The Judgment of the Court was as follows:—
The litigation, which has culminated in the appeal, relates to a property known as 20, Gorachand Road, Alipore, situate within the jurisdiction of the District Court of the 24-Perganas. The facts, out of which it has arisen, may be briefly stated.
The property in question belonged to a Hindu lady named Sushila Sundari Chowdhurani, who appears to have been in financial straits in the year 1902 and to have borrowed various sums of money from an attorney named Mohini Mohan Chatterjee. One of these promissory notes for Rs. 4,000 was endorsed by Mohini Mohan in favour of the Plaintiff, the present Appellant Rukmini Kanta Chakravarti, who brought a suit on it in the Original Side of the High Court and obtained a decree. The decree was transferred to Alipore and the Plaintiff executed it, attached the disputed property, and purchased it at auction sale on the 12th August 1915. The sale was in due course confirmed on the 30th March 1916, and the Plaintiff obtained delivery of possession on the 9th April 1918.
In the meanwhile, however, nearly seven years previous to this, viz., on the 4th August 1911, Sushila Sundari had mortgaged the property in suit to the Defendant, now Respondent Baldeo Das Binani, for a sum of Rs. 18,000 and as she failed to pay within the time stipulated, Baldeo Das brought a suit against her in the year 1913 and obtained a preliminary decree on the 10th January 1916 followed by a final decree which was passed on the 2nd July 1917. It appears, however, that in the interval between the passing of the preliminary and final decrees Sushila Sundari had died on the 22nd April 1916, i.e, some fifteen months before the making of the final decree, the mortgagee being apparently unaware of her death. Notwithstanding this the mortgagee put his decree into execution, purchased the property on the 12th June 1918, and on the 26th August 1918 was put into possession by the Court ousting the Plaintiff, who thereupon instituted the present suit to recover possession of the property from the mortgagee.
Before the trial Court some of the facts were disputed and issues were framed inter alia as to the genuineness and validity of the Plaintiff's decree and purchase, and of the Defendants' mortgage. The Subordinate Judge found that both transactions were valid and genuine. He held, however, that the omission to bring the legal representatives of Sushila Sundari on the record rendered the mortgage sale void and inoperative as against them, and that as the Plaintiff had purchased the interest of Sushila in the disputed property on the 12th August 1915, the mortgage sale held on the 12th June 1918 did not affect the interest of the Plaintiff. He then went on to consider whether the Plaintiff's interest in the property was subject to the Defendant's mortgage lien and relying mainly on the case of Lachmiput Singh v. The Land, Mortgage Bank of India held that the Plaintiff could not get possession without redeeming the mortgage debt, and that, as he had declined to exercise his right of redemption the suit failed.
On appeal by the Plaintiff the learned District Judge relying upon the same authority affirmed the decision of the Subordinate Judge holding that the mortgage decree and the sale thereunder were nullities, but that, as the mortgage lien of the Defendant was still subsisting, the Plaintiff was not entitled to get possession of the disputed property without paying off the mortgage debt. The appeal was accordingly dismissed with costs. The Plaintiff then filed this second appeal.
The facts are not now in dispute, and the sole question for consideration is what the legal rights of the parties are. Learned Counsel for the Appellant has challenged the conclusion arrived at in the Courts below upon various grounds. In the first place he raised the question, whether the deed in question (Ex. B) is an English mortgage at all. We do not think having regard to the terms of that document that there is really any room for contention. The three essentials of an English mortgage are—
(1) That the mortgagor binds himself to repay the mortgage money on a certain day:
(2) That the property mortgaged is transferred absolutely to the mortgagee: and
(3) That such absolute transfer is made subject to a proviso that the mortgagee will reconvey the property to the mortgagor upon payment by him of the mortgage money on the day on which the mortgagor bound himself to repay the same.
All these essentials are to be found in the Defendant's mortgage deed so that there can be little doubt that it has been rightly held to be an English mortgage.
It was next argued, however, that, even assuming it to be an English mortgage, or mortgage in English form, the Plaintiff's claim to possession on the basis thereof is untenable inasmuch as there is a material difference between a mortgage in English form, as it obtains in England, and an English mortgage as defined in sec. 58(e) of the Transfer of Property Act, the mortgagee in England being entitled to immediate possession of the mortgaged property, unless there is a special covenant excluding or suspending such right, whereas in India there is no mention in sec. 58 of the Transfer of Property Act of possession of the mortgagee immediately upon execution of the deed, and an English mortgagee in this country is, it is argued, entitled to possession only under a special covenant for such possession. In the present case there was no such covenant. Therefore it is urged the possession of the Defendant is wrongful, and the Plaintiff is entitled to have him ousted and to get possession of the property.
