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Case Number

First Appeal No. 375 of 1937, from a decree of Bind Basni Prasad, Additional Civil Judge of Bulandshahr, dated the 24th of February, 1937.

Attorney(S)

Messrs S.K Dar and H.L Kapoor, for the appellant.
Sir Tej Bahadur Sapru and Dr. N.U.A Siddiqi and Messrs Shiva Prasad Sinha, K.C Mital, Jagnandan Lal and R.N Mukerji, for the respondents.

Judges

Sir Edward Bennet
Verma, JJ.

Acts

Transfer of Property Act before the Amendment Act of 1929 was the Act
Section 45, Amendment Act 20 of 1929 and that Section 45
Section 84, T.P. Act,
Section 83, T.P. Act

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Smart Summary

Summary of the Opinion (First Appeal by Munna Lal)

Factual and Procedural Background

The suit arose from a mortgage dated 4 June 1918 executed by Mt. Kirpa Devi in favour of Shambhu Nath for Rs. 40,650 at eleven annas per mensem with six monthly rests. Shambhu Nath died on 12 May 1919 and his widow, Mt. Bishun Devi, succeeded to his estate for life.

The principal controversy concerned a deposit/tender made under Section 83, Transfer of Property Act (T.P. Act). On 31 August 1921 Mt. Kirpa Devi executed another mortgage in favour of defendant 6, Shib Charan Das, for Rs. 64,250, leaving Rs. 50,203 to be paid to the prior mortgagee (Bishun Devi). On 5 September 1921 Shib Charan Das deposited Rs. 50,237-8-6 in the court of the Subordinate Judge of Meerut under Section 83 (this included a small sum for five days' interest).

Before the deposit could be withdrawn by Bishun Devi she died. A dispute arose between Munna Lal (the present plaintiff, who claimed to be a reversionary heir) and trustees appointed by Bishun Devi as to who was entitled to the deposit. Proceedings under Section 83 were initiated; by order dated 4 February 1922 the Subordinate Judge directed that the application under Section 83 should be filed. A few days later (8 February 1922) Shib Charan Das withdrew the deposit as the Section 83 proceedings had terminated.

Munna Lal later sued (Suit No. 272 of 1922 in Ludhiana) against the trustees to establish his title. In that suit Shib Charan Das again deposited money (application on 6 June 1925; deposit allowed 16 June 1925) and ultimately Munna Lal obtained a decree and withdrew the money under an order dated 13 December 1926.

The trial Court (Civil Judge) dismissed Munna Lal's suit in the present proceedings on two grounds: (1) that interest ceased to run after the deposit made on 5 September 1921 under Section 83, and (2) that the suit was time-barred. The plaintiff's original claim in the lower Court was for about Rs. 34,000; on appeal the claim had been reduced to Rs. 17,000.

Legal Issues Presented

Whether the tender/deposit of the full mortgage amount into Court under Section 83, T.P. Act on 5 September 1921 operated to stop interest from running on the mortgage debt despite a later withdrawal of the deposit by the depositor (Shib Charan Das).
Whether the amendment to Section 84 of the Transfer of Property Act made by Section 45, Amendment Act 20 of 1929 (the proviso that interest on principal is payable from date of withdrawal when mortgagor has deposited without previous tender and later withdraws) can be applied retrospectively to affect the rights arising under the unamended Section 84 in these transactions.
Limitation: whether the plaintiff's suit was barred by limitation (this was a ground on which the Court below dismissed the suit; however the appellate court did not need to decide on limitation after rejecting the substantive claim to interest).

Arguments of the Parties

Appellant (Munna Lal / his counsel)

The appellant contended that interest did not cease to run after the deposit of 5 September 1921 because the money was subsequently withdrawn by Shib Charan Das; therefore, interest should be payable for various periods after that tender.
Learned counsel for the appellant argued that the spirit (and effectively the effect) of the proviso introduced into Section 84 by the Amendment Act (Section 45, Amendment Act 20 of 1929) should be applied to the unamended Section 84 in the present case—i.e., that withdrawal by the depositor should give rise to an entitlement to interest from the date of withdrawal.

