Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Smart Summary

Summary of the Opinion of Jenkins, C.J. (with Holmwood, J. concurring)

Factual and Procedural Background

The central dispute concerns the respective rights of a purchaser under a mortgage decree (the Plaintiff, who purchased at a court sale) and a lease-holder in possession who was not a party to the mortgage suit (the contesting Defendant / lessee). The Plaintiff seeks possession of the property purchased or, alternatively, that the lessee be directed to redeem.

The land in question was subject to multiple mortgages executed by two brothers, Debendra Narayan and Upendra Narayan, each holding a 1/4 share of the family property. Key mortgages were dated 3 May 1894 (Debendra, securing Rs. 400), 10 January 1896 (Upendra, securing Rs. 1,900), 13 June 1898 (Debendra and Upendra, securing Rs. 5,000) and 3 October 1898 (Debendra and Upendra, securing Rs. 15,000).

Suit No. 41 of 1900 was brought on Debendra's first mortgage and a decree for sale (relating to the 3 May 1894 mortgage) was passed on 8 July 1901; Indra Narayan Pal purchased the 1/4 share at that court sale. Later suits (including suit No. 57 of 1904 by Upendra Nath Mukherjee) resulted in decrees directing sale free from encumbrances and providing for payment of sums due on earlier mortgages with a power to redeem. In June 1907 the property was sold in suit No. 57 of 1904 and bought by the Plaintiff (Balmukunda Ruyia) for Rs. 30,000; the sale was confirmed after payment of the balance.

Possession disputes and associated criminal proceedings followed. On 23 February 1911 the present suit for possession (or redemption) was instituted and heard by the Subordinate Judge, 2nd Court of Hughly. The Subordinate Judge's decree required, in effect, that the lessee could resist the Plaintiff's claim for possession by redeeming the property on terms set out in that decree (specified redemption sums for the first and second mortgages) but dismissed the Plaintiff's claim for interest after the confirmation of the sale in suit No. 57 of 1904. Both Plaintiff and Defendant appealed (Plaintiff by appeal; Defendant by cross-objections).

Legal Issues Presented

  1. What are the respective rights of a purchaser under a mortgage decree and of a lease-holder in possession who was not a party to the mortgage suit?
  2. Whether leases granted by the mortgagor after a legal/simple mortgage bind the purchaser or mortgagee, and whether such a lessee must redeem the mortgage to retain possession.
  3. Whether the particular leases in question impaired the value of, or impeded the operation of, the mortgages relied upon by the Plaintiffs (so as to render those leases inoperative against the purchaser).

Arguments of the Parties

Plaintiff's (Purchaser's) Position

  • The Plaintiff sought possession following purchase at the court sale, alternatively asking that the lessee be directed to redeem the mortgages.
  • The Plaintiff challenged the lessee's right to remain in possession and sought enforcement of the purchaser's rights arising from the mortgage decree and the confirmed sale.

Defendant (Lessee)'s Arguments

  • The lessee relied on certain leases, contending that those leases either vested in him a title paramount or had become binding on the Plaintiff by recognition or otherwise.
  • The lessee claimed the suit was barred by limitation and advanced other unspecified defences.
  • The lessee maintained that he was entitled to retain possession without redeeming the Plaintiff's title.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Keech v. Hall Illustrates an English rule (rule of conveyancing) concerning priorities and conveyancing consequences of leases made after creation of a legal mortgage. The court observed that the rule in Keech v. Hall is a rule of conveyancing applicable to English law of legal mortgages, but it would be a mistake to directly apply English rules to the relations resulting from an Indian simple mortgage. Thus Keech v. Hall was mentioned to distinguish English legal-mortgage doctrine from Indian simple-mortgage situations.
Banee Pershad v. Reet Bkunjun Singh Holds that under an Indian simple mortgage the mortgagor may create a temporary lease in the ordinary course of management so long as nothing is done which impairs the value or impedes the operation of the mortgage. The court relied on this decision to support the proposition that a simple mortgage does not, as a matter of conveyancing, arrest the mortgagor's power of leasing and that temporary leases made by the mortgagor can be valid against subsequent purchasers provided they do not impair the mortgage security or impede its operation. Applying that principle, the court found no evidence the challenged leases impaired or impeded the mortgages and treated the leases as operative.