We do not think there is any substance in this argument. Though the deed in question does not contain in so many words a covenant for possession, it is plain that it gave a right of entry and that right could be exercised at any time. The fact that the mortgagee: obtained possession by proceedings, which subsequently proved to be a nullity; cannot we think stand in his way.
It is then contended that, even assuming the mortgage to be an English mortgage with a covenant for entry, still having regard to the provisions of Or. 2, r. 2 and sec. 11 of the Code of Civil Procedure, the Defendant not having elected to put his right to litigation in the mortgage suit, the mortgage merged in the preliminary decree which subsequently abated, with the result that the mortgagee lost the right, if he ever had it, and that there is now nothing left to redeem. Admittedly he entered into possession by virtue of his purchase at the mortgage sale, and as that sale fails, he must, it is argued, be regarded as a mere trespasser. The mortgage deed in fact becomes a mere scrap of paper which cannot be enforced and is valueless for all practical purposes.
We do not think this contention is well-founded. The mere fact that a judgment had been obtained on the mortgage could not operate to extinguish the debt, and the mortgage debt must, we think, be held to continue as a lien until it has been satisfied. The suit no doubt failed, but that cannot debar the mortgagee from falling back on his subsisting right under the mortgage deed, and, the fact that he came into possession not in the exercise of that right but in some other way, cannot alter the position. He had undoubtedly a right of entry under the deed, and is now in de facto possession. The Plaintiff in order to succeed must succeed by virtue of his own right.
In our opinion the Courts below have rightly decided the question of law involved, and we are not prepared to hold that the case of Roy Lachmiput Singh v. The Land Mortgage Bank of India , upon which they have relied, was wrongly decided. The following passage which occurs in the judgment in that case is to the point and may be quoted.
“Upon these considerations we hold that the mortgagees are now entitled notwithstanding the decree and sale to insist upon the covenant of entry into possession stipulated in the mortgage deed. They might have enforced such a covenant by suit in Court. But it does not follow that, because such a suit was not brought and the mortgagees entered into possession under a sale which has now fallen through, the mortgagor is entitled to obtain an unconditional decree for possession without redeeming the property.”
So in the same way here it does not follow because the mortgagee did not choose to litigate upon his right of entry in the mortgage suit, he is thereby debarred from falling back upon the rights conferred upon him under the mortgage deed, and from retaining possession of the property until such time as his mortgage debt has been satisfied.
It is true that in the case referred to above there was an express covenant of entry in the mortgage deed, but that does not materially alter the position, since by implication the mortgage deed in suit included such a covenant.
Finally it is urged on behalf of the Appellant that the Courts below have been influenced by a false sense of sympathy with the mortgagee, that this ought not to be allowed to weigh at all in the decision of the case, inasmuch as the point involved is purely one of law, and that the equities, so far from being on the side of the mortgagee, are against him having regard to the careless manner in which the mortgage suit was conducted.
We are not favourably impressed by this argument. Looked at apart from the legal aspect of the matter, we think that there can be no doubt that the equities are entirely on the side of the Defendant, and the persistent manner in which the Plaintiff has pressed his claim seems to us to be questionable to say the least. The property in suit appears to have been valued in the trial Court (vide judgment of the Subordinate Judge) at Rs. 4,000, and in the year 1911 it was considered sufficiently valuable to justify the advance of a sum of Rs. 18,000 on the security thereof. The Plaintiff seeks to obtain possession of this property for the wholly inadequate price of Rs. 500, and that notwithstanding the fact that the sale certificate clearly stated that the sale was subject to the mortgage lien. The Plaintiff declined to exercise hit right of redemption, and it is plain that he has throughout been trading upon the accidental circumstance that the representatives of Sushila Sundari were no brought on the record in the mortgage suit with the legal consequences (fatal, as no doubt hoped, to the mortgagee) which that omission involved. There are certainly no merits in the Plaintiff's case and he is deserving of no sympathy.
In the result the appeal fails and must be dismissed with costs, and the decree of the District Judge affirmed.
J.N.R
Appeal dismissed.