R.K Choudhary, J.:— This is an appeal by the defendants against the judgment and the decree of the Additional Subordinate Judge, Sasaram, affirming those of the Additional Munsif, Second Court, there. The suit out of which this appeal arises was instituted by the plaintiffs-respondents for declaration of their title to and recovery of possession over 11.52 acres of land under khata No. 44 of village Dulahi, tauzi No. 2345/3.
2. Plaintiff No. 1 was the proprietor of two annas eight pies interest in this tauzi recorded under khewat No. 1/6 and Bandhubind and others had a holding of 36.32 acres of land with an annual rental of Rs. 399 and odd under this khewat. On 31-8-1920, plaintiff No. 1 gave in rehan the rental of Rs. 126 out of the above rental of Rs. 399 and odd covering an area of 11.52 acres of the aforesaid holding, which is the subject-matter of the suit, to one Sheogopal Singh, the ancestor of defendants 1 to 13, for a sum of Rs. 1400. Subsequently, plaintiff No. 1 himself purchased in an auction sale the remaining area of 24.80 acres of the above holding in execution of a decree for arrears of rent. During the continuance of the rehan, defendants 1 to 13 instituted, a suit for recovery of arrears of rent against Bandhubind and others and obtained a decree in execution of which the rehani area, namely, 11.52 acres was purchased by defendant No. 14.
3. According to the case of the plaintiffs, this purchase was made by defendants 1 to 13 themselves in the benami name of defendant No. 14. Plaintiffs 2 and 3 acquired by purchase from plaintiff No. 1 some shares out of this proprietary interest. Subsequently, the rehan was redeemed, and the plaintiffs came in possession of the above proprietary interest. According to their case, when they went to realise rent from Bandhubind and others, they were informed that the land for which they had come to realise rent had; been purchased by defendants 1 to 13 in execution of their decree for arrears of rent and the same was in their possession.
4. The plaintiffs claimed that the acquisition of the above area by defendants 1 to 13 amounted to an accession to the mortgaged property and they were, therefore, entitled to have possession over the same. Since, however, the defendants did not give up their possession, the plaintiffs instituted a suit for the reliefs as stated above.
5. The suit was contested by defendant No. 14 on the ground that he was the real purchaser and defendants 1 to 13 had no concern with the same and that, at any rate, the suit land could not be an accession to the mortgaged property. Defendants 1 to 3 and 5 appeared and filed written statement supporting the case of defendant No. 14.
6. Both the courts below concurrently held that the suit property was actually purchased by defendants 1 to 13 in the name of defendant No. 14 who was merely their benamidar. They also held that the suit property was an accretion to the mortgaged property and, therefore, the plaintiffs were entitled to recover possession of the same after paying to the mortgagees the cost of acquiring it. The suit was accordingly decreed in favour of the plaintiffs, and, being aggrieved by that decree, the defendants have presented this appeal in this Court.
7. The question raised in this appeal is whether the suit property could, in the circumstances of the case, be held to be an accretion to the mortgaged property and whether the plaintiffs were entitled to a decree for possession over the same. The decisions of this Court on this point are conflicting. This case has, therefore, been referred to a larger Bench and it has now been placed before us for disposal.
8. On the findings as stated above, it is manifest that the auction-purchase was made by defendants 1 to 13, the mortgagees in possession. The finding on this point is a finding of fact and has not been, and could not be, challenged before us. It has now to be seen whether the purchase by the mortgagees in possession would be an accretion to the mortgage or would be the property of the mortgagees.
9. On behalf of the appellants, however, two contentions have been raised, namely, (1) that they having purchased the suit property in execution of a decree for arrears of rent, which had been given to them in rehan, are the owners thereof as they purchased the same for their own benefit and the same could not in law amount to an accession to the mortgaged property and (2) that, at any rate, the cost of acquiring the same not having been deposited at the time of redemption, the plaintiffs are not entitled to recover possession thereof.
