The Judgment of the Court was delivered by
Koshi, J.:— These two appeals arise from one and the same decree in O.S No. 853 of 1119 on the file of the Kottarakara District Munsiff's Court. The suit was brought to redeem an otti and while the court granted redemption, the terms on which it has been allowed has not met with satisfaction from the side of the plaintiff or that of the contesting defendants. Defendant 3, one of the legal heirs of the deceased mortgagee, has brought A.S No. 330 while A.S No. 598 has been preferred by the plaintiff. For the most part the two appeals cover common grounds but before we proceed to state them we have to state the facts of the case.
2. The plaint comprises three items of which item 3 is a building on item 1 put up by the mortgagee. Items 1 and 2 belonged, to one ‘Pazhavila’ Tarwad and in a family partition effected in 1101 these items were allotted to the share of the plaintiff's father, deceased Mathevan Krishnan. On the latter's death in 1115 the plaintiff became the sole owner of the properties. Long before the partition of 1101, on 26-8-1071, the Pazhavila Tarwad had created an otti (Ext. B) in respect of these items in favour of the mother of defendants 1 to 3, Kurumba Echamma for a consideration of Fs. 10000 of which Fs. 5000 were left in the hands of the mortgagee to effect certain specified improvements on the properties. Item 1 is a puthuvat which had got silted up and the mortgagee was directed to remove the sand and silt and make the property fit for paddy cultivation. Item 2 is a chira adjoining item 1 planted with cocoanut trees and the mortgagee was directed to widen a canal running alongside of it and to construct a culvert at the junction of the canal with an adjoining river. While the properties were thus outstanding in the possession of the mother of defendants 1 to 3, on 4-4-1078 the ‘Pazhavila’ Tarwad granted a ‘melotti’ in favour of defendant 1 authorising him to redeem the otti and received a sum of Fs. 2000 as additional ottiartham. The document is Ext. C in the case and it is really a ‘melotti cum puramkadam’ deed, for besides the Fs. 2000 mentioned a further sum of Fs. 3000 was also received by the tarwad from defendant 1. In respect of the latter amount the equity of redemption was charged and the tarwad had made itself personally liable for its repayment. In fact the provision was that Fs. 1000 will be repaid before 30th Medom 1078 and the balance before 30th Medom 1080. Provision was also made in that document for payment of the value of improvements due to the mortgagee as per the terms of Ext. B, the otti deea. Defendant 1 however found himself unable to redeem the otti and on 29-3-1090 he conveyed his rights under Ext. C to his mother, the ottidar as per Ext. P. On the death of the mother defendants I to 3 succeeded to her estate and they are now the persons entitled to the rights under Exts. B and C. Defendants 4 to 20 were impleaded in the suit on the ground that they had obtained some interest over the properties under defendants 1 to 3 or their mother. In her plaint the plaintiff offered to pay Ps. 7000 towards the mortgage money due under the two documents (Exts. B and C) and Fs. 2850 towards value of improvements. The plaint averred that out of five acres and fifty-seven cents comprised in item 1, one acre and eighty cents alone had been converted into wet land and that the mortgagee had not widened the canal as per the stipulation made in the otti deed. It was admitted that the culvert had been constructed. According to the plaintiff as all the improvements specified in Ext. B were not effected, towards value of improvements the defendants were not entitled to anything more than the rateable proportion of the Fs. 5000 earmarked for that purpose in that document and such proportionate value was estimated in the plaint at Fs. 2850. The plaint also stated that the mortgagee and defendants 1 to 3 had committed waste on the properties and claimed damages in lieu thereof. Along with the plaint an amount of Fs. 12000 was paid into the Court, but the plaint contained no offer to pay the said amount or any portion thereof to the defendants before the suit was decided. The plaintiff wanted defendants 1 to 3 to remove the building shown as item 3 in the plaint schedule and claimed mesne profits of items 1 and 2 from the date of the institution of the suit as also costs of the action.
3. Defendants 1 and 3 contested the suit and they filed a joint written statement. They joined issues with the plaintiff on almost all matters referred to in the preceding paragraph. According to them the puramkadam amount of Fs. 3000 had also to be paid as part of the price of redemption. They claimed reasonable compensation for all improvements effeced by them regardless of the stipulation in Ext. B and claimed to have planted cocoanut and other trees on the portion of item 1 which had not been converted into wet land. They disputed the plaint allegations regarding waste and the plaintiff's right to claim damages. They agreed to remove the building and claimed that they were entitled to their costs in the suit. It was also contended that the claim for mesne profits was unsustainable.