Court's Reasoning and Analysis

The court analyzed the dispute by distinguishing the English legal-mortgage rules from the law governing Indian simple mortgages. It explained that English cases (exemplified by Keech v. Hall) reflect conveyancing consequences where possession may pass with a legal mortgage; in contrast, under an Indian simple mortgage the mortgagor retains possession and the mortgagee's right is primarily to cause a sale for recovery of debt.

Relying on Banee Pershad v. Reet Bkunjun Singh, the court stated the settled principle that a mortgagor may create a temporary lease in the ordinary course of management so long as the lease does not impair the value of the mortgage security or impede its operation. The court observed that this aspect had not been fully developed at trial, but that the record did not show the first mortgage's security was impaired or its operation impeded by the first two leases.

The court examined the evidence about the local character of the land (from the Commissioner's report), noting the disputed land lay in a thickly populated commercial quarter and that the leases involved building operations, and observed the small size of the first mortgage (Rs. 400). The Subordinate Judge's view that execution of the leases did not render the mortgage security insufficient was accepted; the appellate court found no basis to overturn that finding.

Important evidentiary and factual points reinforced the court's conclusion that the leases were operative against the Plaintiff: (1) the Subordinate Judge found that the purchaser bought with notice of the leases; (2) no complaint was made by the first mortgagees or by Indra Narain (who purchased under the earlier decree); and (3) Indra Narain had expressly recognised and adopted the leases—instituting and obtaining a decree in a suit for rent based on the registered kabuliyats of 27 October 1894 and 17 January 1895, and paying rent into the Receiver in suit No. 57 of 1904.

Based on this combination of legal principle (per Banee Pershad), absence of proof of impairment to mortgage security, the purchaser's notice, and prior recognition of the leases by a purchaser under an earlier decree, the court concluded the specific leases of 27 October 1894 and 17 January 1895 could not be treated as inoperative by the Plaintiffs and that the lessee was under no obligation to redeem.

The court then considered the Subordinate Judge's decree for any drafting errors and noted a necessary modification: a phrase in the decree referring to "the land covered by the third and fourth leases, dated the 22nd November 1897" should be altered to read "covered by the mortgage of the 16th of January 1896." Because the lessee stated he did not intend to redeem the mortgage of 16 January 1896, the court found it unnecessary to decide whether the Subordinate Judge erred in disallowing interest up to the date of the suit.

Holding and Implications

Core Ruling: The appellate court dismissed the Plaintiff's claim for possession in respect of the plots covered by certain tenancies and leases, affirmed the remainder of the Subordinate Judge's decree with a specific textual modification, and ordered costs as specified.

Detailed Disposition

  • The Plaintiffs' claim is dismissed as to the plots comprised in the tenancies to which the kobalas of 14 March 1888 and 9 November 1903 relate (measuring 3 kattas and 7 kattas 6 chittaks respectively); the decree will embody the agreed terms between the parties regarding these tenancies.
  • The Plaintiffs' claim is dismissed as to the plots comprised in the leases dated 27 October 1894 and 17 January 1895 (measuring 7 kattas 2 bighas and 8 kattas respectively).
  • The remainder of the Subordinate Judge's decree is to stand, subject to the modification that a clause referring to land "covered by the third and fourth leases, dated the 22nd November 1897" be replaced by the words "covered by the mortgage of the 16th of January 1896." (This alteration corrects a drafting oversight.)
  • The lessee is under no obligation to redeem in respect of the two leases of 27 October 1894 and 17 January 1895 (the court held those leases operative against the Plaintiff).
  • Costs: The Appellants must pay Defendant No. 1 half his costs of the appeal and pay two gold mohurs as hearing-fee to each of Defendant Nos. 2 and 12.

Implications

The direct effect of the decision is to leave the lessee in possession with respect to the specified leases/plots and to affirm the Subordinate Judge's decree in other respects, subject to the textual modification noted. The court applied established precedent (Banee Pershad v. Reet Bkunjun Singh) to hold that leases made by a mortgagor under a simple mortgage can be valid against a purchaser where the mortgage security is not impaired and the purchaser had notice or the leases were otherwise recognised. The opinion does not announce a new legal principle but applies existing authorities and findings of fact to the circumstances before the court.

Concurrence: Holmwood, J. agreed with the judgment.