10. In reply to the above contentions, the argument put forward on behalf of the plaintiffs-respondents is that the purchase made by the appellants was on behalf of the mortgagors as the mortgagees in possession would be deemed in law to have made the same as trustees for the mortgagors and that the plaintiffs were entitled to recover possession after paying off the defendants the cost required for the acquisition of the same.
11. On the case thus put forward by the parties, two questions arise for consideration, namely, (1) whether the suit property having been purchased by the mortgagees in possession in execution of a decree for arrears of rent amounted in law to be an accession to the mortgaged property and (2) whether in view of the fact that the plaintiffs did not deposit at the time of redemption the amount of money for which the acquisition was made, they are entitled to recover possession after paying the same to the mortgagees.
12. Section 63 of the Transfer of Property Act, so far as is relevant for the purpose of the present enquiry, enacts that where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession and that where such accession has been acquired at the expense of the mortgagee, & is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it.
13. It is manifest from this section that if the purchase of the suit land in the present case is an accession to the mortgaged property, the plaintiffs are entitled to get possession over the same and they have to pay to the mortgagees the expense of acquiring it. The question, however, is whether the above purchase is an accession at all to the mortgaged property. In support of the contention that it is an accession, reliance has been placed on behalf of the plaintiffs-respondents on Section 90 of the Indian Trusts Act, 1882, which lays down that where a tenant for life, co-owner, mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage.
14. It is contended on behalf of the plaintiffs that in the present case the mortgagees by availing themselves of their position as mortgagees-landlords have gained an advantage by purchasing the suit-land in execution of a decree for arrears of rent and, therefore, they must be held to be trustees for the mortgagors and the suit-property must be held to be an accession to the mortgaged property.
15. The principle of law which has all along been accepted for deciding this question is that if a mortgagee in possession has derived from his mortgagor any peculiar means or facilities in making the acquisition, it shall be regarded as an accretion to the mortgaged property, but, if, on the other hand, in making the acquisition he stands in the same position as any stranger, then it cannot be regarded as such accession.
16. In other words, in order to decide this question, it has to be seen whether the mortgagee could acquire the property apart from his right as a mortgagee or not. If he could acquire, there can be no question of his having acquired the same by taking advantage of his position as a mortgagee so as to come within the purview of Section 90 of the Indian Trusts Act and in that case the acquisition cannot be an accretion to the mortgaged property.
17. If, on the other hand, the acquisition could not have been made by him but for the position that he occupied as a mortgagee, the acquisition will come within the ambit of the above section and it must be held to be an accession to the mortgaged property and to go to the mortgagor on redemption on equity being worked out between them.
18. In Rajah Kishendatt Ram v. Mumtaz All Khan, 6 Ind App 145 (PC) (A), the mortgagee of the proprietary rights of a Taluqdar, having, taken advantage of his position as a mortgagee, acquired certain subordinate tenures during the continuance of the mortgage on very favourable terms, which could not have been available to him if he was not a mortgagee. Their Lordships, therefore, held that the mortgagor was entitled to redeem the estate as then enjoyed by the mortgagee on paying the original mortgage money plus the purchase money of the subordinate tenures.
19. Their Lordships, however, made it perfectly clear that every purchase of a sub-tenure by the mortgagee must not necessarily be held to have been made for the benefit of the mortgagor and that in order that it should have been made for the benefit of such mortgagor, the mortgagee must have derived from his mortgagor any peculiar means or facilities for making the purchase which would not be possessed by a stranger. In this connection I may better quote the observation made by their Lordships which is as under:
“Their Lordships are not prepared to affirm the broad proposition that every purchase by a mortgagee of a rub-tenure existing at the date of the mortgage must be taken to have been made for the benefit of the mortgagor, so as to enhance the value of the mortgaged property, and make the whole, including the sub-tenure, subject to the right of redemption upon equitable terms.
