1. On the 28th of May, 1913, Musammat Bibi acting for herself and as the guardian of minor son, Mohamad Ishaq, executed an usufructuary mortgage, in favour of the defendants in respect of two rooms in Mahalla Chaukbazar in the town of Gaya. On the day of the mortgage in question the defendants were in occupation of those two rooms as monthly tenants, paying a rent of Rs. 7 to the mortgagors. The mortgage bond provided that out of Rs. 15 which was the interest in respect of the advance of Rs. 1,000 made by the mortgagees to the mortgagors Rs. 7. should be deducted and that the mortgagors should pay Rs. 8 every month to the mortgagees by way of rent. The mortgage undoubtedly contemplated that the mortgagees would remain in occupation of those two rooms; and in that view it provided that upon payment of the principal sum with Such interest as was due thereon to the mortgagees five years from the date of the mortgage the mortgagees would make over possession of those two rooms free from the mortgage to the mortgagors. Having recited all these terms the mortgagor says:

Neither I, the executant, nor my sons and heirs representing me have got any objection whatsoever with regard to the same either directly or indirectly, and we neither have nor shall have any right left to us.

2. Musammat Bibi and her son Muhammad Ishaq conveyed their interest in those two rooms to the plaintiffs and on the 13th of February, 1925, the plaintiffs instituted the suit out of which this appeal arises for redemption of the mortgage of the 28th of May, 1913. According to the plaintiffs, the defendants have been letting out those two rooms to various persons on enormous profits and they contend that the receipts from the mortgaged property and interest thereon should be debited against the mortgagees in reduction of the amount if any from time to time due to them on account of interest on the mortgage money; and so far such receipts exceeded any interest due, in reduction or discharge of the mortgage money. The plaintiffs accordingly claimed an account as against the defendants in respect of such receipts from the mortgaged property as came into the hands of the mortgagees. The learned Judge in the Court below has on a construction of the mortgage bond negatived the contention of the plaintiffs, and in so deciding the learned Judge has professed to be guided by the decision of the Allahabad High Court in Shafi-un-nissa v. Fazalrab 7 Ind Cas. 293 : 7 A.L.J. 787.

3. In my opinion the present case is reasonably free from any doubt. Section 76 provides that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, or where such property is personally occupied by him, a fair occupation rent in respect thereof shall, after deducting the expenses mentioned in Clauses (c) and (d) and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest on the mortgage money, and, so far as such receipts exceed any interest due, in reduction or discharge of the mortgage money; the surplus (if any) shall be paid to the mortgagor. This section adopts the well-established view of equity that the mortgagee shall not get any advantage out of the mortgage bond beyond principal and interest and that the rents and profits are incidents de jure to the ownership of the equity of redemption, and that the mortgagee in possession is bound to apply whatever profits he actually receives towards the satisfaction of the mortgage debt. This is the general rule as codified in Section 76 (h) of the Transfer of Property Act. But upon that clause an exception has been engrafted which is to the effect that the general rule will not apply where, as provided in Section 77 of the Transfer of Property Act, there is a contract between the mortgagee and the mortgager that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of interest on the principal money or in lieu of such interest and the defined portions of the principal. Now, reading the genernl rule as embodied in Section 76 (h) with the exception as contained in Section 77, it is reasonably clear that the mortgagor is under the law and notwithstanding that there may not be any specific agreement to that effect, entitled to an account from the mortgagee as to the receipts from the mortgaged property which from time to time came into the hands of the mortgagee unless there is a contract between the parties which takes the case out of Section 76 (h) and brings it within Section 77. It seems to me that there is nothing in the mortgage bond which establishes that there was a contract between the parties to the effect that the receipts from the mortgaged property shall be taken in lieu of interest on the principal money. Mr, Rai Gurusaran Prasad refers us to two passages in the rehan bond, the passage which provides that the mortgagees ' might go on setting off Rs. 7 payable to me as the monthly rent of the two rooms which had been held on rent by them for a long time against Rs. 15 the monthly interest on Rs. 1,000 payable to them from the date of execution of this deed, and the remaining interest Rs. 8 per month due to them would remain payable by me," and another passage which I have already quoted. The terms of the bond must be read along with the admitted fact that at the date of the bond the mortgagees were in occupation of the two rooms in question as monthly tenants under the mortgagor. The mortgage bond, therefore, contemplated that an occupation rent of Rs. 7 per month should be paid by the mortgagees to the mortgagors; but it is obvious that there is no question of any occupation rent if the mortgagees do not occupy the rooms but let them out to tenants. I can see nothing at all in the passage to which I have just referred which takes the case out of Section 76 (h). The other clause to which reference has been made and which I have already quoted, does not directly or indirectly amount to a waiver of account as against the defendants. As I have said the mortgage bond was executed in the view that the defendants would occupy the two rooms in question.

