Ross, J.:— Rai Tukanath Singh Bahadur had a raiyati settlement of 454.35 acres in the Government estate Taufir Barhi, mauza Chhabisia, and also a share in the proprietary interest in certain other estates. On the 6th of December 1905 he and his co-sharer (hereinafter referred to as “the mortgagors”) executed a mortgage in favour of Kali Prasad Singh (Exhibit 10). The deed recited certain debts, and the mortgagors in consideration of Rs. 35,000 let out 175 acres of this raiyati land for a term of nine years from 1906 to 1914 in usufructuary mortgage. It was stipulated that the mortgagee should enjoy the usufruct of the land in lieu of interest. Besides the usufructuary mortgage, there was a simple mortgage in these terms:
“The bharna properties are let out in rehan (usufructuary mortgage) and mortgaged for the said debt.”.
The mortgagors then proceeded to mortgage the proprietary interests above referred to, to secure any payments made by the mortgagees for the protection of the property. The raiyati lands and the proprietary interests were the schedule 1 and the schedule 2 properties to the deed respectively. Then came a general clause:
“The properties specified in schedules nos. 1 and 2 are let out in rehan and mortgaged as security for the zerpeshgi, principal with interest. Till the repayment of the whole and entire thereof, the properties mentioned in both the schedules, as aforesaid, shall remain mortgaged and liable.”
In the event of dispossession the mortgagees were to have, power to recover their entire principal with interest at 1 per cent, per mensem from the properties mortgaged and mentioned in schedules 1 and 2. It seems plain that this deed created not only a usufructuary mortgage over the schedule 1 lands the produce of which was to be appropriated in lieu of interest on the loan, but a simple mortgage over these and the schedule 2 lands also.
Two days after this mortgage was executed the parties agreed to a modification of its terms. The mortgagors found that they required only Rs. 14,000 and not Rs. 35,000 and this amount only was advanced, the mortgagees taking possession of only 70 acres instead of 175. This modification is referred to in paragraph 5 of the plaint, where it is stated that the other stipulations in the deed remained intact. It appears that one of the Marwari creditors of the mortgagors had brought a suit for money against them and sought to attach before judgment the amount still to be advanced on the usufructuary mortgage of 1905 in the hands of the mortgagees and by petitions in Court by both the mortgagors and the mortgagees (Exhibit A-2, Exhibit 17, Exhibit 15 and Exhibit 15-a) this modification of the agreement was pleaded in answer to that prayer. One of the questions in this suit is as to the effect of the modification of the agreement; and it is contended on behalf of the respondents that it had the effect of limiting the schedule 1 lands to 70 acres and that in the light of these petitions and of events that actually happened schedule 1 must be read as if it had been so limited. Reliance was placed on the decision of the Judicial Committee in Mahomed Musa v. Aghore Kumar Ganguli. All that was decided in that case was that where an agreement has not been fully clothed in legal form, the defect may be supplied by the actings of the parties provided they are unequivocally referable to the contract and productive of alteration of circumstances. Assuming that the principle of this decision would apply to a case where it is sought to modify an instrument, registered and requiring registration, by unregistered petitions in Court—an entirely different state of things from that which was under consideration in that case—it seems to me that the limitation to 70 acres can only be referred unequivocally to the smaller amount of interest due on the money advanced and does not necessarily import any intention to limit the security for the principal sum to that reduced area. It was held by the Full Bench of the Calcutta High Court in Lalit Mohan Ghosh v. Gopalichuck Coal Company, Limited that a document varying the amount of rent to be paid under a registered lease required registration. Similarly in Durga Prasad Singh v. Rajendra Narayan Bagchi, the Judicial Committee agreed with the High Court in holding that a document by which it was sought to reduce the rent reserved in a registered lease was inadmissible in evidence to vary the terms of the lease for want of registration. In my opinion, therefore, there was a valid subsisting mortgage over the whole of the schedules 1 and 2 lands, the only effect of the reduction of the loan from Rs. 35,000 to Rs. 14,000 being that the mortgagees entered into possession of only 70 acres instead of 175 acres in lieu of interest.
The next transactions to which it is necessary to refer are a series of sales of raiyati lands in Chhabisia to one or other of the defendants first party. On the 9th of May 1910 the mortgagors sold 67 acres to Chaturbhuj Singh (represented by defendants nos. 1-10). On the 16th of December, 1910, they sold about 34 acres to Bansi Singh (represented by defendants 11 to 23). On the same date they sold 8 acres to Jhonti Singh [represented by defendants 44 and 44(a)]; and on the 19th of May 1915 they sold 47.10 acres to Rampal Singh (represented by defendants nos. 24 to 39). It may be mentioned here that defendants nos. 40 to 43 are the Marwari creditors of the mortgagors who have purchased the schedule 2 properties in execution of a decree on an earlier mortgage. There were other three sales of smaller areas with which this suit is not concerned; but the result of these and other sales to the same parties was that out of the original area of 454.35 acres the mortgagors had parted with 316.61 acres and had retained only 137.74 acres. These conveyances contain a declaration that the vended property is
“clear and free in every way and our light and title in the vended properly is free from all defects. In case of defect in our title or by act of us the executants or our heirs and representatives any debt or encumbrance, etc., is found or comes to light…………… we all shall be liable to pay from our person and other moveable and immoveable properties, the consideration money with damages and costs.”
There was no reference in these conveyances to the mortgage of the 6th of December 1905.
