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Citation Codes
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Case Number
Attorney(S)
  • Mr. Shiva Prasad Sinha, for the appellants.
  • Mr. Baleshwari Prasad, for the respondents.
Judges
  • Sir Lal Gopal Mukerji
  • A.C.J
  • King
  • Niamat-ullah, JJ.
Acts
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Citation Codes
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citation codes
Case Number
Attorney(S)
  • Mr. Shiva Prasad Sinha, for the appellants.
  • Mr. Baleshwari Prasad, for the respondents.
Judges
  • Sir Lal Gopal Mukerji
  • A.C.J
  • King
  • Niamat-ullah, JJ.
Acts
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Smart Summary

Full Bench Opinion — Summary

Factual and Procedural Background

This Full Bench decision arose because the appeal involved difficult questions of law. The core factual matrix, as stated in the opinion, is:

  • One Gobind Singh owned a 2 annas 8 pies share in several villages and had eight sons (Rajpal, Ajit, Ramghulam, Dindayal, Ramroshan, Harnam, Ahbaran and Kalu).
  • All the sons except Rajpal made a usufructuary mortgage of a 2 annas 4 pies share for 15 years in 1883 in favour of Harmangal Singh; Harmangal Singh is now represented by the defendants in the suit which gave rise to this appeal.
  • The plaintiff (respondent No. 1 in the appeal) sued to recover the property mortgaged in 1883, except a 2 pies share that the mortgagee purchased, on payment of a proportionate amount of the outstanding mortgage money (Rs. 600).
  • The plaintiff had purchased a total of 18 2/7 pies by acquiring shares from the branches of Dindayal, Ramroshan, Harnam and Ajit; Kalu's branch had become extinct and its 4 pies were distributed among the remaining seven branches, augmenting each branch's share by 4/7 pies.
  • The defendants pleaded that several descendants of different branches had executed later deeds of further charge (four documents dated in 1884–1885), and that the plaintiff could not redeem the property without paying the amounts due under those later deeds.
  • The courts below reached different conclusions on which of the four subsequent documents created charges on the 1883 mortgaged property; this dispute on the legal effect of the subsequent documents led to the Full Bench reference.

Legal Issues Presented

  1. Whether each of the four subsequently executed deeds (dated between 16 July 1884 and 4 September 1885) created a charge on the property mortgaged in 1883 so that sums due on those deeds must be paid at the time of redemption of the prior mortgage.
  2. Whether a subsequently registered sale deed dated 28 July 1920 has priority over the four unregistered deeds of further charge under section 50 of the Registration Act, thereby annulling or defeating those unregistered instruments.
  3. What is the extent of the liability of particular portions/shares of the mortgaged property to the four further-charge documents (i.e., how should redemption liability be apportioned among the various branch shares acquired by the plaintiff)?
  4. Whether the plaintiff may redeem more than the share he purchased (given that the mortgagees purchased a 2 pies share, allegedly breaking the integrity of the original mortgage).

Arguments of the Parties

Plaintiff (Respondent No. 1) — contentions as reflected in the opinion

  • The plaintiff sought to redeem the parts of the property he purchased (total 18 2/7 pies) by paying his proportionate share of the original mortgage money (Rs. 600) and claimed the right to recover the mortgaged property subject to the limits of his purchase.
  • At a later stage (but not early in the proceedings), the plaintiff advanced a plea based on the registered sale deed dated 28 July 1920 asserting its priority over the unregistered subsequent deeds; however, the opinion notes that this plea was raised belatedly and was not put forward before the Munsif during early arguments.

