Batchelor, A.C.J:— This was a suit to redeem a mortgage. The mortgagee, who had gone into possession, claimed to be entitled to recover upon redemption the costs of a certain lasting improvement which, as he alleged, he had made in the property. The property mortgaged was agricultural land, and the lasting improvement claimed by the mortgagee was the sinking of a well in this land. Admittedly the well was sunk, and though the exact effect of the sinking of it on the character of the land has not been determined, it appears from the judgment of the trial Court that there is good reason to suppose that the profits of the land were increased by reason of the sinking of the well. The mortgagee's claim on this head has been disallowed by both the lower Courts, and this appeal is consequently brought by the mortgagee, who contends that, oh the facts found, he ought to be held entitled to cast upon the mortgagor the reasonable costs incurred by him in the digging of the well.
The point is not perfectly clear by reason of the silence of the Transfer of Property Act upon the question of the mortgagee's rights to recover from his mortgagor the reasonable and proper costs of lasting improvements. It is consequently contended on behalf of the respondents that a mortgagee in India is not entitled to make any such claim. In support of that argument counsel cited the decision of the Madras High Court in Arunachella Chetti v. Sithayi Ammal. No doubt if reference be made to the phraseology of section 72 of the Transfer of Property Act, there is room for the contention that the mortgagee is not entitled to improve the property, though he may spend money in preserving it, and in managing it, as a person of ordinary prudence would manage it, as he is required to do under section 76. I am also bound to admit that I do not think that the case before us can fairly be brought within the purview of section 63 of the Act, which makes provision for accessions to mortgaged property.
I think we are confronted with the plain question whether the silence of the Transfer of Property Act upon this point should lead the Court to decide that a mortgagee in India is never entitled to recover from his mortgagor the reasonable costs incurred in lasting improvements. In my opinion this question should be answered in favour of the mortgagee. If the Indian Statute had expressly deprived the mortgagee of this right, there would of course be an and of the matter. But the Statute has not done so, and from its mere silence I am not prepared to infer that the intention of the Legislature was that this right should never be recognised. The right was considered by the Privy Council in Henderson v. Astwood, where Lord Macnaghten, in delivering the judgment of the Board, in speaking of the then mortgagee, one Davies, says: “It would be contrary to common justice to deprive Davies of the benefit of the money laid out by him on those improvements, so far as they enhanced the value of the premises.” Then reference was made by his Lordship to Shepard v. Jones, where the whole law on this subject, as it prevails in England, is expounded by the Court of Appeal. It seems to me probable that the silence of the Indian Legislature upon this point is to be ascribed rather to a desire to confine the codified law to broad general provisions than to a deliberate design to deprive the mortgagee in suitable cases of that which their Lordships of the Privy Council regard as common justice.
I think, therefore, that the lower appellate Court's decree must be reversed, and there must be a remand of the case to the District Court in order that all the requisite questions may be considered and decided. These questions of fact will be: (1) What sum of money was spent by the mortgagee on the digging of the well? (2) Was that a reasonable and proper sum for a mortgagee to spend, having regard to the total value of the property mortgaged? And (3) Was the well a lasting or permanent improvement enhancing the value of the property? If all these questions are answered in the mortgagee's favour, then, in my opinion, he is entitled to recover the fair amount of his expenditure from the mortgagor in so far as it has enhanced the value of the property, in addition to Rs. 600 found due at the foot of the mortgage. Costs costs in the suit.
Marten, J.:— I agree. As regards the point under the Transfer of Property Act, I think that the silence of the Act does not prevent us from doing what is spoken of by their Lordships of the Privy Council in Henderson v. Astwood, as common justice, namely, in a proper case to allow a mortgagee the benefit of money laid out by him, so far as it has enhanced the value of the mortgaged property.
As regards the merits of the case, so far as we have them before us, I may repeat what Sir George Jessel said in Shepard v. Jones: “All I can say is, that there being in my opinion a prima facie case that the property was increased in value, it is fair that there should be an inquiry to ascertain whether it was so increased. Of course that inquiry will be whether any and what sum ought to be allowed in taking the accounts of the defendant by reason of lasting improvements, and that will leave the whole case open.” I, therefore, agree with the inquiries which my Lord the Chief Justice has directed to bring out these points.
I will only add that in allowing costs of improvements the Court must naturally be on its guard against extravagant or unfounded claims. It was said in argument that if we were to allow a mortgagee to charge for improvements, the Courts might be exposed to all sorts of extravagant demands on the part of mortgagees. The answer is that the Court should inquire strictly into the bona fides and fairness of the claim in each particular case.
Decree reversed and case remanded.
J.G.R