    Balmukund Ruyia v. Moti Lal Barman

    Jenkins, C.J:— The contest on this appeal is as to the respective rights of a purchaser under a mortgage decree and a lease-holder in possession who was not a party to the mortgage suit. The Plaintiff in this suit is the purchaser and the contesting Defendant is the lease-holder. The Plaintiff prays for possession or in the alternative that the lease-holder be directed to redeem.

    The other Defendants are the mortgagors and former claimants under mortgages or their representatives. The two mortgagors are Debendra Narayan, who is represented by Defendant No. 3, and his brother Upendra Narayan Defendant No. 4. These brothers were the sons of Joy Narayan Saha, a Hindu governed by the Bengal School of Law, who died before the mortgages to which I will next refer. On his death each of these brothers became entitled to ¼th share in the family property, their uncle, with whom we have no concern, being entitled to the other moiety.

    On the 3rd of May 1894, Debendra mortgaged his ¼th of the property in suit to the Defendant Srimati Iswari Debi and Srimati Bhuban Mohini Debi, the mother of Defendants 7 and 8, to secure Rs. 400 with interest at 2 per cent, per mensem with monthly rests.

    On the 10th of January 1896, Upendra mortgaged his ¼th share in the property to Panchanan Prosad Kundu who is now represented by Defendants Nos. 10 and 11 to secure Rs. 1,900 with interest.

    On the 13th June 1898 Debendra and Upendra mortgaged the property in suit to Upendra Nath Mukherjee, father of Defendant No. 2, to secure Rs. 5,000 with interest.

    On the 3rd of October 1898 the two brothers again mortgaged the property to Upendra Nath Mukherjee to secure Rs. 15,000 with interest.

    These are the mortgages with which we are concerned in this suit and I now pass on to describe what was done with them.

    On the 26th of May 1900 a suit No. 41 of that year, was brought on Debendra's 1st mortgage, and on the 8th of July 1901 a decree for sale was passed. The ¼th share of the property in suit was bought at the Court sale by Indra Narayan Pal, Defendant No. 9.

    In 1904 suit No. 57 of that year was instituted by Upendra Nath Mukherjee on his two mortgages and he joined as Defendants Debendra and Upendra and their mother, the two ladies who were mortgagees under Debendra's first mortgage, Indra Narayan Pal, the mortgagee under Upendra's first mortgage and P.N Mallik to whom this last mortgage had been transferred on the 22nd October 1900.

    In 1905 suit No. 55 of that year was instituted by P.N Mallik on Upendra's first mortgage and the Defendants to that suit were Upendra, Debendra and their mother, the Kundus who had transferred to P.N Maltik the mortgage then in suit, Upendra Nath Mukherjee, the predecessor of the present contesting Defendant and others who need not be particularised.

    On the 30th June 1905 a decree was passed in suit No. 57 of 1904 brought by Upendra Nath Mukherjee and thereby a sale of the mortgaged properties was directed free from all incumbrances, and it was ordered that Indra Narayan Pal should get payment first out of ¼th of the sale-proceeds of the sum of Rs. 2,178-2-6 due on account of the mortgage bond, dated the 3rd May 1894, with interest at the rate of the bond up to the 12th August 1901 and certain other sums making a total of Rs. 2,305-7-0. Similarly Rs. 7,670 odd was directed to be paid in respect of the mortgage of January 10th, 1896. There then followed a power to redeem.

    On the 23rd May 1906 a decree in the suit was passed directing a sale subject to the mokurari maurasi right and the pattas there described. And it was noted that Upendra Nath Mukherjee had obtained a decree in suit No. 57 of 1904.

    On the 17th June 1907 the property in suit was put up to sale in suit No. 57 of 1904 and was bought by the Plaintiff Balmukunda Ruyia at Rs. 30,000. A deposit of Rs. 7,500 was paid, and after the balance had been paid the sale was confirmed.

    Difficulties as to possession followed with the usual sequel of criminal proceedings and ultimately on February 23rd, 1911, this suit was instituted. The suit was heard by the Subordinate Judge, 2nd Court of Hughly.

    By way of defence, the lessee the contesting Defendant relied on certain leases which according to them either vested in him a title paramount, or had become binding on the Plaintiffs by recognition or otherwise. The lessee also claimed that the suit was barred against him by limitation, and advanced other defences.

    The result of the trial was that the Subordinate Judge decided in effect as to the bulk of the property that the lessee would only resist the Plaintiffs' claim for possession by redeeming the property on the terms stated in the Court's decree.