Respondents / Other parties

The trustees and other opposite parties asserted entitlement to the deposited sum after Bishun Devi's death; there was a factual dispute as to the person entitled to withdraw the deposit.
It was effectively asserted (and accepted by the Court) that Shib Charan Das had done what he could to tender the mortgage money under Section 83 promptly after acquiring the mortgage, and that the deposit properly stopped interest from running from the date of deposit.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hukam Singh v. Babu Lal (1922) 9 AIR All. 181	Held that where the full amount due under a mortgage is paid into Court under Section 83 and the mortgagee (having received notice) refuses to accept the deposit and the mortgagor subsequently withdraws the deposit, interest will not run; the subsequent withdrawal does not affect the rule that interest ceases on deposit.	The Court regarded this Allakhbar (All.) decision as authoritative for the unamended Act and followed it in holding that interest ceased to run from the date of deposit (5 Sept. 1921) and that the later withdrawal did not revive the obligation to pay interest.
Velayuda Naicker v. Hyder Hussain Khan (1910) 33 Mad 100	A precedent followed in Hukam Singh: supports the conclusion that a deposit under the unamended Section 83, followed by withdrawal by the mortgagor, does not revive interest.	The Court noted that Hukam Singh followed this Madras ruling and, through Hukam Singh, applied the same principle to the present facts.
Krishnasami Chettiar v. Ramasami Chettiar (1912) 35 Mad 44	A Madras ruling reaching a contrary conclusion to Velayuda Naicker.	The Court noted that Hukam Singh did not follow Krishnasami Chettiar; accordingly Krishnasami Chettiar was not followed by this Court and did not govern the outcome.
Ramabhadra Thevar v. Arunachalam Pillai (1926) 13 AIR Mad 601 (Full Bench)	The Madras Full Bench held that where a proper deposit is made and the mortgagee after notice refuses to accept it and the mortgagor withdraws, there is a presumption that the mortgagor remained ready and willing to pay; the onus lies on the mortgagee to prove otherwise; interest would not run after deposit and withdrawal does not affect that rule.	The Court observed that this Full Bench decision aligns with the view that interest ceases on deposit and that withdrawal does not revive interest; it therefore reinforced the conclusion adverse to the appellant under the unamended Act.

Court's Reasoning and Analysis

The Court proceeded in two principal strands of reasoning: (A) statutory/legislative construction concerning the effect of the 1929 amendment to Section 84, and (B) application of existing case-law under the unamended Act to the facts of the case.

A. On the amendment: learned counsel for the appellant urged that the spirit of the proviso added to Section 84 by Section 45 of the Amendment Act (20 of 1929) should be applied to the unamended Section 84 in the present case. The Court rejected this approach for the following reasons (all expressed in the opinion):

The Amendment Act's Section 45 (which amended Section 84) is not listed in Section 63 (the transitional provision) and Section 63 does not by itself make unlisted amendments retrospective.
Generally, an amendment does not have retrospective effect unless the amending statute explicitly provides for retrospective application; there is no such explicit retrospective provision here.
To make the proviso retrospective would pose difficulties about the extent and manner of retrospectivity; because the amendment did not spell out retrospective effect, the Court inferred that the legislature intended it not to be retrospective.
Consequently, the Court declined to apply the 1929 amendment to transactions governed by the unamended Act.

B. On the unamended Act and precedents: the Court examined the authorities under the unamended Section 84/Section 83 regime. The Allakhbar decision in Hukam Singh v. Babu Lal established that a proper deposit under Section 83 stops interest from running and that a later withdrawal by the depositor does not revive interest. Hukam Singh followed Velayuda Naicker and did not follow a contrary Madras decision (Krishnasami Chettiar). The Madras Full Bench in Ramabhadra Thevar also supported the proposition that deposit stops interest and withdrawal does not affect that rule.

Applying the authorities, the Court found that Shib Charan Das had promptly taken the necessary steps to tender the mortgage money by making the deposit under Section 83 almost immediately after acquiring the mortgage. The subsequent factual complications (the death of Bishun Devi, the dispute between the trustees and Munna Lal, and Munna Lal's own applications in the Section 83 proceedings) made it legitimate for Shib Charan Das to withdraw the deposit after the Section 83 proceedings terminated and to re-tender in the later suit proceedings.

The Court also relied on Munna Lal's own earlier conduct: in an application dated 13 January 1922 Munna Lal had indicated that the money might be returned to Shib Charan Das or kept in deposit until determination of title, and generally expressed willingness to permit return or deposit pending determination — conduct inconsistent with his later claim for interest on the ground that withdrawal revived interest.