Defendants (Representing Harmangal Singh) — contentions as reflected in the opinion

  • The defendants pleaded (and the defendant-side contention before the courts below was) that certain descendants executed four deeds by way of a further charge at different dates, and that the plaintiff could not recover the property claimed without payment of the money borrowed under those deeds.
  • The learned counsel for the respondents (defendants) argued that the registered sale deed of 28 July 1920 should have priority over the four unregistered documents under section 50 of the Registration Act, and so the sale deed effectively annulled or defeated the four unregistered charges.
  • Mr. Baleshwari Prasad (cited in the opinion) argued that for determining liability the court should separate the several shares belonging to different branches so as to apportion the charge correctly among the various portions purchased by the plaintiff.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Aditya Prasad v. Ram Ratan Lal (Privy Council) The agreement that a mortgagor shall pay the amount due on a subsequently executed bond before redeeming a prior mortgage operates as an agreement to create a further charge on the previously mortgaged property. The court relied on this authority to conclude that the language in the four documents — together with stipulations not to mortgage or sell the previously mortgaged property until the subsequent debts were paid — was sufficient to create further charges on the 1883 mortgaged property; consequently, the court held that all four documents created further charges.

Court's Reasoning and Analysis

The court's reasoning proceeds in clear analytical steps limited to the material in the opinion:

  1. Interpretation of the four subsequent documents: The court examined translations of the four deeds (dated between July 1884 and September 1885). Each instrument contained substantially similar language providing that the maker would "first pay" the amount due on the later deed (with principal and interest) when redeeming the 1883 mortgage, and that until payment of the later amount they would not mortgage or sell the previously mortgaged zamindari.
  2. Legal principle applied: The Bench applied the principle from Aditya Prasad v. Ram Ratan Lal that such an agreement — obliging payment of a subsequently executed debt before redemption of an earlier mortgage — creates a charge on the property previously mortgaged. The additional stipulation refraining from sale or further mortgage reinforced that the previously mortgaged property was made security for the later borrowings.
  3. Conclusion on creation of charge: On that basis, the court concluded that all four documents created further charges on the property mortgaged in 1883 (contrary to the mixed findings of the courts below where some documents were held not to create charges).
  4. Registered sale deed argument (section 50, Registration Act): The court next considered the respondents' counsel's contention that a registered sale deed dated 28 July 1920 should have priority over the unregistered further-charge documents under section 50 of the Registration Act. The opinion recounts transactional facts concerning that sale deed (who sold to whom, that the sale deed did not mention the four further-charge documents but did mention the 1883 mortgage) and subsequent dealings (including a mortgage and purchase in execution by Jaipal).
  5. Procedural bar to raising the 1920-sale plea: The court emphasized that the plea based on the registered sale deed was raised belatedly — it was not raised before the Munsif during initial arguments — and that this belatedness precluded the defendants from relying on a possible contention that the plaintiff had purchased with notice of the unregistered documents. The Bench found that the plaintiff should have advanced the plea earlier and refused to allow the plaintiff to raise it at that late stage.
  6. Apportionment of liability among shares: Accepting the argument that liability must be apportioned among the separate branch shares, the court analyzed how each of the four subsequent documents attaches to specific branch shares and how redemption payments should be allocated. The court noted that the defendants (mortgagees under the 1883 deed) had purchased a 2 pies share, thereby breaking the integrity of the original collective mortgage, and that the plaintiff could therefore only redeem the shares he had purchased (18 2/7 pies).
  7. Detailed allocation: The court mapped each document to the branch shares and specified how much must be paid to redeem each portion:
    • Document No. (1) (16 July 1884) — executed by Ajit's branch: Ajit's original 4 pies redeemable on payment of one-seventh of Rs. 600 plus the amount due under document No. (1).
    • Dindayal's original 4 pies — no further charge: redeemable on payment of one-seventh of Rs. 600 only.
    • Ramroshan's original 4 pies — charged under document No. (3): redeemable on payment of one-seventh of Rs. 600 plus amount under document No. (3) (11 April 1885).
    • Document No. (2) (6 September 1884) — executed by Deonarain (Harnam's branch) and Mata Prasad (Ramghulam's branch): Ramghulam's 2 pies share is now in defendants' possession; Harnam's 2 pies share that is liable is redeemable on payment of one-fourteenth of Rs. 600 plus one-half of the sum due under document No. (2). The other half of Harnam's original share (2 pies) is redeemable on payment of one-fourteenth of Rs. 600 only.
    • Kalu's 4 pies share — successors created further charge under document No. (4) (4 September 1885): Kalu's 4 pies were inherited to the extent of 2 2/7 pies by the four branches purchased by the plaintiff; the plaintiff may redeem this 2 2/7 pies by paying four-sevenths of one-seventh of Rs. 600 plus four-sevenths of the amount due under document No. (4).
  8. Remedial order and interest: Based on that apportionment, the court modified the decrees below, ordering a fresh decree to be prepared that specifies the several amounts payable under the various documents. The Bench granted six months' time for payment, directed that interest at the stipulated rate be calculated up to six months, and prescribed an interest rate of 6% per annum thereafter in case of delay in redemption on the various bonds of further charge.

