1. The plaintiff is the owner of a house subject to a mortgage in favour of the defendant executed by the plaintiff's assignor. The plaintiff's assignment is dated 1st December 1913, and he alleges that on 29th November 1913 he tendered to the defendant the amount of principal and balance of interest then due to her under her mortgage and brings this suit for redemption of the mortgaged property.
2. The plaintiff's assignor brought a previous suit, No. 88 of 1910, for redemption and by an order thereon, dated 3rd May 1910, it was directed that upon payment by her to the defendants therein of their respective costs the plaintiff “do have leave to withdraw from this suit.” These costs have not been paid, and issue 2 in this case raises the question whether the defendant is entitled to add the amount thereof to the mortgage moneys. The order of 3rd May 1910 is conditional upon the payment of costs, and since the condition remains unfulfilled it might be argued that the former suit is still pending and that the present suit does not lie; but this point has not been raised by the defendant. The order does not direct payment of the costs by the mortgagor personally, and therefore has not in any way affected the liability, if any, of the mortgagor; and the cases cited on behalf of the plaintiff may be distinguished on this ground. It is an undoubted rule of equity that in taking the account between a mortgagor and mortgagor the former is entitled to be reimbursed all moneys properly and reasonably expended by him with reference to the mortgaged property. The payment of such expenses may be regarded as an implied term of the mortgage contract, or as a condition imposed by a Court of equity upon the party who has invoked its assistance, and the amount is added to the sum due on the security: see National Provincial Bank of England v. Games(1). It is obvious that if a decree for redemption were made without taking such expenses into account, and the mortgagee were driven to proceed against the mortgagor personally for the amount, the result might be to diminish pro tanto the amount of principal and interest which the mortgagee is entitled to receive under his security.
3. For these reasons I think that the term “mortgage money” in Sections 58, 60 and 92 of the Transfer of Property Act, 1882, must be taken to include all moneys which, on taking an account between the parties, may be properly allowed to the mortgagee.
4. It has been argued on behalf of the plaintiff that S. 72 provides for the allowance of certain moneys expended by a mortgagee in possession and their addition to the mortgage security and that the absence of a similar provision with respect to other mortgages indicates the intention of the legislature that the latter should not have the same right. The preamble of the Act shows that it is not a consolidating statute, and I am of opinion that the right of a mortgagee to a general account of the moneys due to him under the mortgage contract is saved by the provisions of S. 2(b) and that his right has not been cut down to an account merely of the principal sum and interest by the section to which I have already referred.
5. The costs in question were caused by proceedings taken by the mortgagor and would have been added to the defendant's security if those proceedings had been brought to their proper conclusion and I therefore hold that the mortgagee is entitled to include them in her account and answer issue 2 in the affirmative.
6. Issue 1 is whether the plaintiff tendered a sum mentioned in the plaint. The evidence is that this sum and the letter, Ex. B, were offered to the defendant by an apprentice of the plaintiff's vakil on 29th November 1913 and that she refused to receive both the money and the letter. Ex. B and the form of receipt enclosed therewith contemplate that the receipt of this sum should be endorsed upon the mortgage-deed, and therefore that the deed so endorsed should be delivered to the plaintiff. P.W 1 states that he told the defendant that he would be satisfied with the receipt without the papers and did not ask for any papers to be returned; but his instructions clearly were to obtain an endorsed receipt and he could not obtain the receipt which he demanded without the mortgage-dead.
7. The tender was accordingly conditional upon the endorsement, cancellation and delivery of the mortgage-deed. Since the defendant was entitled to retain the deed uncancelled as security for payment of her costs, and since the plaintiff had not at that time obtained an assignment of the property from his vendor, and was not entitled to possession of the title-deeds, the plaintiff had no right to impose this condition upon his offer, and I therefore hold that there was no valid tender and answer issue 1 in the negative.
8. This sum has been paid by the plaintiff since the institution of the suit and therefore there will be the usual decree for redemption upon payment of the sum of Rs. 96-4-0 with interest at 6 per cent from 24th January 1913, and also the costs of this suit, within one month. [As owing to a slip, the judgment did not give interest from date of tender to payment into Court, an application for review was made and granted. The interest claimed was accordingly decreed.]
S.N/R.K
9. Order accordingly.