It may well be that when the estate mortgaged is a zamindary in lower Bengal, out of which a putnee tenure has been granted, or one within the ambit of which there is an ancient mokurreree istimrari tenure, a mortgagee of the zemindary, though in possession, might purchase with his own funds and keep alive for his own benefit that putnee or mokurreree. In such cases the mortgagee can hardly be said to have derived from his mortgagor any peculiar means or facilities for making the purchase which would not be possessed by a stranger, and may therefore be held entitled, equally with a stranger, to make it for his own benefit.”
20. The above view of the law on the subject was reiterated by their Lordships in Sorabjee v. Dwarkadas Ranchhoddas, 59 Ind App 366 : (AIR 1932 PC 199) (B). It was held in that case that Section 63 of the Transfer of Property Act, 1882, does not entitle a mortgagor to recover on redemption a subordinate tenure in the mortgaged property which the mortgagee has acquired for his own benefit and without availing himself of his position as mortgagee so as to bring the transaction within Section 90 of the Indian Trusts Act, 1882.
21. In support of the appeal Counsel for the appellants has placed reliance on a Bench decision of this Court in Sheo Pujan v. Bhagwati*, AIR 1949 Pat 99 (C). In that case, certain milki lakheraj interest was given in usufructuary mortgage to the ancestor of the defendant. Subsequently, the landlord of that interest sold the same to the plaintiff.
22. During the continuance of the mortgage the defendant in execution of a decree for rent obtained by him as a mortgagee purchased the raiyati land of a certain raiyat at the auction sale. Later on, the plaintiff redeemed the rehan and got possession over the milki interest. Subsequently the plaintiff instituted a suit for possession over the raiyati land purchased by the mortgagee as stated above on the ground that the acquisition of the raiyati land was an accretion to the mortgaged property.
23. Their Lordships after reviewing the various decisions on the point came to the conclusion that the purchase of the raiyati interest by the mortgagee in possession in execution of a decree for rent obtained by him could not be said to have been a purchase by him as a result of his enjoying a peculiar benefit which was not available to the stranger or as having gained an advantage in derogation of the rights of the mortgagor in the property and the claim of the plaintiff was disallowed.
24. In coming to that conclusion their Lordships observed that in considering the question as to whether a purchase by a mortgagee in possession during the subsistence of the mortgage is an accession to the mortgaged property the court will have to bear in mind the provisions of Section 63 of the Transfer of Property Act as well Section 90 of the Indian Trusts Act, and accepted the principle, which, as I have already stated, has been universally accepted, to the following effect:—
“The question whether a property acquired by a mortgagee in possession is an accretion to the mortgaged property or not depends upon the entire facts and circumstances of the case. If it appears that by reason of his position as a mortgagee in possession he has had peculiar facilities for acquiring the properties in question, such properties should be regarded as an acquisition to the mortgaged property.
If, on the other hand, it appears that in regard to such acquisition, the mortgagee in possession is in the same position as any third party, then the properties so acquired should not be regarded as an accretion to the mortgaged property. The test, therefore, is whether the mortgagee availing himself of his position as such has gained an advantage in derogation of the rights of other persons interested in the property, or whether as representing the persons interested in the mortgaged property he has gained any particular advantage.”
25. Applying the above principle to the facts of that case their Lordships took the view that when the raiyati holding was put up for sale in execution of a decree for rent obtained by the mortgagee, it could have been purchased by any stranger and if instead of a stranger the purchase was made by the mortgagee in possession himself, he could not be said to have availed himself of his position as a mortgagee inasmuch as he could very well have purchased it like any other stranger and such a purchase could not be in derogation of the rights of the mortgagor.
26. In my opinion, the view taken in this case is the only possible and correct view. I fail to understand how a mortgagee in possession, while purchasing any subordinate interest under his mortgage in execution of a decree for rent for that subordinate interest which he was entitled to receive as a mortgagee, could be said to have purchased it by taking advantage of his position as a mortgagee or in derogation of the rights of the mortgagor.