4. I should like to say one word on the decision on which the learned Subordinate Judge has relied. The decision in that case may well be supported on the ground that on a construction of the mortgage bond it was clear that the intention of the contracting party was that the profits arising from the land mortgaged were to be appropriated by the mortgagee as part of the annual interest accruing upon the sum advanced by him. If that is the construction to be placed upon the mortgage bond, then the case was obviously correctly decided; and this was the view of Knox, J., in pronouncing judgment in the case. But the other learned Judge went much further. He says:

There is nothing in the mortgage-deed of the 15th January, 1866, to entitle the mortgagor to account, If he wanted to make the mortgagee liable to account, he should have in express terms stipulated therefor.

5. With all respect, I entirely dissent from this view of the law. I have already pointed out that Section 76 (h) of the Transfer of Property Act clearly entitles the mortgagor to an account from the mortgagee in possession in the absence of a contract to the contrary. In other words, unless a contract is established within the terms of Section 77 the mortgagor is under Section 76 clearly entitled to an account from the mortgagee. The learnt ed Judge proceeded to say as follows:

In addition to the absence of any agreement regarding the liability of the mortgagee for accounts the mortgage in question is undoubtedly usufructuary and Section 77 of the Transfer of Property Act exempts him as such from liability to account.

6. I am unable to accept this view of the law. In my opinion Section 77 does not exempt an usufructuary mortgagee as such from liability to account although it does exempt him from liability to the account if he establishes a contract in terms of Section 76 of the Act. It is, in my judgment, a complete misconception to suppose that a mortgagee in possession as such is exempted from liability to account. In my judgment every mortgagee in possession is bound to account under Section 76 (h) of the Transfer of Property Act, unless he establishes a contract in terms of Section 77 of that Act. As such a contract has not been established in the case the plaintiff is clearly entitled to an account from the defendants.

7. There is a cross-appeal on behalf of the defendants. Their case is that they have from time to time repaired the house and paid Municipal taxes and are, therefore, entitled to add the monies expended by them under those two heads to their mortgage claim. »

8. The plaintiffs agree that the money expended by the defendants in the actual repair of the two rooms in question should be debited against them in the taking of the accounts. The cross-appeal is to this extent allowed by the consent of the parties.

9. The result is that the appeal succeeds. The learned Subordinate Judge will now take an account of the money due to the defendants on the foot of the rehan bond of the 28th May, 1913. In taking these accounts the learned Subordinate Judge will debit the defendants with all receipts from the mortgaged property as on the dates of those receipts in reduction of the amount from time to time, due to them first on account of interest on the mortgage money and, so far as such receipts exceed any interest due; in reduction or discharge of the mortgage money. The learned Subordinate Judge will also give credit to the defendants for all sums of monies actually expended by them on account of the necessary repairs of the mortgaged premises. So long as the mortgaged properties were actually in the occupation of the defendants, the defendants will be debited with Rs. 7 a month according to the terms of the mortgage bond. The costs in this Court as also in the Court below will abide the result. If on the taking of account a sum of money be found due to the defendants then the defendants will be entitled to costs on the actual sum of money found due to them. If on the contrary nothing is found due to them, then the plaintiffs will be entitled to their costs both in this Court as also in the Court below.

10. There is a revision application against the order of the learned District Judge declining to extend the time for payment of the mortgage money. We think that in the circumstances time ought to be extended and we direct the learned Subordinate Judge to give sufficient time to enable the plaintiffs to bring the money into Court after he has ascertained the sum actually due by the plaintiffs to the defendants.

Kulwant Sahay, J.

11. I agree.