4. The lower court fixed the mortgage money at Fs. 7000 and held that notwithstanding the stipulations in Ext. B the defendants were entitled to reasonable compensation for all the improvements effected by them. The lower court's award in that behalf came to Fs. 1652-1613 chs.-1 cash and the plaintiff's claim for damages in lieu of alleged waste was negatived. The court also disallowed any mesne profits to the plaintiff but has held that the mortgage money paid into the court should bear 6 per cent interest per annum from the date notice of deposit was given to the defendants. The defendants are directed to remove the building (item 3) within two months from the date of the service of the execution notice and in case that is not done provision is made for its removal through court. As for costs the direction is that the plaintiff should bear her costs and pay the defendants one-fourth of the costs incurred by them.
5. As against the decree passed in the above terms both sides have appealed. In A.S No. 330 which is the appeal by defendant 3 the points taken are: (1) that the puramkadom amount of Fs. 3000 should also have been made part of the price of redemption; (ii) that a further amount of Fs. 1297 ch. 0 and Cash 6 should have been allowed towards value of improvements; (iii) that the provision for interest on the mortgage money is wrong and (iv) that the contesting defendants should have been allowed all their costs in the suit.
6. The points taken in the plaintiffs appeal A.S 598 are: (i) that the Court's award towards value of improvements is excessive and that regard being had to the provision in Ext. B the defendants are not entitled to anything more than Fs. 2850, the rateable proportion for the improvements carried out; (ii) that the Court went wrong in refusing to award mesne profits and (iii) that the plaintiff should have been allowed her costs and not made liable for any portion of the costs incurred by the defendants. Of these, the first point alone was seriously pressed while on the two other points it was more or less conceded that the decision on them will depend upon the lines the decision of the main question in the two appeals, take.
7. It is convenient to deal with point (i) in A.S No. 330 first. When defendant 1 transferred his rights under Ext. C to his mother as per Ext. P. she could have enforced payment of the puramkadom of Fs. 3000 by means of a suit. In other words it was a live claim on 29-3-1090, the date of Ext. P. In fact an in fructuous attempt was made in O.S 390 of 1090 of the Quilon Munsiff's Court to recover it. Though a decree was obtained execution was disallowed on the ground that the plaintiff tarwad was not properly represented in the suit. Vide Exts. K and J, the respective orders of the execution court and the appellate court made on the matter. A second suit to realise it, with all the necessary parties on the record, was not prohibited by law provided such suit was brought within the statutory period. It is not very clear from the lower court's judgment as to the ground on which it refused to tack on the puramkadom amount to the ‘Ottiartham’ due as per Exts. B and C. From what has been stated above it is clear that Exts. J and K created no bar to it.
8. The plaintiff's learned Counsel strenuously contended that the law as administered in Travancore did not permit such tacking to be made and that in any view it should not be allowed in this case as when it was claimed the right to recover the puramkadam amount had become barred by limitation. So far as we can see there is no substance in either contention. The Travancore Law on the subject always remained untrammelled by any provision of the Transfer of Property Act and in jurisdictions where the said Act was introduced before section 61 thereof was amended by Act XX of 1920 in cases where there were two incumbrances on the same property the mortgagor was not entitled to redeem the one without redeeming the other. Speaking of section 61 as it stood before the said amending Act Lord Sinha said as follows in pronouncing the judgment of the Judicial Committee in ‘Ramarayaningar v. Govinda Krishna’, AIR 1927 PC 32 at page 36:
“The section which the appellant's counsel urges as being applicable to the facts of this case is Section 61 of the Transfer of Property Act, which enacts by implication that a mortgagor seeking to redeem shall not be entitled to do so without paying any money that may be due under a separate mortgage or charge, if the latter relates to the same property.”
9. In this context it will be instructive also to quote a passage from the judgment Lord Romer gave in ‘Janki Nath v. Pramatha Nath’, AIR 1940 PC 38. At page 43 of the report the learned Lord is seen to have observed:
“In the case however of a mortgagee holding a first mortgage on property A and also a second mortgage on the same property, the mortgagor cannot on payment of the first mortgage redeem the property, that is to say claim a re conveyance and delivery of the title deeds, and so forth, unless he repays what is due on the second mortgage.”