27. In my view, in making such a purchase the, mortgagee in possession does not take any advantage of his position as a mortgagee so as to, come within the ambit of Section 90 of the Indian. Trusts Act and his purchase stands on the same footing as a purchase by a stranger. That being the position, it could not be an accession to the mortgaged property under Section 90 of the Indian Trusts Act or Section 63 of the Transfer of Property Act.
28. The present case is thoroughly covered by the above Bench decision of this Court, and the view taken in that case being the only correct view, the acquisition of the suit-land in the present case did not amount to an accession to the mortgaged property.
29. In support of the decree, however, reliance has been placed on behalf of the plaintiffs-respondents on another Bench decision of this Court in Kameshwar Singh v. Jhalak Singh, AIR 1949 Pat. 16 (D). In that case it was held that where a usufructuary mortgagee brings a subordinate tenure or holding to sale in execution of a decree for the rent thereof, which apart from the mortgage, would be payable to the mortgagor and auction purchases the same, the mortgagee unquestionably derives from his mortgagor and exercises a peculiar means or facility for making the acquisition which would not be possessed by a stranger and such a case, therefore, falls directly within the equitable principle of English law embodied in Section 90 of the Trusts Act, and that in such a case the mortgagee has availed himself of his position as such to gain an advantage in derogation of the rights of the mortgagor and also gained an advantage and, therefore, both upon the principle and upon the express provision of Section 90 of the Trusts Act the mortgagee must hold the advantage so gained for the benefit of all the persons interested in the property including the mortgagor.
30. This case undoubtedly supports the plaintiffs-respondents. In this case the plaintiffs, defendants 1 to 5 and defendants 6 to 8 were the proprietors of a certain tauzi. The plaintiffs gave their share in that tauzi in ijara to defendants 1 to 5 in the year 1929. At that time the whole of the land comprised in the estate, with the exception of an inconsiderable area which was gair-mazrua or waste land was in the possession of occupancy raiyats.
31. During the continuance of the ijara the defendants instituted suits for recovery of 16-anna arrears of rent against certain tenants and in execution of decrees obtained therein they purchased their holdings and the purchase price was set off towards the decretal dues. They also acquired some other raiyati lands by surrender from the tenant in consideration for the relinquishment by them of 16-anna arrears of rent to that tenant.
32. By an arrangement between the two sets of defendants, defendants 1 to 5 obtained possession of part of the tauzi and the raiyati lands so acquired. A portion of the above raiyati lands came in possession of others by way of settlement and exchange, but the rest of the raiyati lands remained in possession of defendants 1 to 5. The ijara having been redeemed, the plaintiffs instituted a suit for partition of the tauzi.
33. Defendants 1 to 5 who contested the suit did not challenge the right of the plaintiffs to have the tauzi partitioned, but they pleaded that the raiyati lands which were in their possession could not be the subject-matter of partition and they were entitled to remain in possession thereof under Section 22(2) of the Bihar Tenancy Act. The trial court accepted the plea of the defendants.
34. On appeal by the plaintiffs, this Court held the plaintiffs to be entitled to have a partition of the said raiyati lands on the ground that Section 90 of the Indian Trusts Act applied as well as on the ground that Section 22(2) of the Bihar Tenancy Act did not confer upon the defendants any right to which they were entitled to maintain as against their other co-sharers in whose takhta the land or the occupancy holding or a part thereof is allotted upon partition.
35. The decree passed by this Court, so far as it was based on the interpretation of Section 22(2) of the Bihar Tenancy Act, appears to be perfectly correct and we are not concerned in the present suit with the interpretation of that section. That decree, so far as it related to the raiyati land which had been surrendered to the mortgagees in possession is also good on the application of Section 90 of the Indian Trusts Act. The mortgagee in possession could not acquire any right over such raiyati land by means of surrender apart from his position as a mortgagee and there is no difficulty in applying the principle of Section 90 of the Indian Trusts Act to that part of the raiyati land.