For these reasons, following the binding and persuasive authorities under the unamended Act, the Court concluded that interest ceased to run from 5 September 1921 (the date of deposit) and that no case had been made out for the appellant's claim to interest thereafter.

Holding and Implications

DISMISSED — The first appeal is dismissed.

Direct holdings and consequences:

The appellant Munna Lal is not entitled to interest after the deposit made on 5 September 1921; interest ceased to run from that date.
The appellate Court did not apply the 1929 amendment (Section 45) to the facts governed by the unamended Act; the amendment was held not to operate retrospectively in the absence of explicit legislative provision to that effect.
The Court followed the established case-law under the unamended Act (notably Hukam Singh and allied Madras Full Bench authority) in reaching its decision.
The Court below's dismissal of the suit on the substantive ground (no entitlement to further interest) was upheld; because the Court rejected the substantive claim the appellate counsel did not argue the limitation point and the Court did not decide it on the merits.
Costs: the appellate Court followed the lower Court's procedure and allowed separate costs for each set of defendants-respondents.

The opinion expressly states that, so far as this Court and the Madras Court were concerned, the case-law under the unamended Act was against the appellant and that no case had been made out for the appellant's claim to interest. No novel legal principle was announced; the decision applied existing authorities to the facts.

Judges

The written opinion includes a judgment delivered by Verma, J., and contains an additional concurring judgment (paragraphs 6–12) by the other member of the bench, who agreed that the appeal is without force and should be dismissed.

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Munna Lal v. Chetan Prakash

1. This is a first appeal by the sole plaintiff Munna Lal whose suit has been dismissed by the learned Civil Judge. The mortgage in suit was dated 4th June 1918 executed by Mt. Kirpa Devi, widow of Raghunath Prasad, in favour of Shambhu Nath, mortgagee. The amount was Rupees 40,650 at eleven annas per mensem with six monthly rests. The document is printed on page 43 et seq. The main defence was that there had been a tender under Section 83, T.P. Act, by Shib Charan Das, defendant 6, on 5th September 1921 of Rs. 50,237-8-6 for payment, but that sum had not been withdrawn by the mortgagee. Subsequently there was payment of the amount which was withdrawn by the present plaintiff. The present plaintiff claims however that interest did not cease to run by the tender of 5th September 1921 under Section 83, T.P. Act, as the money was subsequently withdrawn by Shib Charan Das, defendant 6, and the claim is for various periods of interest after that tender. The claim has been disallowed in full by the Court below. The claim before it was for Rs. 34,000. In appeal the amount has been reduced to Rs. 17,000.

2. The details are that on p. 49 there is a mortgage dated 31st August 1921 by Mt. Kirpa Devi for Rs. 64,250 in favour of defendant 6, Shib Charan Das, leaving with him Rs. 50,203 to be paid for the full satisfaction of the mortgage in the present suit. After the registration of that document, on 5th September 1921 defendant 6 made a deposit in the Court of the Subordinate Judge of Meerut adding a small sum of Rs. 34-8-6 for the interest on the intervening five days, the total deposit being Rupees 50,237-8-6. The original mortgagee Shambhu Nath died on 12th May 1919 and was succeeded by his widow Bishun Devi. The deposit was made in the name of this lady, who was alive on the date of deposit, but it so happened that before she received notice and could withdraw the money she died. The exact date of her death is not given but these facts are admitted. It may be noted that on page 55 of the paper book No. 13 in the array of the opposite parties in the application under Sec. 83, T.P. Act, was the present plaintiff Munna Lal. The other persons in that application Nos. 2 to 12 were trustees of a trust created of the property left by L. Shambhu Nath and the opposite party No. 1 was Mt. Bishun Devi. Therefore on her death the question was whether the plaintiff Munna Lal was entitled to withdraw the money or the trustees. On p. 59 there is an application by Munna Lal in the proceeding under Section 83, T.P. Act, claiming that he was entitled. On the other hand, the trustees claimed that they were entitled.