Omitting for the moment a transaction of the 2nd of December, 1915, in favour of Dut Narayan Singh and Harbans Narayan Singh which will be discussed presently, the next event is the sale of this 137.74 acres in execution of a certificate for arrears of rent. It may be mentioned that in the certificate proceedings, the whole property was advertised for sale; but on the objection of Chaturbhuj Singh and the other purchasers already referred to their lands were excluded. An objection by Dut Narayan Singh and Harbans Narayan Singh was overruled. The 137.74 acres were purchased at this sale by the plaintiff for Rs. 18,600 on the 29th of September, 1916, and on the 8th of September, 1919, he repaid the advance of Rs. 14,000 to the mortgagees and obtained possession of the property that had been in their hands. The present suit is a suit against the defendants first party for contribution and it seems plain that if these were all the facts, the plaintiff had a clear case. He had freed properties which were subject to encumbrance and was entitled to contribution from the several owners according to the value of their respective interests. So far as the schedule 2 lands were concerned, the plaintiff made no claim to properties 1 and 3 which had been mortgaged to the Marwaris by a deed anterior to the deed of 1905, but claimed contribution from the other properties which were purchased, by the Marwaris in execution of a personal decree under section 90 of the Transfer of Property Act; and, so far as the liability to contribution is concerned, these properties clearly stand on the same footing as the Schedule 1 lands.
A question was raised as to the situation of the 70 acres which were in usufructuary mortgage and a commissioner was appointed to ascertain this. His map (Exhibit 8) shows the boundaries of the 175 acres alternatively according to the boundaries in the mortgage deed (yellow) and as identified by the commissioner on the spot (green); but this difference of boundaries is not very material. The map also shows the situation, of the 70 acres (light red) and so much of 137.74 acres purchased by the plaintiff as falls within this area, namely, 33.88 acres (chocolate). The defendants admitted in their written statement that they were the purchasers of so much of the 175 acres as was not included within the 70 acres. In his report the commissioner identified, plot by plot, the lands purchased by the plaintiff with those mortgaged in 1905 to the extent already stated, viz., 33.88 acres. An argument was sought to be raised on the khatian of the khas mahal settlement of 1921. It shows that the mortgagees were actually in possession of 65.29 acres under plot numbers corresponding with the numbers of the plots in the plaintiff's sale certificate; and it was contended that all the mortgaged properties had been purchased by the plaintiff. In my opinion this argument is not entitled to succeed in view of the fact that a commissioner was appointed to ascertain this particular matter and no objection was made to his report by either side at the trial, nor was the commissioner examined to explain his report. I think that it must be taken that the plaintiff released on his own account 33.88 acres only out of the mortgaged property.
I now turn to the transaction of the 2nd of December, 1915. The deed (Exhibit A-1) in favour of Dut Narayan Singh and Harbans Narayan Singh recites a loan of Rs. 3,000 taken from one Bhabhikhan Singh on a usufructuary mortgage of certain lands and the mortgage of 1905 and its subsequent modification. It also recites that the Government revenue was in arrears and the fact that an agreement, for sale was entered into on the 20th of September, 1915, by which the vendees of this deed undertook to purchase 61.60 acres of raiyati land in Chhabisia for Rs. 18,932. The operative words are contained in paragraph 7 which runs as follows:
“We, the executants, have of our own accord and will, sold and transferred 61.60 acres of jote raiyati land with occupancy right as per boundaries and details specified below out of 454.35 acres of raiyati land with occupancy rights noted in the Ehatian in the name of Rai Tukanath Singh Bahadur, situate in Mahal Taufir Chhabisia……………to Babu Dut Narain Singh…………and Babu Harbans Narain Singh………full brothers…………for proper and full consideration of Rs. 18,932 and put them in possession thereof. Out of the consideration money we have kept in deposit with the purchasers Rs. 3,000 for payment to Babu Bhabhikhan Singh and others due under a Sudbharna bond, dated 17th November, 1903, and Rs. 14,000 for payment to Babu Kali Prasad Singh, Babu Badri Narain Singh and Babu Vilayati Prasad Singh, due under the aforesaid zarpeshgi patta and dated 24th Aghan, 1313 Fs. corresponding to 6th December, 1915. We have received the remaining Rs. 1883 in cash after allowing a deduction of the earnest money amounting to Rs. 49 from the said purchasers and paid the Government revenue. It is requisite that the said purchasers shall pay the money to the Mahajans aforesaid, take back the documents and keep them in their Tahbil. They shall enter upon and remain in possession of the vended property and pay the Government revenue.”
The other important clause in this deed is paragraph 10 which is as follows:
“We have assured the said vendees that the vended property is, by all means free from defect of title. We the executants, have full rights in and the right of transferring the vended property. We have also assured (the said vendees) that save and except the zarpeshgi amounting to Rs. 14,000 due to the said Babu Kali Prasad Singh and others and Rs. 3,000 due to Babu Bhabhikhan Singh and others there are no other encumbrances on the vended property. As the aforesaid zarpeshgies have been paid out of the consideration money covered by this kabala the said purchasers have acquired and shall acquire the benefit of the mortgage lien created under the zarpeshgi patta, dated 17th November, 1903, and the patta, dated 24th Aghan, 1313, Fasli, corresponding to the 6th December, 1905. Subject to the mortgage lien of the said documents, this kabala is executed.”
Under this deed the vendees paid to the vendors Rs. 1,932 in cash and it appears, though there is no direct evidence on the point, that Bhabhikhan Singh's mortgage was also satisfied by them. It was suggested that the two plots situated in the area with which this suit is concerned that where in mortgage to Bhabhikhan Singh, viz., plots nos. 224 and 312 measuring 536 acres could not have been the whole of the security for his loan of Rs. 3,000. There is nothing to show this. The reference to Bhabhikhan Singh's mortgage in schedule 3 to the bond of the 6th of December, 1905, seems to show that the sum originally advanced was Rs. 400 on a mortgage of 4 bighas of land. All that is known about the satisfaction of that loan is that the plaintiff did not pay Bhabhikhan Singh and yet entered into possession of the two plots that had been in his possession. This deed of sale is referred to in paragraph 6 of the plaint where it is stated that only Rs. 1,932 out of the consideration was paid and the purchasers did not get into possession of any portion of the vended property, the suggestion apparently being that this sale did not take effect. It is clear, however, that this deed does effect a sale and that the transaction was completed and the title transferred; and in fact Harbans Narayan Singh and Dut Narayan were judgment-debtors in the certificate for arrears of rent and were served with notice of the sale and objected unsuccessfully. It is true, however, that the main part of the consideration, viz., Rs. 14,000, was not paid.