36. But with utmost respect to their Lordships who decided that case, I am not prepared to accept the applicability of Section 90 of the Trusts Act to the lands which were acquired by the usufructuary mortgagees by purchase in execution of their decrees for rent. Bennett J., who gave the leading judgment in that case agreed, as he was bound to agree, with the principle of law in this regard laid down in the case of 6 Ind App 145 (PC) (A), referred to above.
37. But, if I may say so with respect, he applied that principle wrongly to the facts of that case. Once it is accepted that Section 90 of the Trusts Act comes into play only it a mortgagee in possession acquires certain property as having had peculiar facilities by reason of his position as such in acquiring the same, and not when he is in the same position as any third party in regard to such acquisition, then in my opinion, the above case must be held not to have been decided correctly on this point.
38. The reasoning given by Bennett, J., in coming to the above conclusion is that in suing and in executing the decree for the 16 anna arrears of rent and in setting off the purchase price against the decretal debt the defendants necessarily availed themselves of their position inter alia as mortgagees of the plaintiffs-appellants' one-third share therein and they thereby gained an advantage and that advantage was unquestionably in derogation of the rights of the plaintiffs-appellants which they would themselves have possessed and obtained but for the existence of the mortgage.
39. True it is that in suing and executing the decree the mortgagee availed of his position as a mortgagee, but in purchasing the raiyati land in execution of the decree the mortgagee, in my opinion, could not be said to have availed of his position as a mortgagee. He could have purchased the land as any stranger could have done at auction sale. Therefore, in purchasing the land the mortgagee did not do anything less or more than what a stranger could or could not have done.
40. In other words, in regard to this purchase, the mortgagee in possession was in the same position as any third party. This aspect of the case was overlooked by his Lordship in that case. Shearer J., in his concurring judgment also accepted the principle that if in acquiring the occupancy holdings the mortgagee took advantage of his position as such, the acquisition must be an accretion to the mortgaged property, but he also committed the same error in applying that principle to the purchase made by a mortgagee in execution of a decree for rent.
41. His Lordship, however, observed that if the mortgagees purchased the occupancy holdings at execution sales at which strangers competed and bid more than the amount due under the decree, the position may, perhaps, be otherwise. In my opinion, however, there is no difference, so far as the purchase by the mortgagee in possession is concerned, whether the purchase was made by him without there being any competition by strangers or it was made after such competition. The purchase made by him stands in the same footing as the purchase made by any stranger.
42. For the reasons given above, I am definitely of the opinion that a mortgagee in possession in acquiring a tenancy land by purchase in execution of a decree for arrears of rent for that land, which the mortgagee in possession was entitled to receive, does not take any advantage of his position as a mortgagee and in making the acquisition be is in the same position as any third party.
43. That being the position, such an acquisition could not be an accretion to the mortgaged property within the meaning of Section 90 of the Indian Trust Act and Section 63 of the Transfer of Property Act. The decision to the contrary in the Bench decision of this Court in AIR 1949 Pat 16 (D), therefore, must be held to have been incorrectly decided and is overruled to that extent.
44. In view of the above conclusion on this point it is not necessary to decide the other question raised namely, the plaintiffs, not having deposited the amount of money for which the acquisition was made at the time of redemption, were or were not entitled to recover possession on payment of the same.
45. On consideration of the authorities, the principles of law enunciated therein and the facts of the present case, it is clear that the purchase made by the defendants-appellants of the suit property in execution of their decree for rent was a purchase on their own behalf and not as trustees of the mortgagors and it was not an accretion to the mortgaged property. The plaintiffs, therefore, did not acquire any title ever the same and are not entitled to a decree for possession.
46. The result, therefore, is that the appeal is allowed, the judgments and decrees of the courts below are set aside and the suit of the plaintiffs is dismissed with costs throughout.
47. V. Ramaswami, C.J:— I agree.
48. Raj Kishore Prasad, J.:— I agree.
H.G.P
49. Appeal allowed.