Das, J.:— The defendants first party are the appellants and they complain of the decree passed against them by the learned Subordinate Judge. The admitted facts are as follows: The defendants second party who are the owners of certain shares in a village called Ambasarai, borrowed Rs. 16,993 from the appellants and as a security for the loan mortgaged the village Ambasarai to them. This transaction took place on 24th May, 1901. Subsequent to this transaction the defendants second party created several mortgages on the same property in favour of the plaintiffs. On 6th July, 1905 however the defendants second party executed a thika patta in favour of the defendants first party, appellants before us, who it must be remembered were the first mortgagees in respect of the property in dispute.
2. The property while in the possession of the defendants first party was sold for non-payment of January and March kists of Government revenue amounting to Rs. 174 and it was purchased by the defendants first party for Rs. 20,200. The plaintiffs who are completely defeated by the purchase made by the defendants first party brought this action for a declaration that the sale was brought about by a fraud committed by the defendants first and second parties and was accordingly illegal and void and for setting aside of the said sale.
3. In my view the question involved in this appeal depends on whether the defendants first party are chargeable as mortgagees in possession. In order to determine this point it is necessary to consider the terms of the thika patta in their favour by virtue of which they remained in possession of the property. The thika patta was for 19 years from 1313 Fasli to 1331 Fasli. It provided that the lessees should in respect of the lease pay a consolidated and uniform annual jama of two thousand rupees and that the payment should actually be made to Firangi Bhagat in liquidation of the principal and interest covered by a roka dated the 1st Ashar 1312 Fasli, and the principal, interest and compound interest covered by the registered mortgage bond dated 24th May, 1901. It is necessary at once to point out that Firangi Bhagat was the karta of the joint family of which the defendants first party were members and that the mortgage bond dated 21th May, 1901 shows that though it was taken in the name of Firangi Bhagat it was for the benefit of the entire joint family. It will appear therefore that the lease was executed in favour of the defendants first party and it provided that the annual rent of Rs. 2,000 should be paid throughout the term of the lease to the defendants first party (and not to the lessors) in liquidation of the debt due to them by the lessors. There is in this document no provision as to the payment of Government revenue and it was argued by Mr. Hasan Imam on behalf of the appellants that the obligation to pay the Government revenue was on the lessors. In my view Section 76 of the Transfer of Property Act, applies to the facts of this case. The mortgagees did undoubtedly take possession of the mortgaged property during the continuance of the mortgage and accordingly in the absence of a contract to the contrary it was their duty out of the income of the property to pay the Government revenue payable in respect of the property. In coming to this conclusion I am not forgetting that a mortgagee is not chargeable as a mortgagee in possession if he enters as a lessee of the property. It is clear on the authorities that when the possession is in respect of the tenancy a mortgagee cannot be charged as a mortgagee in possession. But the case of a mortgagee entering into possession by virtue of a lease and paying rent to the lessor must be distinguished from the case of a mortgagee entering into possession no doubt by virtue of a lease but appropriating the rent due to the lessors to the reduction of the debt due to him. We must have regard to the substance and not to the form of the transaction between the mortgagors and mortgagees. When the terms of the thika patta are carefully analyzed the substance of the transaction would appear to be that the mortgagees took possession in their own interest in order that the debt due to them might be paid off.
4. In the next place there is authority for the proposition that a prior mortgagee taking a lease subsequent to the puisne mortgage ought to be charged as a mortgagee in possession. The principle upon which the doctrine rests is that the rights of the puisne mortgagee against the estate could not to affected after the date of his security by any dealing between the mortgagor and the first mortgagee. This will appear from the case of Gregg v. Arrott(1), cited at para. 433 of Fisher on Mortgages.
5. The position therefore is this: the defendants first party have taken a lease subsequent to the mortgages created in favour of the plaintiffs. The whole object of this lease was to create an additional security in favour of the defendants first party. The defendant first party undoubtedly took possession of the mortgaged property during the continuance of the mortgage. In my view, Section 76 of the Transfer of Property Act, must apply.
6. That being so prima facie, it was the duty of the defendants first party to pay the Government revenue in respect of the property in dispute. But Mr. Hasan Imam, on behalf of the defendants first party, maintained that there was a contract between them and the defendants second party by which the defendants second party agreed to pay Government revenue in respect of the land, and he further argued that on the construction of the thika patta itself it would appear that the defendants second party must have undertaken to pay the Government revenue.
7. So far as the thika patta is concerned, I am unable to see that there is anything in it to show that the defendants second party did in fact undertake to pay the Government revenue. No doubt the whole of the rent reserved was to go to the lessees in reduction of the debt due to them; but the Government revenue is payable out of the income of the property. I see no inconsistency at all between the lessors consenting to the lessees appropriating every pice of the rent reserved in reduction of the debt due to them, and at the same time insisting upon the lessees paying the Government revenue. It is found by the learned Subordinate Judge that the income of the property is Rs. 3,000, and it would therefore appear that there were ample funds in the bands of the defendants first party out of which the Government revenue could be paid. On the construction of the thika patta therefore I am unable to say that there was any agreement either way as to the payment of Government revenue.