The case for the defence is that the plaintiff Kamta Singh is a farzidar for Harbans Narayan Singh and that the rights of the parties to this litigation are therefore controlled by the terms of this conveyance. This raises the question of benami. I shall deal briefly with this point as it has been dealt with elaborately by my learned brother and I am in agreement with him and with the trial Court on the question.
Learned Counsel for the plaintiff also referred to section 66 of the. Code of Civil Procedure as a bar to any plea of benami being raised in connection with a sale by the Court. That section, however, is only a bar as between the benamidar and the alleged principal, but does not stand in the way of a third party raising the plea of benaroi as a deforce. I find therefore as a fact, in agreement with the trial Court, that the plaintiff is a farzidar for Harbans Narayan Singh.
Therefore, taking the position to be that the plaintiff is the farzidar of Harbans Narayan Singh, the question to be decided is what is the effect of the conveyance of December 1915 in favour of the latter upon the rights of the parties, because the certificate sale of 1926 only conveyed, to Harbans Narayan Singh his own property 61.60 acres and some additional area (137-61.60 acres).
It is clear that clause 10 of the conveyance (quoted above) gives the plaintiff no assistance. The argument is that Harbans Narayan Singh is by this clause subrogated to the position of the mortgagee; but as mortgagee he can have no right to contribution. The right of the mortgagee is to be paid and the mortgage debt has been satisfied. The only benefit which this clause gives is to keep alive the mortgage against a mesne encumbrancer; but that position does not arise here. This clause therefore has no bearing on the present question.
The plaintiff then relies on the first clause of Section 82 of the Transfer of Property Act and contends that as a purchaser for value of a part of the mortgaged property he is entitled to contribution from the purchasers of the other parts, notwithstanding the covenant against encumbrances in their conveyances.
The question may be stated in this form. Is the plaintiff entitled to contribution or are the defendants entitled to marshal? On the statute, the matter stands thus. Section 56 of the Transfer of Property Act entitles the buyer of one of two properties subject to a common charge to marshal against the seller in the absence of a contract to the I contrary. Section 81states the rule of marshalling generally and expressly saves the rights of the first mortgagee “or any other person having acquired for valuable consideration an interest in either property”, Section 82states the rule of contribution which by its last clause is made subject to the right to marshal where that right arises.
Certain decisions may now be referred to bearing on the question. The ordinary rule is stated Barnes v. Racster. In that case Racster being the owner of two properties known as Foxhall and no. 32 mortgaged Foxhall to Barnes in 1792, Foxhall to Ffartwright in 1795, Foxhall and no. 32 to Barnes in 1800, and Foxhall and no. 32 to Williams in 1804. The estate was not sufficient to pay all the mortgages, but no. 32 was sufficient to pay Barnes in full. It was held that Hartwright had no equity against Williams to throw Barnes upon no. 32 and that the mortgage fund, must be apportioned rateably between both the properties. In that case the puisne mortgagees had notice of the earlier mortgages. In Flint v. Howard Kay, L.J said, “The right of a subsequent mortgagee of one of the estates mortgaged to marshal, that is to throw the prior charge which exists on both estates upon that which is not mortgaged to him—is an equity which is not enforced against third parties, that is, against anyone except the mortgagor and his legal representatives claiming as volunteers under him. It is not enforced against a mortgagee or purchaser of the other estate.”
In the present case there are two circumstances the effect of which have to be considered. (1) The defendants first party took without notice of the mortgage of 1905 and with a covenant against encumbrances; and (2) Harbans Narayan Singh purchased expressly undertaking to pay off that mortgage. In Stronge v. Hawkes the facts were that a testator who had mortgaged two properties known as Parr and Carters, devised by his will all his estates to trustees on trust by sale or mortgage to pay off his debts and, subject thereto, in trust for his daughter for life with a general power of appointment to her. The daughter by virtue of her power mortgaged Parr to the defendants by a deed reciting (falsely) that the testator's debts had been paid and containing a covenant against encumbrances. She also subsequently by virtue of her power mortgaged Carters to another party. In an administration suit the defendants claimed exoneration for Parr at the expense of Carters. Turner, L.J said “That under a deed containing such a recital and such a covenant, an owner in fee would be bound to indemnify the mortgaged estates out of other estates belonging to him cannot I think be denied. A court of equity would enforce the covenant against him; but when the court is called upon to enforce such a covenant against the alienee for value of the owner, other considerations present themselves.” In that case it was held as between the two appointees that there was no exoneration. The next case referred to in the argument was In re Jones, Farrington v. Forrester. In that case the owner of an absolute interest in an undivided moiety of an estate and of a contingent interest in the other undivided moiety mortgaged both for,£1,500 and then sold the contingent moiety to his mother for £1,000 making no reference to the mortgage, but giving a covenant for further assurance. The mother paid off the encumbrance of £1,500. The question having been raised between the persons upon whom the absolute moiety and the contingent moiety had respectively devolved by a will, it was held by North, J. that the burden of the £1,500 should be thrown on the absolute moiety, the contingent moiety being exonerated. His Lordship observed as follows after reviewing the authorities: “Those authorities appear to me to be precisely in point and inasmuch as in the present case H.E Jones did not part with his absolute moiety for value (in which case a right of contribution might possibly have arisen), but disposed of it by his will (of course without consideration) it seems to me that the burthen of the mortgage debt must be borne by the absolute moiety in relief of the contingent moiety. As between the two moieties, the contingent moiety ought to be indemnified against the mortgage debt out of the other moiety.” This case therefore also leaves undetermined the position of the purchaser for value, though suggesting the possibility of contribution. That case is referred to in In re Darby's Estate: Rendal v. Darby where Warrington, J., quotes from Ker v. Ker where Christian, L.J refers to Harbert's case as follows; “The conclusions which I gather from Harbert's case are the following: first, that the original principle of the common law was equality, that is to say, contribution in the ratio of value, wholly irrespective of priority of dates of purchase; second, that the case of the debtor himself and his heir-at-law in respect of retained lands, was an exception to that principle by reason solely of his personal liability, and that to such exception it mattered not whether the purchases were such with consideration or without it.” In the case before him Warrington, J. held that where a man had created a mortgage by deposit of title deeds and subsequently by voluntary deed assigned leasehold premises (one of the subjects of the mortgage) to his wife without any reference to the charge or covenant for title, the leasehold was not liable to contribute to the payment of the mortgage debt. His Lordship observed that in order to establish a right to contribution, it is incumbent upon the executors to show that they have an equity to call upon the assignee to contribute to the debt which is their debt alone. The debt is the debt of the assignor and they as his executors are bound to pay it. It is contended, however, that the executors are entitled to contribution from the assignee. Is there any authority for this proposition? It seems to me that there is not.”