Holding and Implications

HOLDING: The Full Bench held that all four subsequently executed documents create further charges on the property mortgaged in 1883. The court modified the decrees below and directed that redemption be allowed only in respect of the shares actually purchased by the plaintiff (18 2/7 pies), with specific apportionment of amounts payable in respect of the original mortgage (Rs. 600) and the amounts due under each of the four further-charge documents.

Consequences and direct effects on the parties (as set out in the opinion):

  • The plaintiff is entitled to redeem only the portion he purchased (18 2/7 pies) and must pay the apportioned parts of the principal Rs. 600 and the amounts due under the relevant later deeds as specified by the court for each branch/share.
  • The registered sale deed of 28 July 1920 plea was not permitted to be relied upon because it was raised belatedly; the court refused to allow the late plea and therefore did not give it effect to defeat the unregistered further charges.
  • The court ordered a fresh decree under Order XXXIV, rule 7 of the Code of Civil Procedure, granting six months for payment; interest at the stipulated rates will be calculated up to six months, and thereafter interest at 6% per annum will apply on the bonds of further charge in case of delay.

The opinion applies existing precedent (Aditya Prasad v. Ram Ratan Lal) and statutory provisions (section 50, Registration Act; Order XXXIV, rule 7, CPC) to the facts; it does not purport to lay down a new or novel legal proposition beyond the application of those authorities to the allocation of liability among the several branch shares in this particular factual matrix.

Show full summary ...

    Jagannath Kunwar v. Jaipal

    Mukerji, A.C.J and King and Niamat-ullah, JJ.:— This appeal has been referred to a Full Bench because of some difficult points of law involved in it. The facts of the case briefly are these. One Gobind Singh owned a 2 annas 8 pies share in several villages. He had eight sons, namely Rajpal, Ajit Ramghulam, Dindayal, Ramroshan, Harnam, Ahbaran and Kalu. All the sons except Rajpal made a usufructuary mortgage of a 2 annas 4 pies share for 15 years with one Harmangal Singh. Harmangal Singh is now represented by the defendants in the suit out of which this appeal has arisen. The plaintiff, who is the respondent No. 1 in this appeal, has sued to recover the entire property mortgaged, except a 2 pies share which was purchased by the mortgagee, on payment of a proportionate amount of the mortgage money, which was Rs. 600.

    The plaintiff is the purchaser of 18 2/7 pies and the share is made up in this way: He purchased the shares belonging to the branches of Dindayal, Ramroshan, Harnam and Ajit. It appears that Kalu's branch became extinct and the 4 pies share belonging to Kalu was inherited by the remaining seven branches. Thus the share of each branch was augmented by 4/7 pies. The four branches who sold their shares to the plaintiff thus became entitled to 4 × 4/7 pies in addition to their original shares. Thus the plaintiff has become entitled to 18 2/7 pies.

    The plaintiff's suit was met with the plea that at different dates, to be presently mentioned, different branches of the mortgagor's family executed certain deeds by way of a further charge and that the plaintiff could not recover the property claimed without payment of the money borrowed by, and due on foot of, these deeds of further charge. These documents are as follows:—

    (1) Mata Prasad Singh, grandson of Ajit, borrowed Rs. 99 from Harmangal on the 16th of July, 1884 and agreed to pay interest at 2 percent, per mensem. The money was repayable, initially, on the 27th of June, 1885, and in any case it was to be paid before the mortgage of 1883 was redeemed.