8. Next as to the agreement between the parties outside the document. Mr. Hasan Imam's case is that from 1905 till September 1912 the defendants second party did pay the Government revenue in respect of the property. He admits that the defendants first party paid the Government revenue from September kist 1912 to September kist 1914, that is to say, for two years prior to the time when the property was actually sold for non-payment of Government revenue. Mr. Imam's argument is that in order to see what the contract between the parties was we must consider the unequivocal acts directly following, the execution of the thika patta in his favour. With this contention I entirely agree. If it can be shown that directly after the execution of the thika patta the defendants a ??? party for years paid the Government revenue in respect of the property in suit, then it must follow that they undertook to pay the Government revenue. The critical question therefore is Did the defendants second party at any time after the execution of the thika patta pay the Government revenue in respect of the property in suit?
9. Mr. R.L Dutt, on behalf of the plaintiffs, says that the defendants first party at one stage denied ever having paid any Government revenue in respect of the land in dispute and that it was only when they, the plaintiffs, produced the chalans in respect of the period from September kist 1912 to September kist 1914, showing conclusively that for this period the defendants first party undoubtedly paid the Government revenue, that the defendants first party changed their case, as they were bound to do, and admitted that they did pay the Government revenue for this period. Mr. R.L Dutt is clearly right in saying that at one period the case of the defendants first party was that by an agreement between them and the defendants second party the defendants second party undertook to, and did in fact, pay the Government revenue in respect of the land in dispute. This will appear from para. 11 of the plaint filed by the defendants first party in Suit No. 373 of 1915, which was a suit filed by them to enforce the mortgage executed in their favour by defendants second party (cited in that suit as defendants first party) in 1901. Mr. Kulwant Sahay on behalf of the appellants objected to my looking at the plaint filed in another suit in considering the arguments in this appeal. Now that suit has culminated in Appeal No. 179 of 1917, and that appeal is being heard analogously with this appeal. I am of opinion therefore that I am an titled to look at the plaint filed in that suit. Now para. 11 of the plaint filed in Suit No. 373 of 1915 runs as follows:
“That there was an agreement between the plaintiffs and defendants first party that the latter would pay the Government revenue for and other Government demands in respect of the mortgaged property, viz., the leasehold property. Therefore no provision regarding the liabilities on the plaintiffs for payment of Government demands in respect of the mortgaged property was laid down in the thika lease, dated 19th Ashar 1312 Fasli. Defendants first party as proprietors and zamindars of the mortgaged property, have been liable for the payment of Government demands and they have been paying the same.”
10. There is no suggestion at all in that paragraph that the defendants first party (the plaintiffs in that action) ever at any time paid Government revenue in respect of the land in dispute. It was then that the defendants produced the chalans tr two years in respect of the September kist 1912 to September kist 1914, The chalans are Exs. A to A-5 and they clearly show that the defendants first party paid the Government revenue for two years prior to the sale. As regards the chalans prior to those produced by the plaintiffs the evidence is that they have been destroyed in the Collectorate. This is the sworn testimony of their witness 6 and I see no reason whatever to disbelieve this testimony. The position therefore is this: The defendants first party now admit that they have paid the Government revenue for two years prior to the sale, but they admit it only because the plaintiffs have produced the documents making it impossible for the defendants first party to deny this fact. They still deny that they paid any Government revenue prior to September kist 1912. But as Mr. R.L Dutt argued before us, it is only possible for them to make this case because the plaintiffs have not been able to produce the documents, through no fault of their own, to contradict this case. So far as the actual oral evidence in this case is concerned, there is the statement on behalf of the defendants first party that they never paid Government revenue prior to September kist 1912. There is, on the contrary, the oral evidence on behalf of the plaintiffs that the defendants first party admitted to them that they all along paid the Government revenue in respect of the land in dispute. In favour of the plaintiffs is this circumstance that the admission of the defendants that they paid the Government revenue for two years only came after the production of the necessary documents by the plaintiffs. Having regard to all these circumstances, I am of opinion that the defendants first party have not established that there was a contract between them and the defendants second party that the Government revenue should be paid by them. That being so, there as a statutory duty on them to pay the Government revenue. In my view therefore the defendants first party are chargeable as mortgagees in possession and chargeable for their failure to may the Government revenue in respect of the kists for which the property was ultimately sold. It is unnecessary in this case to determine what the consequence would have been if the property had passed into the hands of third parties. But the property being now in the hands of the defendants first party, the only decree that we can pass in this case is that the defendants first party must he regarded as having privately purchased the property from defendants second party. We are discussing this question at the instance of the plaintiffs and not at the instance of the defendants second party and therefore it is not necessary to consider whether the defendants first party should be regarded as holding the property in trust for the defendants second party. That question does not arise as the defendants second party have not invited us to consider that question. The question is between the plaintiffs who are the subsequent mortgagees and the defendants first party who are the prior mortgagees. All that I can say now is that the purchase made by the defendants first party cannot, having regard to the position in which they stood with reference to the plaintiffs, be regarded as free from the mortgages in favour of the defendants second party. I hold therefore that the decree passed by the learned Subordinate Judge is right and ought to be affirmed.
11. It appears that there are deficit court-fees amounting to Rs. 870 due from the plaintiffs respondents. We direct that the plaintiffs-respondents do pay the deficit court tees at once. In default they will not be permitted to execute the decree.
12. Adami, J.:— I agree.
V.S/R.K
13. Appeal dismissed.