Some light is thrown on the question by the decision in In re Mower's Trusts. In that case John Lush being entitled to £1,500 Stock in reversion-upon determination of one life interest and also to one-third of £2,200 Stock in reversion upon determination of two life interests, in 1817 mortgaged his £1,500 Stock and in 1818 again mortgaged his interest in both funds and in 11819 again mortgaged his interest in both funds subject to both the earlier mortgages. The mortgage of 1818 had priority over that of 1817 because the trustees of the will under which John Lush inherited had notice of it first. The sum of £1,500 which had first become payable on the death of the tenant for life was absorbed in satisfying the mortgage of 1818 and when the interest in £2,200 became available, a question was raised between the mortgagees of 1817 and the mortgagees of 1819 as to priority. It was argued for the mortgagees of 1819 that on the principle in Barnes v. Racster the mortgage of 1818 must be treated as having been paid rateably out of all the funds in the mortgage. For the mortgagees of 1817 it was argued that while that would be the ordinary rule, it was competent to the mortgagor upon making a third mortgage to frame it in such a way as to give to the third mortgagee only what the mortgagor was entitled to, i.e, the surplus of both properties after payment of the first two mortgages and then the third mortgagee takes nothing until the prior mortgages are satisfied; and it was so held by Lord Romilly M.R who decided that the mortgagees of 1817 were entitled to be paid in full in priority to those of 1819. In Aldridge v. Forbes the facts were these. In 1812 the owner of two estates, Mariaqua and Yamboo, mortgaged both for £30,000. Payments were made from time to time and in 1818 the debt was reduced to £7,500. In 1818 the mortgagor made a settlement for the benefit of his daughter by a deed reciting the debt of £7,500 due on the mortgage and covenanting to charge Yamboo with the sum of £10,000 subject to that mortgage. The Mariaqua estate was not mentioned in the deed. In 1819 he mortgaged both estates subject to both the earlier charges and it was expressly agreed that such mortgage should not affect or prejudice the rights of the daughter under the settlement of 1818. The second mortgagees became entitled to the first mortgage and they claimed that the first mortgage should be paid rateably out of both estates in proportion to their values, the estate being insufficient to satisfy all the charges. It was held by the Lord Chancellor that the real question was whether the persons entitled to the charge on Yamboo were to be paid and whether they had not in fact a right to have the estate marshalled in such a manner as their charge might be paid and that although the settlement was voluntary, it was good as against the settler, and persons taking expressly subject to it could not, by purchasing the first mortgage, alter the position of the parties; and it was decided that the estate ought to be so marshalled as Yamboo might pay the charge upon it. The principle of these cases seems to me to be applicable here. The price which Harbans Narayan Singh paid for the 61.60 acres that he purchased was Rs. 18,932 of which Rs. 14,000 was ear-marked for the payment of the usufructuary mortgage debt. A part of the consideration for this property therefore was the satisfaction of the mortgage and it seems to me plainly inequitable that he should pay this price and then claim to recover the larger portion of it from persons who had nothing to do with the property for which this price was paid, namely, 61.60 acres. The conveyance that Harbans Narayan Singh took recited the mortgage and threw the liability for the mortgage debt upon him. In other words, the mortgagors in making these terms with Harbans Narayan Singh were implementing their own contract with the defendants first party when they sold part of the property to them free of encumbrances and this, on these authorities, they were entitled to do; and this term of the conveyance, in my opinion, gives the defendants first party a right to marshal.
It is true that in Mathoora Nath Chuttopadhya v. Kiristo Kumar Ghose contribution was decreed in circumstances somewhat similar to the present. But the decision rested on the construction of the deed of conveyance to the plaintiff in that case. Their Lordships observed: “No doubt it was understood between the plaintiff and his vendor that the whole of the vendor's debts should be discharged by the plaintiff, but having had the deed read to us we do not think that there is anything, which shows that there was any intention of the parties to exonerate the defendant from any liability the law would cast upon him.” And they followed, as being substantially indistinguishable, the decision in Bhyrub Chunder Mudduck v. Nuddiar Chand Paul. But that was a case in which the present question did not arise at all. It may be mentioned that Sir Rash Behari Ghose in his Law of Mortgage (5th Edition, p. 401) had, doubted the soundness of this decision.
I have hitherto assumed without discussion that the effect of the conveyance of December 1915 continued notwithstanding the purchase in execution of the certificate for rent. This, however, is not admitted on behalf of the plaintiff. His contention is that by the terms of his conveyance Harbans was under no obligation to pay the arrears of rent due on the property. This was the duty of his vendor and consequently when the property was sold over his head in execution of the certificate, the position was precisely the same as if he had been evicted by title paramount. The certificate was of Rs. 4,060—no negligible sum—and as learned Counsel for the appellant put it, there was no obligation upon Harbans Narayan Singh to throw good money after bad. On the other hand he paid the full price (subject to the encumbrance) for the, 137 acres that he purchased at the sale and, as the default was on the part of his vendor and not of himself, there is no reason why he should not take a clear title.
The matter, may be stated in another form. Prima facie the plaintiff has a right to contribution against the defendants first party. These defendants have their remedy against their vendor on the covenant against encumbrances. He in his turn would have his remedy against the plaintiff on the plaintiff's covenant to pay off the encumbrance; and consequently when the rights of the parties are adjusted in equity in one suit, the defendants first party would have a short answer to the plaintiff's claim, based ultimately upon the rights of the plaintiff's vendor against the plaintiff. But where the plaintiff has lost his title by the default of his vendor, this equity is no longer open to the defendants first party and they must contribute.
