor and the mortgagee were consenting parties to the order of 22nd March 1395 which gave the Receiver liberty to raise money by a mortgage of the properties which were the subject-matter of the suit. Neither the mortgagor nor the mortgagee could be heard to say that there was nothing to redeem since the final decree was passed so far back as 19th January 1891. The security created in favour of the plaintiff was the result of the consent order of 22nd March 1895, and in my opinion, the position of the plaintiff in regard to the Cotton Street property must be that of a puisne mortgagee who was not added as a party to a mortgage action by the first mortgagee against the mortgagor. In my opinion, the plaintiff is entitled to redeem and to sell the Calcutta property free from all encumbrances or to put up for sale his right of redemption which is undoubtedly property and is capable of being sold.

But then arises the important question as to the terms upon which redemption should take place should the plaintiff elect to sell, not his equity of redemption in regard to the Cotton Street property, but the property itself. Mr. Hasan Imam contends that, as Bibi Jamehar Kumari purchased the Cotton Street property for Rs. 50,000 we should direct that upon payment by the plaintiff to Bibi Jamehar Kumari of the sum of Rs. 50,000 he would be regarded as the holder of the first charge on the Cotton Street property with power to realize it in the usual way, I am unable to agree with this contention. The right which a puisne mortgagee, who was not joined as a party to the suit of the prior mortgagee, has, is what he could have claimed if he had been a party to the suit, namely, a right to redeem the prior mortgage with a view to enforcing his own mortgage. In order to determine the rights of the parties we must place them in the position which they occupied before the Cotton Street property was put up for sale, and it is obvious that we cannot allow redemption on the terms suggested by Mr. Hasan Imam. Mr. Susil Madhab Mullick appearing on behalf of Jamehar Kumari, on the other hand, contends that an account should be taken of what is due to Jamehar Kumari on the footing of the mortgage of the 10th May 1884 and that redemption can only take place in terms of the plaintiff paying to Jamehar Kumari what may be found due to her on the taking of such accounts. Now the position of the parties with regard to the mortgages may be re-stated. Although the mortgage in which Jamehar Kumari is interested as assignee is prior in date to that of the plaintiff, priority in respect of the Sripur property was given to the plaintiff by an order of the Court to which all the parties consented. The result is that though prior in date, Jamehar Kumari is a subsequent incumbrancer in respect of the Sripur property by her own act or the act of her assignor. In regard to the Cotton Street property, Jamehar Kumari is clearly the prior encumbrancer. This being the position Jamehar Kumari tells the plaintiff as follows "Although I have no objection to your realizing your security by the sale of the Sripur property only I must insist on my security being valued as a whole if you claim the right to redeem my prior mortgage in regard to the Cotton Street property." Now the general rule is that a mortgage being one and indivisible security for the debt and every part of it, the mortgagor cannot redeem piecemeal, unless the integrity of the mortgage has been broken up by the act of the mortgagee. Now this rule will operate so as to prevent the mortgagor from claiming the right to redeem any particular property which may be included in the mortgage security or the purchasers of fragments of the equity of redemption from claiming the right to redeem the fragments in which they may be interested, and the rule is firmly established, that save as a matter of special arrangement and bargain entered into between all the persons interested, neither the mortgagor nor the mortgagee nor persons acquiring through either partial interest in the subject, can under the mortgage, get relief, except in consonance with the principle of indivisibility already referred to.

But the question is not of the plaintiff acquiring a partial interest in the subject and claiming the right to redeem that interest. He has got a mortgage of both the properties, and, though subsequent in point of time, his interest is that of a prior mortgagee in regard to Sripur. Now if the general rule applies, the position of the plaintiff must be substantially that of a subsequent incumbrancer both in-regard to Sripur and the Cotton Street property. Jamehar Kumari says: "My security must be valued as a whole and redemption can only take place on terms of your paying me the whole of the mortgage debt due to me." Plaintiff replies: "If you compel me to adopt that position, you are virtually depriving me of my priority in regard to Sripur." In my opinion, having regard to the consent order of the 22nd March 1895, each of the parties, namely, Jamehar Kumari and the plaintiff must be deemed to hare given up the right to claim the integrity of the mortgage security as against the other. By an arrangement between the parties, the plaintiff is the holder of the equity of redemption in regard to the Cotton Street property, and Jamehar Kumari is the holder of the equity of redemption in regard to Sripur and, in my opinion, the equity between the parties cannot be worked out except by holding that there was an arrangement between them whereby the interest of each of the parties as representing the equity of redemption was separated and defined. It is well established that, where this is so, the rule as to the indivisibility becomes inapplicable. In my opinion the plaintiff is entitled to redeem the prior mortgage of Jamehar Kumari by paying a proportionate amount of the mortgage debt due on the Cotton Street property, and Jamehar Kumari is entitled to redeem the prior mortgage of the plaintiff by paying a proportionate amount of the mortgage debt due on Sripur, and the value of the properties must be taken to be that at the date of the mortgage transaction in question. It is obvious that if either claims the right to redeem, an enquiry as to the value of the properties at the date of the transaction must be undertaken by the Court and the mortgage debt must be properly apportioned having regard to the result of the enquiry. As Jamehar Kumari has been in possession of the Cotton Street property for some time she will not be credited with interest from the date she took possession of the property which may be taken to be 5th March 1898.