3. Some question arose as to whether the money would be placed in deposit in the Allahabad Bank at Meerut and there was no agreement on this point and eventually by an order Ex. 4 dated 4th February 1922 the Subordinate Judge stated that as the parties did not agree on the point the application should be filed. This means that the application under Section 83, T.P. Act, should be filed. A few days later, on 8th February 1922, defendant 6 withdrew the money as the proceedings under Section 83 had terminated. On 29th November 1922, Munna Lal brought a suit, No. 272 of 1922, against the trustees in the Court of the Senior Subordinate Judge of Ludhiana in the Punjab. In this suit there was an application made as shown on p. 73 by defendant 6. Shib Charan Das, on 6th June 1925 for the deposit of Rs. 50,000, which deposit was allowed with the consent of parties on 16th June 1925, and the amount was deposited in the bank as shown on p. 77. The plaintiff obtained a decree in his favour in this suit and eventually the plaintiff on p. 79 withdrew the money under an order dated 13th December 1926. The plaintiff has made in the present suit claims for interest for various periods between the dates 5th September 1921 of the original deposit and the date of his withdrawal under the order of 13th December 1926. The Court below has dismissed the suit on two grounds, one that the plaintiff was not entitled to obtain any interest after the deposit on 5th September 1921 by defendant 6, and secondly that the present suit is time-barred. The Transfer of Property Act before the Amendment Act of 1929 was the Act in force at the time of these transactions. In section 84 of this act, there was no provision in regard to the withdrawal of a deposit by a person who had made the deposit. Such a provision no doubt is contained in the amended Act and is as follows:

Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal money shall be payable from the date of such withdrawal.

4. Learned counsel for appellant argues that the spirit of this proviso should be applied to the unamended section 84 in the act. We do not think that we can apply the spirit of an amendment or the letter of an amendment in this manner. Learned counsel points out that the' amendment to Section 84 was contained in Section 45, Amendment Act 20 of 1929 and that Section 45 is not one of the Sections mentioned in Section 63. That is so, but all that Section 63 provides is that nothing in certain Sections shall be deemed in any way to affect certain things that have previously happened. The Section does not provide that the other Sections not mentioned in that Act are to have any retrospective effect. An amendment will not in general have any retrospective effect unless it is specifically provided that the amendment is to have a retrospective effect. There is nothing in the amendment of Section 84, T.P. Act, which enacts that amendment is in any way to be retrospective. To make such a proviso retrospective would involve certain difficulties and it would have to be definitely stated how far it was to be retrospective and with what effect. Clearly, as there is no provision on these points, the intention was that it should not be retrospective. We do not think therefore that the amendment can affect the case before us. The case-law on the point under the unamended Act is as follows:

5. In Hukam Singh v. Babu Lal (1922) 9 AIR All. 181 it was decided that where the full amount due under a mortgage had been paid into Court under Section 83, T.P. Act and the mortgagee who had received notice had refused to accept the deposit and the mortgagor subsequently withdrew the deposit then interest would not run and the withdrawal did not affect this provision that interest would not run. In arriving at this decision the Court followed the ruling in Velayuda Naicker v. Hyder Hussain Khan (1910) 33 Mad 100, and did not follow the ruling in Krishnasami Chettiar v. Ramasami Chettiar (1912) 35 Mad 44. This appears to be the only ruling of this High Court on the subject. The Madras rulings which had differed were the subject of a decision by a Full Bench of the Madras High Court in Ramabhadra Thevar v. Arunachalam Pillai (1926) 13 AIR Mad 601 It was laid down that where a proper deposit had been made and the mortgagee after notice of the deposit refused to accept it and the mortgagor thereafter withdrew the deposit there was still a presumption that the mortgagor continued ready and willing to pay and this presumption cast the onus of proof on the mortgagee to prove the contrary. Therefore in such a case the interest would not run after the deposit, and the withdrawal would not affect this provision. The case-law therefore under the unamended Act was, so far as this Court and the Madras Court are concerned, against the appellant. We find that no case has been made out for the claim of the appellant to interest. As we do not accept the case for the appellant on this point learned Counsel did not argue the case in regard to limitation, We therefore dismiss this first appeal. In regard to costs we follow the procedure of the Court below as there are two sets of defendants-respondents and we allow separate costs of each set of defenddants-respondents.

Verma, J.