The argument is a serious one, I think the most serious in the whole case; and it requires an examination (1) of the terms of the conveyance of December-1:915 and (2) of the situation at the certificate sale.
(1) The conveyance recites the mortgages on the property and proceeds as follows:
“It is incumbent upon us to pay off the debts mentioned above. Besides that, a considerable amount of Government revenue in respect of Jote lands situate in Mahal Khas Taufir Barhi known as Chhabisia is payable by us, the executants. If the aforesaid debts and the revenue in respect of the Jote lands due to the Government are not paid, the properties of us, the executants, will be ruined. Hence we, the executants, with a view to pay off the debts and the Government demands and to protect the property of the family, settled………… that we should sell, etc.”
Clause 7 contains the following recital:
“We have received the remaining Rs. 1,883 in cash after allowing a deduction of the earnest money amounting to Rs. 49 from the said purchasers and paid the Government revenue.”
That this was not intended as a representation of actual fact is clear from the following paragraph which states that the permission of the Government had been taken for this sale and the letter sanctioning the sale had been made over to the vendees. It had been ordered in that letter that the entire Government revenue should be paid out of the consideration of the sale; but there was no such amount left after deducting the amount covered by the mortgages.
“Hence we, the executants, shall pay the remaining Government revenue out of our own pocket.”
Then follows a clause stating the vendees' right to have a separate account opened for their share of the Government rent and it is provided that if they have to pay the revenue in respect of the jote lands possessed by the vendors, they are entitled to realize the same with interest from them. Clause 13 provides that if the vendors fail to pay the Government revenue up till the day of the execution of the conveyance and if the purchasers have to pay the entire or a portion of the Government revenue in arrears, then the said purchasers shall realize from the vendors the entire money paid by them besides interest. The vendors also executed a deed of security in the vendees' favour. Now on this document the following points are clear: (i) the object of the sale was to save some of the vendor's property which was in danger not only from the mortgages but from the arrears of rent; (ii) the arrears of rent had not been paid; (iii) the condition on which the Government sanctioned the sale was that the arrears should be paid out of the consideration and that condition, to the knowledge of the vendee, was not being fulfilled. Consequently unless the vendee felt himself responsible for this payment, his title was at once in danger; (iv) provision is made for the protection of the vendee in future by the separation of his account; (v) it is distinctly contemplated that the vendee may have to pay the Government revenue in arrears up to the date of his conveyance. It is arguable that all this does not amount to a duty upon the vendee to satisfy the debt to the Government; but it is also arguable that if the conveyance is to be treated as a serious transaction it was within the contemplation of the parties that the vendee might, and probably would, have to make this payment. At all events there was no concealment, and the vendor did not take advantage of the vendee in any way.
(2) The certificate shows as the certificate-debtors not only the original tenant, the vendor, but also the earlier purchasers, the defendants first party, and the latest purchaser, Harbans Narayan Singh. The earlier purchasers objected to their property being sold and it was exempted from sale in the first instance. Harbans Narayan Singh also objected to his property being sold and his objection was disallowed. His position in these proceedings was that of a judgment-debtor. The effect of the sale under the Public Demands Recovery Act was to pass to the auction-purchaser the right, title and interest of the judgment-debtor. That means that what passed to the purchaser was Harbans Narayan's title to 61.60 acres and the original tenant's title to the remaining area. It seems clear therefore that whatever condition attached to the 61.60 acres under the conveyance of December 1915, adhered to it still after the execution sale. On the whole I think that although Harbans Narayan Singh was not primarily liable for the arrears of Government revenue, he cannot be said to have been evicted by title paramount or to have taken by the certificate sale a title clear of his original obligation. Although the case is not free from difficulty, I am of opinion that it has been rightly decided and the appeal should be dismissed with costs. There will be one set of costs (hearing fee).
Chatterji, J.:— This appeal arises out of a suit for contribution. One Rai Tuka Nath Singh Bahadur, the ancestor of defendants third party, had a raiyati settlement of 1,437 bighas by standard measurement from the Khasmahal Government estate Chhatiasarai, and, out of this, he executed a sudbharna bond on the 24th Agahan, 1313 F.S, corresponding to 6th December, 1905, for a sum of Rs. 35,000 in favour of Kali Prasad Singh, the managing member of the joint family of defendants second party, in respect of 529 bighas 7 kathas 10 dhurs by a lugga of 4 cubits equivalent to 280 bighas by a lugga of 5 cubits and to 175 acres according to survey (and settlement) measurement. The sudbharnadar paid a sum of Rs. 14,000 only and by an agreement with the mortgagor his right to possession came to be limited to 112 bighas by a lugga of 5½ cubits equivalent to 70 acres. After that and between 1910 and May, 1915, several sale deeds were executed by defendants third party in favour of defendants first party (except the Marwari defendants 40 to 43), conveying their interest in portions of the entire holding under the Khas Mahal. After these sales, defendants third party executed in December, 1915, a deed of sale in favour of Harbans Narayan Singh and members of his family (defendants fourth party) in respect of 56.24 out of 65.29 acres which had been recorded in survey as in mortgage with the defendants second party and 5.36 acres in mortgage with Bhabhichan Singh, in all 61.60 acres, for a consideration of Rs. 18,932 out of which Rs. 1,932 was paid in cash and the balance was kept in deposit with the purchaser for payment of the zarpeshgi debt of Rs. 14,000 to defendants second party (represented by Kali Prasad Singh) and Rs. 3,000 to Bhabhichan Singh.