The only other question is whether Brindaban Chandra Dutt is entitled to have the debt due to the plaintiff satisfied out of the Cotton Street property so far as such property will extend. He relies upon Section 81, T.P. Act, but clearly he is not entitled to the benefit of the section since he had notice of the mortgage in favour of the plaintiff''s father. He advanced money with his eyes open and with fall knowledge of all necessary facts: and it is impossible for him now to claim the benefit of Section 81 of the Act. He has asked for a decree in this suit, and I think he is clearly entitled to have the accounts taken on the footing of his mortgage and to a decree giving him the right to proceed against the surplus sale-proceeds of Sripur. There being no question of marshalling in this case, the plaintiff is entitled to elect against which of the two properties he should first proceed. If he elects to put up Sripur to sale and if there should be a surplus after satisfying his entire claim, Brindaban Chandra Dutt will be entitled to proceed against the surplus for the realization of the debt due to him. Neither the plaintiff nor Brinbaban Chandra Dutt is entitled to a personal decree against those who represent the interest of the mortgagors, and to this extent the decree of the lower Court must be set aside.

The decree passed by the Court below must be varied by providing as follows: (1) Let the following accounts be taken: (a) an account of what will be due to the plaintiff for principal and interest on the mortgage of 11th May 1895 and for his costs of the suit on the day nest hereinafter referred to;

(b) an account of what will be due to Brindaban Chandra Dutt for principal and interest on the mortgage of 26th May 1896 and for his costs of the suit on the day next hereinafter referred to;

(c) an account of what will be due to Bibi Jamehar Kumari for principal on the mortgage of 10th May 1884 and interest from the date of the mortgage to 5th March 1898;

(2) that if the defendant Bridaban Chandra Dutt pays into the Court the amount due to the plaintiff six months from the date hereof, the plaintiff shall assign his mortgage to him and that in default thereof, he shall be debarred all right to redeem the property, provided that he will be entitled to proceed against the surplus sale proceeds, if any, of parganna Sripur hereinafter expressly provided;

(3) that in case of such foreclosure and if the defendant Bibi Jamehar Kumari pays into Court the proportionate share of the amount so due to the plaintiff in respect of parganna Sripur six months from the date hereof, the plaintiff shall assign his mortgage to her, and that, in default thereof shall be debarred all right to redeem the property;

(4) that in case of such foreclosure, and if the defendants Sripat Singh and Jagatpat Singh pay into Court the amount so due to the plaintiff six months from the date hereof, the plaintiff shall deliver up to the defendants Sripat Singh and Jagatpat Singh or to such person as they appoint all documents in his possession or power relating to the mortgaged property and shall, if so required, re-transfer the property to the said Defendants free from the mortgage and all encumbrances created by the plaintiff or any person claiming under him, but that, in default of such payment, and if the plaintiff pays to Bibi Jamehar Kumari the proportionate share of the amount due to Bibi Jamehar Kumari in respect of the Cotton Street property six months from the date hereof, the mortgaged property or a sufficient portion thereof be sold, and that the proceeds of the sale after defraying there out the expenses of the sale be paid into Court;

(5) that the sale-proceeds be applied in payment of what is declared due to the plaintiff as aforesaid, together with subsequent interest and subsequent costs and that the surplus sale-proceeds of the Sripur parganna (if any) be applied in payment of what is declared due to the defendant Brindaban Chandra Dutt as aforesaid together with subsequent interest and subsequent costs, and that the balance (if any) be paid to the defendants Sripat Singh and Jagatpat Singh;

(6) that should the plaintiff fail to pay Bibi Jamehar Kumari as provided in the fourth clause hereof, Parganna Sripur as mortgaged to the plaintiff be sold and that the proceeds of the sale after defraying thereout the costs and expanses of the sale be paid into Court and applied in the manner provided in the preceding clause hereof. And this Court doth remit case to the Court below for the taking of the necessary accounts and for determination of: (1) what is the proportionate share of the mortgage debt due to the plaintiff in respect of parganna Sripur; and (2) what is the proportionate share of the mortgage debt due to Bibi Jamehar Kumari in respect of the Cotton Street property.

Adami, J.

I agree.