The Judgment of the Court was as follows:—
Garlick, J.:— The facts found by the lower Appellate Court are these:—
On 1st Jaistha 1325 Defendant No. 1 borrowed Rs. 300 from the Plaintiff and executed a usufructuary mortgage bond of some 28 bighas of land, stipulating that the Plaintiff should possess the land in lieu of interest and should return it on repayment of the principal. The bond also contained an agreement that if the mortgagee failed to get possession, he should be entitled to realise his dues, after deducting receipts, by a suit for sale of the property, and that interest should be calculated at Rs. 112-8 per annum. In pursuance of the agreement the Plaintiff was put in possession of 13 bighas of land, but not of the whole mortgaged property. On 15th Kartik 1326 Defendant No. 1 sold the whole property to Defendant No. 2. The purchaser took possession of the 13 bighas of land after Plaintiff had been in possession for two years. He tendered the principal money 300 to the Plaintiff, but Plaintiff refused it because he claimed interest in lieu of the usufruct of 13 bighas of land. So the Rs. 300 was deposited in Court. There were some negotiations with a view to compromise, but eventually the Plaintiff filed this suit claiming Rs. 800 in all after deducting Rs. 100 for two years' possession of 13 bighas: And the lower Courts have decreed that sum and have ordered it to be realised by sale of the property.
The grounds urged in the appeal by Defendant No. 2 are, first, that the deposit of the principal money was a valid deposit under sec. 62, and interest ceased to run from the date of deposit as sec. 84, Transfer of Property Act shows; second, that as the Plaintiff was in possession of some of the land he is bound to account for his receipts from it under sec. 76, Transfer of Property Act; third, that a usufructuary mortgagee cannot get a decree for sale. Sec. 67, Transfer of Property Act prevents it.
The last point is clearly untenable. A usufructuary mortgagee cannot as such sue for sale. But he can do so if the bond allows him to do so, as it does in this case.
As to the first point, in a usufructuary mortgage, the mortgagor has a right to recover possession under sec. 62 on payment or tender or deposit of the principal money. But Defendant No. 2 did in fact recover possession at about the time of the deposit. Under sec. 84, interest ceases to run when the amount due is tendered or deposited. But the amount due in this case was not merely the principal money. The Plaintiff was entitled to interest for two years at Rs. 112-8 per annum, minus the interest realised by his possession of 13 bighas of land. If any interest remained due, the deposit of Rs. 300 was not a valid deposit and did not prevent interest from running.
As to the second point, the lower Court has calculated that as the bond stipulated for Rs. 112-8 interest per annum if possession of 28 bighas 15 cattas was not delivered, therefore the value of the usufruct of 13 bighas for a year would be about Rs. 50 and that as the Plaintiff has deducted Rs. 100 for his two years' possession of 13 bighas, there is no necessity to take any account. The Appellant claims an account of the profits of 13 bighas for those two years. Under sec. 76 a mortgagee in possession must keep and give accounts. But sec. 77 lays down that sec. 76 shall not apply when the contract is that the mortgagee in possession shall take the receipts in lieu of interest.
In my opinion it is not right to allow the Plaintiff to apportion the interest and deduct Rs. 50 for possession of 13 bighas of land. For, those 13 bighas may have been the most valuable portion of the mortgaged land and may have given the Plaintiff a profit of far more than Rs. 50 a year. It is quite possible that the Plaintiff realised the full interest of Rs. 112-8 from those 13 bighas alone. If the Plaintiff had been put in possession of the whole mortgaged property, he would have been entitled to all the profits, even if they had fir exceeded Rs. 112-8. But when the contact to deliver possession was broken, the Plaintiff's right by the terms of the bond was only to receive Rs. 112-8 a year as interest. Therefore he was bound to account for the profits he received for his possession of 13 bighas and to deduct his actual profits from the interest due for each year. Until he did this, it was impossible for Defendant No. 2, who was not the mortgagor but a recent purchaser, to know whether any interest was due on the loan.
In my opinion, therefore, the deposit of Rs. 300 was a valid deposit, and interest ceased to run from the date of the deposit. The Plaintiff is entitled to withdraw the Rs. 300 and to be paid the balance of interest due to him for the two years preceding the deposit after accounting exactly for the profits which he received in those years.
It it not however worth while to remand the case for taking an account of so petty a matter. The Plaintiff deducted Rs. 100 on account of his profit for two years, and there is nothing to show that sum is inadequate. He was entitled to Rs. 225 as the interest for those two years by the terms of the bond. The amount due to him as interest is therefore Rs. 125. He is also entitled to the Rs. 300 in deposit.
The result is that the decree of the lower Appellate Court is modified, and the suit is decreed for Rs. 425 (including the Rs. 300 in deposit) instead of Rs. 800 with proportionate costs. If the money is not paid within 15 days from the date of the arrival of the record in the lower Court, the mortgaged property or a sufficient part of it will be sold. The Appellant will get one third of his costs in the appeal as the objection to the decree for sale fails.
Mallik, J.:— I agree.
S.C.M