In the meantime, the rent due for the entire holding of Rai Tuka Nath Singh Bahadur fell in arrears; and it was advertised for sale at auction at the instance of the Khas Mahal in execution of a certificate of public demands. On the objection of the purchasers (defendants first party), the lands purchased by them were released with the direction that they would have to make up the deficit, if any, and the remaining area of 137.74 acres was put up to sale and purchased at auction on the 29th September, 1916, in the ostensible name of the plaintiff no. 1, who obtained the sale certificate and took delivery of possession on the 10th December, 1916. Later on, on the 18th September, 1919, the plaintiff paid a sum of Rs. 14,000 (zarpeshgi money) to the defendants second party in satisfaction of their dues and came into possession of the portion of the sudbharna land which he had not been able to possess before.
The Marwari defendants nos. 40 to 43 are auction-purchasers of the milkiat interest of the defendants third party in execution of their mortgage decree.
The plaintiff's case is that, though the area put into the possession of the sudbharnadar was reduced on the reduction of the sudbharna debt to Rs. 14,000 the entire area of 175 acres described in schedule 1 and the milkiat property described in schedule 2 of the plaint are liable for the mortgage debt, and the properties held by the defendants first party must contribute rateably towards the mortgage debt of Rs. 14,000 paid off by the plaintiff no. 1. According to him, an area of 26.90 acres out of 137.74 acres of land purchased by him at auction in the certificate sale was included as sudbharna land in the possession of the defendant second party and restored to his possession on the payment of the sudbharna debt of Rs. 14,000. The plaintiff deducts a sum of Rs. 1,709-9-0 as the proportionate burden on this area and claims a sum of Rs. 12,209-7-0 principal and Rs. 4,358-13-0 interest from defendants first party according to the proportionate value of their interest in the entire property by the sale of their respective portions. The other plaintiffs are members of the family of plaintiff no. 1 Kamta Singh.
The defendants first party dispute the claim. They contend that the plaintiff is a mere farzidar for Harbans Narayan Singh who had taken upon himself the liability to pay the sudbharna debt and cannot consequently, claim any contribution. They further contend that the mortgage debt due to defendants second party was limited to the area put into their possession on the reduction of the sudbharna-debt to Rs. 14,000 and the portions purchased by them had been excluded from the sudbharnadar's possession and were not subject to any liability. The defendants 40 to 43 (Ram Krishna Marwari and others) plead that as purchasers under a prior mortgage they cannot be made liable. The amount of the claim is also disputed.
The learned Subordinate judge found that the plaintiff was a benamdar of Harbans Narayan Singh and that the plaintiffs have no right of contribution, and dismissed the entire claim.
The principal question of fact in this case is whether the plaintiff no. 1 is a benamidar for Harbans Narayan Singh. Oral evidence has been adduced on both sides on this point, the evidence on the plaintiff's side being that the purchase was made by the plaintiff no. 1 on his own account, while the witnesses examined on the side of the defence say that the case cannot be decided on mere suspicion. It is also true, as pointed out in the case of Mussammat Sambho Kuer v. Harihar Prasad that “You cannot expect direct evidence of a benami. The whole object of such a transaction is to suppress evidence of the real facts; but true facts can be proved by circumstantial evidence.” Let us, therefore, approach the case from these standpoints.
I have carefully considered the entire evidence, direct and circumstantial, and am satisfied that the consideration for the auction purchase was paid by Harbans Narayan Singh; that the latter has been in possession of the entire area and that the plaintiff is nothing but a mere benamdar for him. In arriving at this view, I am not unmindful of the doctrine that every apparent transaction must be assumed to be real; but the Court has the obvious duty of sifting the evidence and the circumstances and stripping off all the disguises from a transaction in arriving at the truth. I am in full agreement with the learned Subordinate Judge, who had the advantage of seeing the demeanour of the witnesses, that the plaintiff no. 1 is a benamdar for Harbans Narayan Singh and the members of his family.
Section 66 of the Civil Procedure Code on which reliance was placed by the learned Counsel for the appellant has no application to the present case. This section stands in the way of the beneficial owner maintaining his suit against an ostensible auction-purchaser, but this does not bar a third party from showing who the real purchaser is.
It is urged on behalf of the appellant that even if Kamta Singh is a benamdar for Harbans Narayan he is entitled to maintain this action because a benamdar can also sue. Reference is made to the case of Guru Narain v. Shio Lal. There can be no question that a beneficial owner is entitled to maintain an action in the name of his benamdar but the latter is a mere trustee for him and represents in fact the real owner and, so far as the legal position is concerned, he is subject to all the rights and obligations of the real owner and all the equitable considerations which would bind him.
In this particular case, Harbans Narayan Singh undertook, while making the purchase, to pay the mortgagee Kali Prasad Singh and others (defendants second party). The relevant portion of the deed of sale (Exhibit a) runs as follows:—
“Out of the consideration money we have kept in deposit with J the purchaser Rs. 3,000 for payment to Bhabhichan and others due under the Sudbharna bond, dated the 17th November, 1903, and Rs. 14,000 for payment to Babu Kali Prasad Singh and Babu Badri Narayan Singh due under the zarpeshgi bond, dated the 24th Aghan, 1313, F.S, and corresponding to the 6th December, 1915. It is requisite that the said purchaser shall make payment to the Mahajan aforesaid and take back the documents and keep them in their tahbil.”
It further appears that in the deed of sale in favour of the defendants Chaturbhuj, Bansi, Jhonti and Rampal (defendants first party), executed after the sudbharna bond and before the sale to defendants fourth party, the owners (defendants third party) covenanted that the lands sold were free from all encumbrances. The stipulation runs as follows:—
“We, the executants of this deed do declare in writing that the vended property is clear and free in every way and our rights and titles in the vended properties are free from all defects.”
And it is further mentioned:
“We, the executants have put aforesaid purchaser in our stead in possession of the vended property as absolute proprietors thereof.”
The question will arise whether in these circumstances the purchaser Harbans Narayan has any right of contribution from these prior purchasers.