10. These two decisions were referred to and followed by a Division Bench of the Travancore High Court composed of Krishnaswamy Iyer, C.J, and Krishna Pillai, J. in ‘Bhaskaran Moothathu v. Agnisarmaru Namboori’, 1946 Trav LR 546. In Jthat case Krishnaswamy Iyer, C.J who pronounced; the judgment of the Court examined at length the question whether in circumstances similar to the: present the mortgagor can be permitted to redeem one of the two mortgages alone subsisting on an item of immovable property and categorically stated 1 that notwithstanding the fact that the Transfer of Property Act was not law in Travancore the principle which S. 61 (before its amendment in 1929) impliedly recognised was applicable to Travancore and that all the mortgages over the same property in favour of one and the same person must be simultaneously redeemed. We were not told anything at the Bar to induce us to take a different view here. It is worthy of notice that in a recent case before the Madras High Court it was suggested that the common law of India bearing on the point even during the pre-Transfer of Property Act days, that is, before 1882 was the same as that enacted by S. 61 as it originally stood. See “Nachappa Goundan v. Samiappa Goundan’, AIR 1947 Mad 18 at p. 24. In that case Somayya and Yahya Ali, JJ, have discussed the whole question very elaborately and the judgment, if we may say so with respect, will well repay perusal.
11. Here it may usefully be added that in Cochin the same rule was recognised to be the law even long before the Transfer of Property Act was made law there in 1112. See ‘Uluthra Warrier v. Subramonia Pattar’, 3 Select Decisions 34. Recently a Division Bench of this Court consisting of the learned Chief Justice and Mr. Justice Sankaran, was called upon to examine what the law on the subject was in Cochin before the enactment of the Cochin Transfer of Property Act, XVII of 1111. The learned Judges applied the decision in 3 Select Decisions 34 to the decision of the cases before them and held that what was laid down in that decision should be taken to be the common law of Cochin on the point. See ‘Azheekkal Sree Varaha Devaswom v. Ummer Sait Abdulla Sait’, 1950 Ker LT 462 and ‘Narayana Menon v. Raman Namboodiripad’, A.S No. 68 of 1123 (Cochin) decided on 31-8-1951.
12. On the question whether a mortgagor can be allowed to redeem the first mortgage over a property leaving out the second one that was created in favour of one and the same person in cases where there is no statute law applicable we do not think it necessary to add anything to what the learned Judges in the Travancore and Cochin cases referred to have said on the subject or to what is contained in the two decisions of this Court mentioned above. The fact that an unsuccessful attempt was made to realise the puramkadam amount in this case is in our opinion no bar at all to permit the tacking asked for. It was not disputed that a second suit within the statutory period was not under the circumstances prohibited.
13. The further question is whether the fact that the defendants had by the time the present suit was brought lost their right to enforce payment of the puramkadam amount by a separate suit will stand in their way to claim it when the two otti transactions are sought to be redeemed. The two decisions of this court mentioned above and the Travancore and Cochin cases referred to, as also the decision in ‘Nachappa Goundan v. Samiappa Goundan’, AIR 1947 Mad 18, answer the question in favour of the defendants. The general rule is that a ground of defence never becomes barred by statutes of limitation. See ‘Paras Ram v. Sheo Dhan’, AIR 1932 All 558. The Limitation Act prescribes only the periods within which actions have to be brought. In AIR 1947 Mad 18 at page 33 it is pointed out that all that is needed for a mortgagee to avail of the right of tacking is that on the date when several mortgages become united in him they must all have been live mortgages and that if a mortgagee has a right to insist upon redemption of all the mortgages which have become united to him, he can hold on to the property and claim that the mortgagor, when redeeming the one, must redeem all. Somayya, J. who gave the judgment also said that there does not seem to be any reason or principle which necessitates all mortgages being alive on the date of the suit. Though in ‘Bhaskaran v. Agnisarmaru Namboori’, 1946 Trav LR 546, the question did not directly arise the point is discussed at page 557 and answer given in the following terms:
“The mortgagee's suit may be barred for the recovery of the debt; still the debt subsists and is not extinguished and so long as the debt subsists the charge also subsists. The mortgagor is given the right to redeem over a period of 50 or 60 years as the case may be under the Limitation Act and his redemption would necessarily involve the discharge of the barred, but none the less existing, debt payable to the creditor.”