    (2) Deonarain Singh, a grandson of Harnam Singh, and Mata Prasad, a grandson of Ramghulam, mortgaged between them a 4 pies share to Harmangal for Rs. 85 on the 6th of September, 1884, and agreed as to payment in almost similar terms to those agreed to by Mata Prasad in document No. (1).

    (3) Bishnath and Jageshar Singh, sons of Ramroshan, borrowed Rs. 85 from Harmangal on the 11th of April, 1885, on terms similar to the documents Nos. (1) and (2).

    (4) Sheokumar Singh, son of Kalu Singh, borrowed Rs. 50 from Harmangal on the 4th of September, 1885, on terms similar to the terms of bonds Nos. (1), (2) and (3).

    The point that was seriously considered in the courts below was whether these four deeds created any charge on the properties mortgaged in 1883 and, therefore, the moneys due on these bonds were repayable at the time of redemption of the mortgage deed of 1883. The courts below have differed on this point. The learned Munsif was of opinion that documents Nos. (2) and (4) created a charge and documents Nos. (1) and (3) did not. The learned Subordinate Judge held that the documents Nos. (1) and (3) did not create a charge, that document No. (4) did create a charge and document No. (2), although it did create a charge, was not operative inasmuch as when the document was executed the integrity of the mortgage had not been broken.

    The documents have been translated for our benefit and we have perused them. They are more or less in the same language and the important portions of the language used are these: “When I redeem my zamindari share in taluqa Bibipur …, which is mortgaged for Rs. 600 to the aforesaid creditor …, I shall first pay this sum of Rs. 99, together with interest, and then I shall pay the mortgage money of the zamindari share. Until I pay up this amount I shall not sell or mortgage this mortgaged zamindari.” This is an extract from the document No. 1(1). In document No. (2) the following occurs: “When we redeem this mortgage (of 1883) we shall first pay up this amount, principal and interest, at the rate of 2 percent, per mensem. Until we pay this amount we shall not mortgage or sell the aforesaid zamindari.” (The following occurs in document No. (3): “When we or our heirs redeem the above-mentioned property (mortgaged in 1883) we shall first pay this sum, together with interest, then the mortgaged zamindari aforesaid will be redeemed. Until the principal and interest of this deed are paid we shall not mortgage or sell the aforesaid property.” The following is an extract from document No. (4): “When I redeem the mortgage (of 1883) I shall first pay up this sum, principal and interest, at the rate of 2 percent, per month. Until I pay up this amount I shall not mortgage or sell the aforesaid zamindari.”

    The agreement that the mortgagor shall pay the amount due on the subsequently executed bond before he redeems the prior mortgage is an agreement to create a charge on the property previously mortgaged. This was the view taken by their Lordships of the Privy Council in Aditya Prasad v. Ram Ratan Lal. In addition to the language which was found sufficient to their Lordships of the Privy Council to create a further charge, we have got the stipulation on the part of the mortgagors that they would not mortgage or sell the property previously mortgaged till the money due on the subsequently executed document had been paid. The stipulation meant that the previously mortgaged property was made security for the payment of the money subsequently borrowed. We are accordingly of opinion that all the four documents create farther charges on the property mortgaged in 1883.