6. I agree that the appeal is without force and should be dismissed. The only point urged before us is that interest did not cease to run after the deposit under Section 83, T.P. Act., because Shib Charan Das subsequently withdrew the money after the proceedings under Section 83 had terminated. It is argued that Shib Charan Das ought to have left the money in Court even after the termination of the proceeding and that as he did not do so, he is liable to pay interest. It seems to me that this argument is not open to the plaintiff Munna Lal. The material facts bearing on this point are these. As will appear from the judgment delivered by my learned brother the mortgage in suit was executed by one Mt. Kripa Devi in favour of one Shambhu Nath on 4th June 1918. Shambhu Nath died shortly afterwards and his widow Mt. Bishun Devi succeeded to his estate for life by right of inheritance as a Hindu widow. She executed a deed of trust in respect of the property that she had inherited from her deceased husband and appointed trustees. In the meantime, the mortgagor, Mt. Kripa Devi had on 31st August 1921 executed another deed of mortgage in favour of the present defendant 6, Shib Charan Das, for Rs. 64,250 and out of the mortgage money had left the sum of Rs. 50,203 in the hands of Shib Charan Das for payment to the prior mortgagee, Mt. Bishun Devi.

7. On 5th September 1921 Shib Charan Das made an application under Section 83, T.P. Act, and deposited Rs. 50,237-8-6 the excess representing the interest for the intervening five days. He impleaded as opposite parties to this application Mt. Bishun Devi and the trustees and prayed that the money may be paid over to the party who may be entitled to it and the mortgage 'may be caused to be redeemed.' Mt. Bishun Devi died within a few days of the presentation of this application and the plaintiff-appellant Munna Lal then appeared on the scene. He was impleaded as an opposite party to the application under Section 83. He made an application (Ex. B-6, p. 59 of the paper-book) stating that he was the reversionary heir to the estate of Shambhu Nath and that he had applied to the District Judge in respect of that estate under Act 19 of 1841 and praying that the money deposited by Shib Charan Das be given to him or may be kept in deposit in the Court till the determination of his rights. The trustees, on the other hand, filed an application asserting that they were entitled to the money and they also filed the mortgage deed along with their application (vide Ex. B-1 dated 9th November l92l). Certain discussions as to whether the money should or should not be deposited in a bank followed. On 13th January 1922 Munna Lal made an application (Ex. 1-6, p. 69 of the paper-book) in which he stated that he had been directed by the Court of the District Judge to bring a regular suit to establish his title to the estate of Shambhu Nath, deceased, and that he proposed to do so shortly. He prayed that either the parties may under order dated 7th January 1922 be directed to obtain succession certificate, or the money may be returned to Lala, Shib Charan Das from whom it can be realized again; otherwise the opposite party, the trustees who are not entitled to get the same under any law, would squander it away....

8. He also prayed that he be granted more than one month's time to enable him to bring a regular suit for declaration of his title and made the further suggestion that till the disposal of the case the sale amount might remain in deposit in the Court or it might be deposited in some bank to the credit of the Court.

9. On 4th February 1922 the Court ordered Shib Charan Das's application to be "filed Hukam Singh v. Babu Lal (1922) 9 AIR All. 181". The proceedings thus came to an end. A few days later Shib Charan Das withdrew the amount and subsequently tendered it again in the Court in which Munna Lal filed his suit for declaration of title. As has already been mentioned by my learned brother, this suit was subsequently decreed in favour of Munna Lal and it was under the orders of that Court that Munna Lal withdrew the money which had been deposited by Shib Charan Das in that Court. In my judgment Munna Lal having himself expressed in his application dated 13th January 1922 his willingness to the money being given back to Shib Charan Das and to its remaining in deposit with him until the settlement of the dispute among those who claimed title to the estate of Shambhu Nath, the argument now advanced by learned Counsel cannot be accepted.

10. I entirely agree with the Court below in holding that Shib Charan Das did all that could possibly be done to tender the mortgage money to whomsoever who might be entitled to it. That there was dispute among those who claimed title to it was no fault of his. He took proceedings under Section 83, T.P. Act, almost immediately after the execution of the mortgage deed in his favour by Mt. Kripa Devi. Those proceedings proved infructuous as Mt. Bishun Devi died and there arose a dispute between the trustees appointed by her and Munna Lal. When those proceedings came to an end, he withdrew the money which he had deposited in that Court, but he tendered it again in the Court at Ludhiana where Munna Lal had filed his suit against the trustees. I am of opinion that, in the circumstances mentioned above, interest ceased from 5th September 1921.

Munna Lal v. Chetan Prakash

Summary of the Opinion (First Appeal by Munna Lal)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant (Munna Lal / his counsel)

Respondents / Other parties

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Judges

Munna Lal v. Chetan Prakash

Comments