14. In ‘Uluthra Warriar v. Subramonia Pattar’, 3 Select Decisions 34 it was observed that though the remedy to enforce payment of the puramkadom by a regular suit was time-barred as the puramkadam created an unmistakable charge on the mortgaged properties, the mortgagee had an undoubted lien on the same which was not capable of being extinguished so long as the debt remained unpaid. The same rule was enunciated in the decisions in ‘Venkataramana v. Rangiah Chetti’, AIR 1922 Mad 249 and ‘Ananthanarayana Iyer v. Sivarama Krishna’, AIR 1943 Mad 370, Krishnaswatni Ayyangar, J. with whom Leach, C.J concurred, observed in the latter case that the prevailing view in the Madras High Court was that even if a mortgage was barred by limitation it was still available to the mortgagee as a shield to defend his possession. The learned Judge added that limitation does not extinguish the liability but only bars the remedy.
15. In the light of these authorities and the principles behind them the lower court's decision refusing to make the puramkadam amount part of the redemption price is clearly wrong and we modify that decision by holding that the mortgage money repayable is Fs. 10,000, Point (i) in A.S 330 therefore succeeds.
16. The next point to be discussed is that relating to value of improvements, while the plaintiff complains that the lower court's award in that respect is excessive, in A.S 330 defendant 3 has claimed further amounts. A commission was deputed by the lower court to assess the value of all the improvements the mortgagee and her successors in interest had effected on the properties and the further amount defendant 3 claims in the appeal represents the difference between the commissioner's valuation and the amount the lower court has awarded. The contention raised before us on behalf of the plaintiff is that the parties are bound by the terms of Ext. B and that as the mortgagee or her successors in interest had not effected even all the improvements specified in Ext. B they cannot get anything more than the rateable proportion for the works or improvements effected. The plaintiff also raised a further contention that the conduct of the mortgagee and that of defendants 1 to 3 in planting trees on that part of item 1 which remains unconverted was unauthorised and that they cannot be paid any value for the trees or other improvements effected thereon. We shall, first discuss the question of the value relating to the improvements specified in Ext. B, the otti deed.
17. What the lower court has done is to award reasonable compensation for the three items of improvements or works specifically mentioned in Ext. B. It has awarded Rs. 604-2-8 cash for converting one acre and eighty cents out of item 1 into wet land, Rs. 581-7-8 for widening the canal and for making a by-canal and Rs. 117 for the culvert. The question for our decision is whether the defendants are entitled to these amounts or whether they are entitled only to receive the rateable proportion of Ps. 5000 for the works done. Admittedly the whole of item 1 has not been converted as paddy land. Though in the lower court it was contended that two acres had been so converted the finding that the extent of the converted area is only one acre and eighty cents was not challenged before us. The law of landlord and tenant as administered in Travancore did not impose any restrictions on the freedom of the parties to make contracts regarding value of improvements. That law recognises no distinction whether the value is fixed before the improvements are made or after it. An exhaustive review of the case law bearing on the subject is to be found in ‘Madhavan Pillai v. Thrasia’, 23 Trav LJ 369. The headnote to that case which correctly sets out the facts and the principle laid runs thus:
“Where a mortgage deed of certain paddy fields provided for the conversion thereof into a garden and besides fixed the cost of conversion but the mortgagee having converted only a portion of the fields claimed, on redemption, the actual amount he had spent for the conversion, in excess of the amount fixed.
‘Held’, that the terms of the mortgage deed must be strictly enforced as between the mortgagor and the mortgagee and the mortgagee cannot claim anything more than a rateable proportion of the amount provided for in the mortgage deed in respect of the cost of conversion.”
