Raghubar Narain Chaudhuri v. Mohit Narayan Jha

James, J.:— (after stating the facts as set out above, proceeded as follows:) The most important question for consideration in these appeals is whether the usufructuary mortgagees are liable to account or whether they are entitled to claim the benefit of the provisions of section 77 of the Transfer of Property Act. The mortgage bond specifies a sum of Rs. 91-15-0 as the annual income which the mortgagees may expect to derive from the property; but it is expressly provided that any income in excess of this shall go to the mortgagees in possession and that the mortgagors will have no concern with it. Mr. Pugh contends on behalf of the appellants that the assignee of the equity of redemption is not concerned to know how the mortgagees applied their annual profits, provided that no additional liability was thereby cast upon the mortgagors. Mr. Hasan Imam cites a number of cases. [Basant Rai v. Kanauji Lal, Narsing Narain Singh v. Babu Lukputty Singh, Jaijit Rai v. Gobind Tiwari and Parasuramar Pattar v. Venkatachala Pattar] in all of which the usufructuary mortgagees were made to account. In the case of Basant Rai v. Kanauji Lal the mortgagee undertook by his mortgage bond to pay malikana out of the profits and failed to pay it; but it is to be noted that malikana was payable in that case to the mortgagor. In the case of Jaijit Rai v. Gobind Tiwari the mortgagee failed in his contract to pay Government revenue from the profits, and the assignee of the equity of redemption was compelled to pay in order to save the property. Mr. Pugh does not deny that the mortgagees would be liable to account if by their mortgage deed the malikana had been payable to the mortgagors, or if owing to the default of the mortgagees the mortgagors had themselves been obliged to pay malikana to Ganga Ram Chowdhury; and indeed in all the cases cited by Mr. Hasan Imam the usufructuary mortgagees were required to account because by their omission to fulfil the terms of the mortgage contracts the mortgagors had been made to suffer specific losses; that is to say the mortgagee had failed to pay to the mortgagor rent or malikana reserved by the mortgage deed, or in other cases the mortgagors had been obliged to make payments which the mortgagees had undertaken to make.

In the present case we are asked to declare the mortgagees liable to account, not because of any default affecting the mortgagors, but on the ground that they have obtained as profits the money which ought under the deed to have been paid to the malikanadars. This case would appear to resemble that of Fakir Muhammad Khan v. Ali Sher Khan wherein the mortgagee, who was entitled by his mortgage to appropriate in lieu of interest the profits remaining after the payment of rent to the zamindar, had for several years escaped payment of rent. In that case it was held that this fact gave no ground for taking accounts; the mortgagee was entitled to all the profits he could make out of the property, and it happened that he had managed to add to the profits the rent of several years. We need not doubt that the result of the case would have been different if the rent had been payable to the mortgagor, or if the mortgagor had himself been obliged to pay the rent to save the property. Another case in point is that of Shafi-un-Nissa v. Fazal Rao wherein it was held that an usufructuary mortgagee is not liable to account unless there is an express stipulation therefor. We are of opinion that the mortgagees' failure to pay the malikana does not render them liable for account, nor does it necessarily affect the liability of the mortgagors to pay the mortgage money before they can recover possession of the property. The utmost that the mortgagors can be allowed to claim is that they should be indemnified against the contingency that a valid claim for arrears of malikana may be made against them after their recovery of possession. It is not clear who is entitled to malikana or whether anybody is now entitled. It has been suggested in the course of argument that the mortgagees as reversionary heirs of Ganga Ram Chowdhury may have now become entitled to the malikana; but this has not been proved. The claim which was made, but not proved, in the trial of the case, that the mortgagees are now the malikanadars because they are registered as proprietors, is of doubtful validity, since the malikana was payable to maliks out of possession, not to proprietors in possession; but this is a question on which we cannot give judgment since it has not been tried out, and the evidence on the record is scanty. There appears to be possibility that some person entitled to malikana may be able to recover twelve years' arrears from the plaintiff after he has obtained possession of the mortgaged property; and the mortgagees must give him an indemnity against this contingency.

The result is that the mortgagee's appeal no. 610 will be decreed, while the mortgagor's appeal no. 753 will be dismissed. The decree of the District Judge is set aside and the decree of the Subordinate Judge is restored, with these modifications, that the date by which the sum of seven hundred rupees is to be paid to the defendants by the plaintiff, will be fixed as September the 19th, 1927; and that by August the 19th, 1927, the mortgagees must execute a bond in the sum of Rs. 110 to the satisfaction of the Subordinate Judge, indemnifying the mortgagor against the possibility of his being made liable to pay twelve years' arrears of malikana after recovery of possession, and if this indemnity bond is not duly executed within the period prescribed, the plaintiff will be permitted to redeem on payment of the sum of Rs. 950. The plaintiff Mohit Narain Jha will bear the costs of defendants 1st party in this Court and in the Lower Appellate Court.

Jwala Prasad, J.:— I agree.

Appeal dismissed.