The learned Counsel for the appellant contends that the properties of purchased by defendants first party as also a part of the area purchased by him in the certificate sale were subject to the mortgage debt of Rs. 14,000 due to defendants second party, and that the plaintiff is entitled to claim contribution from the owners of the other parcels according to the valuation of each of the mortgaged parcels; and reference is made in support of the contention to Section 82 of the Transfer of Property Act. There can be no doubt that if different persons purchase different parcels of the mortgage property their liability inter se is proportionate to the relative value of the property purchased by each of them, and if any such purchaser discharges the whole of the mortgage he is entitled to claim non-contribution from the owner of the remainder of the mortgaged property. This right to (recover the proportionate share of the debt succeeds even if the mortgagee purchases a portion of the mortgaged property, vide the case of Bisheshwar Dayal v. Ram Sarup. The principle is that, when the rights of the mortgagee and the mortgagor become vested in the same person only so much of the debt can be held to have been discharged as was proportionate to the value of the property in respect of which the confluence of right takes place. But different considerations will apply when the person making the payment was under an obligation to pay the debt in question, because the right to claim contribution rests upon the broad principle that where two or more persons are equally bound and equally relieved it is only just that they should all contribute in proportionate shares towards a common benefit. The important factor, to be borne in mind is whether the person suing for contribution and those sued were equally bound and equally relieved. In the present case, the obligation to pay the mortgage debt rested with Harbans Narayan who in the name of the plaintiff has discharged, the debt after the certificate sale. He has, therefore, satisfied his own burden. In the next place, his own predecessor-in-interest (namely defendants third party) had exonerated the portion sold to defendants first party from all liabilities. There is a clear declaration that “the vended property is clear and free in every way” and a specific mention that the sale is of the absolute ownership. Harbans Narayan is bound by this covenant and the plaintiff cannot be permitted to claim a higher right than his principal. He, by discharging the debt of Rs. 14,000 only relieved himself of the obligation which he had contracted to bear and I fail to see how he can, in the circumstances, ask the anterior purchaser to share the burden. Section 82 of the Transfer of Property Act provides for a right of contribution in the absence of contract to the contrary. As stated in the well-known book “The Law of Mortgages in India” by Sir Rash Bihari Ghosh, 5th Edition, 399, “the general rule, that if two or more estates subject to one mortgage come to be owned by different persons, they must rateably bear the burden of the mortgage, does not hold good where the payment is made by the person primarily liable. In such a case he merely pays his own debt as he was bound to do”. In re Jones, Farrington v. Forrester is an authority for the proposition that, when the owner of an estate mortgaged it, and afterwards sold an undivided moiety of it with a covenant for further assurance and the two moieties afterwards devolved on different persons, the unsold moiety must bear the mortgage debt as between the owners of the two moieties. North, J., observes at page 472, “Such a covenant is quite as effectual as a declaration that the estate is free from incumbrances.” In the present case, the owner did not mention the mortgage when selling portions to the defendants first party and made an unequivocal declaration that the same was free from incumbrances. Then, he arranged with a subsequent purchaser Harbans Narayan that the latter would pay off the entire mortgage debt and it is clear on the authorities that the portions originally conveyed stand exonerated from all liabilities, as between the co-owners of the estate. To hold that the plaintiff is entitled to a contribution would be in effect to allow Harbans Narayan to reap an advantage from the non-fulfilment of his part of the contract which he would not have obtained if he had carried out his agreement.
It is true that in the case of Re: Jones, referred to above, the moiety which was held to be liable for the whole debt had passed to a volunteer taking under a will but the position of an assignee purchasing the equity of redemption with a covenant to pay the entire charge cannot be put on a higher footing than that of a volunteer as against the persons (who had made purchases with a declaration against any incumbrances affecting their property. The case of Mathooranath v. Kristo Kumar is not inconsistent with this view. In the case the purchaser of a part of the mortgaged property was allowed a decree for contribution notwithstanding an undertaking by him that he would discharge all the debt of his vendor on the ground that there was nothing to show that there was any intention of the parties to exonerate this defendant from any liability. In the present case, the sale to defendant first party is of an absolute interest without any reference to the mortgage and with a declaration that it is free from any incumbrance, while the sale to Harbans (plaintiff benamdar) is of the equity of redemption with a covenant to pay up the entire burden.
The fact that the defendant third party made default in the payment of the rent after the sale to, Harbans Narayan, resulting in an auction purchase by the latter in the name of the plaintiff does not, in my opinion, alter his position. The rent was payable to the Government as the proprietor of the Khas Mahal and what was sold was a part of the holding in execution of a certificate under the Public Demands Recovery Act. Harbans Narayan Singh was one of the judgment-debtors in the certificate proceeding. The auction-purchaser bought nothing but the right, title and interest of the judgment-debtors and Harbans Narayan cannot get rid of the obligation under his conveyance of 1915 to discharge the entire burden.
A question was raised at the Bar that the sale deed in favour of Harbans Narayan was not acted upon. The document was registered. The vendee pays a sum of Rs. 1,883 in cash out of the consideration besides the earnest money of Rs. 49 and keeps in deposit with himself the balance of Rs. 17,000 for payment to the mortgagees. The vendee's application (Exhibit 16) to the Certificate Officer shows that he accepted the position as purchaser. The legal title in the vended property evidently passed to him.
It is urged that Harbans Narayan had a right of contribution because under clause 10 of his kabala the mortgage is kept alive for his benefit. This general provision is made as a possible shield against an incumbrancer or purchaser who is liable under the mortgage. In the next place, about 9 acres of the sudbharna plots are not covered by the deed of sale and the purchaser would naturally intend to be subrogated to the position of the original mortgagee for the sake of this area of land. Lastly, there is a stipulation in the original mortgage bond that a certain milkiat property would be subject to charge if the mortgagee would pay rents and Government demands. The purchaser would evidently seek the benefit of this clause. Be that as it may, the provision in question in the sale deed cannot confer any right of contribution against persons or properties where none exists.
I am satisfied that the plaintiff has no right of contribution against the defendant first party. The Marwari defendants 40 to 43 are purchasers at auction in execution of a prior mortgage, and cannot be made liable.
On the assumption that the plaintiffs have a right of contribution it is necessary to consider the relative liability of the properties held by the plaintiffs and the defendants first party. The mortgage bond in favour of the defendants second party was in respect of 529 bighas and odd measured with a lugga of 4 cubits equivalent to 175 acres, for a consideration of Rs. 35,000. It was stipulated in it that the mortgagee would possess this entire area in lieu of interest and that he would have a right of sale over the land given in sudbharna.