18. We have not been persuaded by any argument raised on behalf of defendant 3 to depart from the rule laid down as above. We think it unnecessary to cite the earlier cases referred to in that decision. It would suffice for our present purpose to say that case reviews all the decisions on the point commencing from the earliest decision in ‘Kolappan Pillai’, I.U.D 517 and that it also refers to the decision in ‘Janardanan v. Subramania Iyen’, 21 Trav LJ 265 : 5 Trav LT 668 which was brought to our notice by the learned counsel for defendant 3. That case was cited as striking a discordant note to the uniform course of decisions laying down the rule enunciated in 23 Trav LJ 369, but on closer examination it will be found that decision does not conflict with any of the earlier or later pronouncements on the subject. There the learned Judges found that the terms of the deed were ambiguous and on that basis applied a well-known rule of construction that if a doubt arises upon the construction of a grant and that doubt can be removed by construing the deed adversely to the grantor that will be done. The learned Judges were unable to read into that document a contract contrary to the usual rule that a mortgagee or tenant was entitled to reasonable compensation for the improvements effected by him. As observed in 23 Trav LJ 369 that case does not purport to lay down any general proposition of law, on the other hand it assumes that if there is a contract between the parties fixing the value of improvements the parties will be bound by that contract. What the decision in 23 Trav LJ 369 and the cases referred to there lay down is not a different rule. In the earliest case in ‘Kolappan Pilllay’, I.U.D 517 the learned Judges concluded their discussion as follows:
“The defendant knew at the time he executed, the amount sanctioned in Exhibit A for improvement, that he did so at his own risk, where the amount of improvement is fixed by deed, the term of the deed must be strictly enforced.”
19. The principle of these decisions has recently been followed by a Division Bench of this Court of which one of us was a member. See ‘Chempakakutty v. Ramalekshmi Ammal’, 1949 Ker LT 92. There the case in 21 Trav LJ 265 : 5 Trav LT 668 was distinguished.
20. From the foregoing discussion it is clear that defendants 1 to 3 and all those holding under them are bound by the stipulations in Ext. B and that for the items of works specified in that document they cannot get a higher value than that fixed by it. The plaintiff has offered Ps. 2850 as the rateable proportion for the works done and in the absence of any case or evidence that the said amount does not represent the true proportion we have to accept it. That amount and that amount alone can be awarded for the works referred to and we therefore modify the lower court's decision accordingly. In place of Rs. 1652-13-1 cash awarded by the lower court for these works the defendants will receive only Fs. 2850 as stated above.
21. There is one more aspect to be considered under the head of value of improvements. The lower court has awarded Fs. 350-3 chs. 1 cash as the value of the various kinds of trees planted on the portion of item 1 that remains not converted as paddy land. The plaintiff's case regarding it is that those improvements are inconsistent with the purpose for which the plaint properties were handed over to the possession of the predecessor in interest of defendants I to 3. Ext. B makes it clear that ‘Pazhavila’ Tarwad wanted to have item 1 made fit for paddy cultivation and the works the mortgagee was directed to do were all works calculated to that end. The plaintiff has further case that the sand and silt removed from the one acre and eighty cents converted into paddy land were all dumped on the remaining portion of item 1 and that it is how that portion was made fit for planting trees. It is for an owner to decide what use he should make with his land and if a mortgagee or lessee is given possession of a land with specific directions as to what he should do with it or what improvements he should make thereon, he cannot disobey those directions or make such use as he in his wisdom deems fit or claim compensation for improvements effected according to his whims and fancies. This position would seem to be so well-established in the Travancore Courts and we need only cite one case to illustrate it. In ‘Kunjan v. Nethran Bhattathiripad’, 18 Trav LJ 95 it was held as follows:
“A lessee has no right, without the consent of the lessor, to convert, wholly or in part, the nature or character of the holding from its original purpose. If a lessee or mortgagee chooses to speculate and spends money in the hope of improving the property by altering its character, without the express or implied assent of the owner he must do so at his own risk. If it were not so, a weapon would be put in the hands of the lessee or mortgagee which might be abused for increasing the difficulties in the way of the right of redemption.”
22. The learned Judges in that case quoted a passage in their judgment from ‘Padmanathan Bhoothanathan v. Kali Neelakandan’, 30 Trav LR 47 and it would be instructive to extract that passage here. In that earlier case Hunt and Ananda Row, JJ. observed:
“A mortgagee may, no doubt, effect improvements consistent with the character of the land, which he is given as security over and into which he is placed in possession; but he has to return the land in the character in which he got it. It would be a very dangerous thing to permit a mortgagee interfering with the character of the land when objected to on the pretext of the conversion being what he considered an improvement. At that rate there would be nothing to prevent him from converting a house into a stable on the pretext that stabling would yield better a monitary return.”