    The learned counsel for the respondents has urged that according to certain facts, which will be presently stated, a sale deed of the 28th of July, 1920, by reason of the fact that it is registered and the four documents Nos. (1) to (4) are unregistered, has a priority over those documents under the provisions of section 50 of the Registration Act. It appears that certain descendants of Gobind Singh belonging to the branches of Dindayal, Ramroshan and Ajit sold their shares by the sale deed of the 28th of July, 1920, for a sum of Rs. 700 in favour of Ram Singh's branch and the plaintiff. The sale deed makes no mention of the four deeds of further charge enumerated above, although it mentions the mortgage of 1883 Jaipal the plaintiff and one of the purchasers under the deed of 1920, relinquished his rights acquired under the sale deed in favour of his co-vendees (descendants of Harnam's branch). Subsequently the members of Harnam's branch made a mortgage of the property acquired in 1920, and also their original shares, in favour of Jaipal. Jaipal brought a suit for sale on that mortgage and in execution of the decree that followed purchased the property himself. The argument, therefore, was advanced that the sale deed of 1920 for all practical purposes annulled, the four unregistered documents. This plea however; was not raised before the arguments were addressed in the court of the Munsif. The learned Munsif noticed the fact that the plea had been raised very late. The belatedness of the plea precluded, the defendants from raising the possible plea that the plaintiff made the purchase of 1920 with notice of the pre-existing unregistered documents. We find that the plaintiff purchased with members of Harnam Singh's branch, and Harnam Singh's branch belongs to the same family to which the vendors belong. It is quite possible, therefore, that Harnam Singh's branch, and through them the plaintiff, were all a ware of the existence of the four unregistered documents. The plaintiff, in our opinion, should have raised his plea, which he now wants to substantiate, as soon as the defendants pleaded the four unregistered documents. In our opinion we should not allow the plaintiff now to raise the plea.

    The next point to be considered is, what is the liability of the property under the four unregistered documents? Mr. Baleshwari Prasad has very correctly argued that for the purposes of determining the liability we should separate the several shares which belonged to the several branches. The fact that the defendants, the mortgagees under the deed of 1883, purchased a 2 pies share out of the property mortgaged to them broke up the integrity of the mortgage and, therefore, it is not open to the plaintiff to redeem more than the share purchased by him. That share, as we have already pointed out, is 18 2/7 pies.

    The document No. (1), the deed of further charge dated the 16th of July, 1884, was executed by Ajit Singh's branch and, therefore, the original 4 pies share of Ajit Singh can be redeemed only on payment of one-seventh of Rs. 600, the mortgage money under the deed of 1883, and the amount due under the document dated the 16th of July, 1884, document No. (1).

    Dindayal's original share of 4 pies is free from any further charge, because nobody belonging to his branch ever created any. Therefore the 4 pies share originally belonging to Dindayal may be redeemed on payment of only one-seventh portion of Rs. 600.

    Ramroshan Singh's original 4 pies share is charged under document No. (3). This will, therefore, be redeemable on payment of one-seventh of Rs. 600 plus the amount payable under the document of the 11th of April, 1885.

    As to the further charge created by the document No. (2), dated the 6th of September, 1884, that document was executed by two persons, namely Deonarain, grandson of Haraam, and Mata Prasad, grandson of Ramghulam. Ramghulam's 2 pies share is now in the possession of the defendants mortgagees. Harnam's 2 pies share is liable to be redeemed and it would be redeemable on payment of one-fourteenth portion of Rs. 600 plus one-half of the money due under the document No. (2) dated the 6th of September, 1884. The other half of Harnam's original share, namely 2 pies, is redeemable on payment of only one-fourteenth portion of Rs. 600.

    Kalu's 4 pies share was inherited to the extent of 2 2/7 pies by the four branches of the plaintiff's vendors. Kalu's successors created the further charge under the document No. (4) dated the 4th of September, 1885. The plaintiff would be entitled to redeem this 2 2/7 pies share on payment of four-sevenths share of one-seventh of Rs. 600 plus four-sevenths of the amount due under document No. (4) dated the 4th of September, 1885.

    We accordingly modify the decree of the courts below and make a decree under order XXXIV, rule 7 of the Code of Civil Procedure and grant six months' time for payment. A fresh decree will be prepared in this Court specifying the several amounts payable under the several documents in accordance with our judgment. The several portions redeemable under our decree will be specified separately, so that the different amounts chargeable to different properties may be clearly specified. Interest at the stipulated rate will be calculated up to the period of six months; thereafter interest will be payable, in case of delay in redemption, at 6 percent, per annum on the several bonds of further charge.

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    Comments

    Jagannath Kunwar v. Jaipal
    (Jan 13, 1933)