It is admitted in the plaint that the transaction was modified by an amicable settlement between the executant of the deed and the mortgagee, whereby a sum of Rs. 14,000 was paid by the mortgagee and lands covering an area of 112 bighas with a lugga of 5½ cubits (equivalent to 70 acres) came into his possession. It appears, however, that certain survey plots measuring in all 65.29 acres were recorded in the finally-published record-of-rights as in the possession of the mortgagee.
The case for the plaintiff is that, in spite of the putting into possession of a smaller are a on account of the reduction in the mortgage amount, the mortgage extended over the whole of the original area of 175 acres; while the case for the defence is that it was limited to the which came to be in the mortgagee's possession. A modification of the original arrangement is admitted in paragraph 5 of the plaint and is mentioned in the petitions of the mortgagee Kali Prasad Singh and others in the suit of Ram Krishna Marwari (defendant 40) which have been exhibited on the side of the plaintiff. It is urged on the side of the plaintiff in this court that sections 17 and 49 of the Registration Act bar the reception of these papers in evidence to prove the arrangement made. But the petitions merely refer to an arrangement already made and cannot in my opinion be considered as documents creating or declaring the rights of the parties within the meaning of section 17 of the Indian Registration Act and are not rendered inadmissible by section 49. Besides, as laid down by the Judicial Committee in Mohammad Musa v. Aghore Kumar equity will not fail to support a transaction, clothed imperfectly in those legal forms to which finality attaches, after the bargain has been acted upon. Moreover, when the alteration is admitted and the documents have been exhibited on the side of the plaintiff, the discussion is only of an academic interest.
The real question is what is the subject-matter of the mortgage when the area put in possession is reduced along with the consideration money? The document is an anomalous mortgage inasmuch as it gives the creditor a right of sale as a simple mortgagee besides his right as a usufructuary mortgagee in lieu of interest.
The deed states in paragraph 5 that so much area is given in sudbharna as per details given in schedule 1. In the schedule also the lands are set out as sudbharna lands. Clause 6 recites, that the creditors shall have the power to recover the money due to them by instituting a suit in court and that the bharna properties are let out in rehan (usufructuary mortgage) and mortgaged for the said debt”. On a consideration of the documents as a whole, I have no manner of doubt that the simple mortgage extends over the bharna land and that as soon as the bharna land is reduced the right as simple mortgagee is proportionately reduced, because both the rights (as a simple mortgagee with the right of sale and as a usufructuary mortgagee with the right to possession in lieu of interest) go side by side. Clause 9 proceeds on the assumption that the entire zarpeshgi money is advanced and the rent, or other Government demands or any other incumbrances on the bharna property, for which schedule 2 property is made liable under clause 8, are paid by the mortgagee and is not inconsistent with the view that the right of sale operated only upon the property actually put in bharna. A usufructuary mortgagee has ordinarily no right of sale and it is by a special contract that he acquires a right of sale. It cannot have been intended that the usufructuary, mortgagee over a part of the area (65 or 70 acres) would retain a right of sale over the entire area. The plaintiffs, have, in my opinion, no right to claim contribution on the footing that the mortgage discharged by them still extended over an area of 175 acres.
What then is the area over which the mortgage operates? The area as mentioned in the petition of the mortgagees (Exhibits 15 and 17) and in the sale deed (Exhibit A1) is 112 bighas by a lugga of 5½ cubits. This is equivalent to 70 acres, but I find that the mortgagees' possession is recorded in the survey over certain plots measuring in all 65.29 acres. There is no suggestion that the record is incorrect. Hence these particular plots must have been substituted for the original area of 112 bighas (equivalent to 70 acres). The mortgage right, in my opinion, extends over this area.
The plaintiffs claim that out of the lands purchased by them in the certificate sale, only an area of 26.90 acres is covered by the sudbharna land in favour of the defendants second party. The commissioner finds the area to be 33.88 acres on the basis of the boundaries as given in the petition (Exhibit 15). But the numbers of the survey plots as given in the Sale Certificate of the plaintiff show that he has purchased amongst others the plots specified below with the area given against each:—
320/566
…
…
…
…
18.16
320/585
…
…
…
…
10.10
320/586
…
…
…
…
4.10
320/584
…
…
…
…
1.40
820/587
…
…
…
…
6.40
320
…
…
…
…
25.13
Total…
…
65.29
The same plots with the same area totalling 65,29 acres is the sudbharna land as recorded in the finally-published record-of-right in the possession of the mortgagees.
Hence the plaintiff no. 1 has become the purchaser of the entire sudbharna lands left to the possession of the mortgagee. He has, therefore, relieved his own burden by paying up the sudbharna debt of Rs. 14,000 and not that of any of the defendants first party. None of the defendants first party admittedly hold any of these lands which were in the possession of the sudbharnadars (mortgagees). Thus, even if the plaintiff no. 1 be supposed to be the purchaser in the certificate sale on his own account and entitled, as a matter of law, to a right of contribution-, he can have no valid claim against the defendants first party because he has not discharged any part of their liability. Then, the right of contribution is an equitable remedy and when the plaintiff gets possession of the whole of 65.29 acres which was in the possession of the usufructuary mortgagee by discharging the debt, he cannot at the same time claim a relief by contribution while retaining possession of the whole.
As to schedule 2; property covered by the sudbharna deed, the Marwari defendants 40 to 43 are purchasers in execution of a prior mortgage-debt. Besides, this property was made subject to charge only for the rent, Government demands and other dues that might be paid by the mortgagee. Hence the purchasers of schedule 2 property cannot be held liable to contribute towards the sudbharna debt extending over a part of schedule 1 property discharged by the plaintiff.
No argument has ben advanced before us in respect of the claim against defendant 45 Mahanth Mahabir Das, which has been dismissed by the Lower Court.
On all these grounds there is no substance in the appeal and it is dismissed with costs.
Appeal dismissed.