23. The law on the subject being what is set out above we cannot uphold the lower court's award of Ps. 350-Chs. 3 cash 1 for the improvements referred to and we set aside that award. However, when the plaintiff is not prepared to pay for these improvements the defendants must have the liberty to remove them and we accord permission to the defendants to do so. If the defendants choose to remove these improvements they must do it within two months of the receipt of the notice of the filing of the execution application. That is the period allowed by the lower court to remove the building and if the trees coming under this head are not removed within that time the properties together with these improvements will be delivered over to plaintiff, in which case the defendants will have no further right or claim regarding them. The plaintiff has of course the option to seek to retain these improvements on payment of the value fixed by the lower court or such other value as the parties may hereafter choose to fix. The court's decision on the point however is as indicated above.
24. The main point in the plaintiff's appeal therefore fully succeeds. The defendants are not entitled to claim anything more than that Ps. 2850 towards the value of their improvements and point (ii) in A.S 330 and point (i) in A.S 598 are decided accordingly.
25. Point (iii) in A.S 330 and point (ii) in A.S 598 relate to allied matters. As a result of our decision on point (i) in A.S 330 the defendants are entitled to get Ps. 10000 as mortgage money. We have also found that the plaintiff is bound to pay Ps. 2850 towards the value of improvements. Though an amount of Fs. 12000 was deposited in Court when the plaint was filed that amount is now found to be insufficient to cover the mortgage money and value of improvements. We have already said that the plaintiff did not want the defendants to draw the money before the suit was decided. In these circumstances the plaintiff's claim for mesne profits for any period anterior to all the amounts due to the defendants coming into court is unsustainable and we repel that claim. Point (ii) in A.S 598 is hence decided against the plaintiff.
26. Point (iii) in A.S 330 relates to the award made by the lower court regarding interest on the mortgage money. Both sides have construed the last sentence in the lower court's judgment reading “Interest on mortgage money at 6 per cent, from the date of service of notice of deposit” as meaning that the mortgage money should bear interest from 29-2-1120 well nigh two years before the date of the decree appealed from. Presumably 29-2-1120 was the date when the defendants were given notice of the deposit of Fs. 12000. We have however our own doubts whether the lower court meant that. However that is beside the point now. As until this date there is no payment or tender by the plaintiff of the full price of redemption no interest on the mertgage money can be allowed until all amounts due to the defendants are brought into the court and notice of it given to the defendants. If from the date of such notice delivery is delayed beyond the two months period fixed by the lower court and referred to in our judgment the net price of redemption shall thereafter bear interest till the date of delivery at 6 per cent per annum. This is our decision on point (iii) in A.S 330 and that goes entirely in favour of the defendants.
27. There remains the question regarding costs before the lower court. Both sides are dissatisfied with the lower court's direction about it. It was strenuously argued on behalf of defendant 3 that there were no circumstances in the case which warranted a departure from the normal rule that the mortgagee should get the costs of a suit for redemption. The lower court has awarded the contesting defendants only one-fourth of the costs incurred by them. We are not satisfied that there are sufficient grounds to interfere with the discretion exercised by the lower court on this matter. Decisions have held that a claim for excessive value for improvements will not amount to misconduct to disentitle a mortgagee to his costs in an action for redemption. That however is not the position here the dispute is not about the quantum of the value alone. A principle is also involved, that is whether the mortgagee or her heirs at law could claim anything more than what was bargained for in the otti deed. Further the contesting defendants also put the plaintiff to prove her title to redeem. That is a matter about which no doubt at all could have been entertained by them in these circumstances we decline to interfere with the lower court's decision awarding the contesting defendants only one-fourth of the costs they incurred in the lower court. This necessarily implies that we are not awarding the plaintiff her costs before the lower court. The normal rule apart, in the circumstances of the case the plaintiff's demand for costs is clearly unsustainable. Point (iv) in A.S 330 and point (iii) in A.S 598 are hence decided against the respective appellant. All the points covered by the two appeals have been dealt with and the decree the lower court passed for redemption will stand modified as indicated in the preceding paragraphs of this judgment.
28. The two appeals are disposed of accordingly and the plaintiff and defendant 3 shall receive and pay costs in either appeal in proportion to her or his success and failure.
29. Orders accordingly.