    According to those terms the lessee had to pay Rs. 2,172-14-0 in redemption of the first mortgage and Rs. 6,780-11-2½ in redemption of the second mortgage but the Plaintiffs' claim for interest after the confirmation of the sale under the decree in suit No. 57 of 1904 was dismissed.

    Neither party was satisfied with this decree and so the Plaintiffs have appealed and the. Defendant has filed cross-objections. To appreciate the points at issue it is necessary to observe the dates of the leases on which the Defendant lessee relies. Some purport to have been transferred, and the rest have been granted direct to the lessee's predecessor. Those said to have been transferred may be eliminated from discussion for the contesting parties have come to the following arrangement regarding them. “It is agreed between Mr. B.C Mitter on behalf of the Appellants and Sir Rash Behary Ghosh on behalf of the Respondent that the tenancies to which the kobalas of 14th March 1888 and 9th November 1903 relate came into existence prior to the mortgage of 3rd May 1894 and that no notice to determine the same has been given, but this Court is not to affirm but to leave open whether those leases are maurasi mokurari or not so that, if necessary, that point may be determined in subsequent litigation. As a result of this the decision of the Subordinate Judge dismissing the suit in relation to the property comprised in these tenancies is to be confirmed be this ground but on this ground alone.” The direct leases are dated the 27th of October 1894 and the 17th of January 1895 and two the 22nd of November 1897. Thus it will be seen that all are subsequent to the first mortgage and the last two are subsequent to the second mortgage. But no cross-objection has been preferred as to these last two so that the only contest is as to whether the first two prevail over the Plaintiffs right to possession. These leases are each for 50 years with an option of renewal for 10 years and it has not been, nor could it be, maintained that the leases did not at least entitle the lessee to redeem. But the lessee maintains that he is entitled to retain possession without redeeming the Plaintiffs.

    The relative positions of a mortgagee and of a tenant under a tenancy created by the mortgagor after a legal mortgage is well settled in England, but it would be a mistake to apply these English rules to the relations resulting from an Indian simple mortgage. The rule of Keech v. Hall, the leading English case, is one of conveyancing but under a simple mortgage the mortgagor does not part with possession, and the right of a mortgagee is merely to cause the mortgaged property to be sold for the payment of his debt.

    And so we find that a simple mortgage does not as matter of conveyancing arrest the mortgagor's power of leasing in the ordinary course of management. Thus in Banee Pershad v. Reet Bkunjun Singh it was decided—and the propriety of the decision has never been questioned—that as long as nothing took place which impaired the value or impeded the operation of the mortgage, the mortgagor in creating a temporary lease acted within his powers. This aspect of the case was not developed as fully as it might have been at the trial. It has not been shown that the first mortgage was impaired in value or impeded in operation by the first two leases. There is no evidence as to what class of lease is ordinarily granted in the case of properties such as that in suit, and the only restriction on leasing mentioned in the mortgage is against the granting of a kayemi maurasi. The impugned leases do not come within that description.

    We learn from the Commissioner's report that “the disputed land is situated in the town of Salkia adjoining the Bandaghat and appertains to a very thickly populated and important commercial quarter of the town lying as it does exactly on the river Hughly over the disputed land and that on the north of it there exist the jute press and godowns of the Defendant.” And so the lease involved building operations. At the same time the first mortgage was only for Rs. 400 and the view of the Subordinate Judge was that it could not be said that the mortgage security even of the first and second mortgages became insufficient by the execution of these leases. Nor can it be urged that the Plaintiffs have been taken by surprise, for the lower Court has held that the purchaser bought with notice of the leases, and no attempt has been made to impugn the correctness of this finding.

    Moreover no complaint was made by the first mortgagees or by Indra Narain who purchased under their decree.

    On the contrary Indra Narain under whom the Plaintiffs claim so far as they rest on the first mortgage recognised and adopted the leases in the most unequivocal manner, for he brought a suit expressly on them and obtained a decree.

    This suit was instituted in the Court of the Munsif at Howrah in 1907 and thereby rent was claimed and recovered on the registered kabuliyats of the 27th October 1894 and the 17th January 1895. And before, this rent was also paid to the Receiver appointed in suit No. 57 of 1904, the suit in which the Plaintiff's purchase was made. In view of these facts I do not think the two leases of the 27th October 1894 and the 17th January 1895 can be treated by the Plaintiffs as inoperative, and I hold that the lessee is under no obligation to redeem. Mr. B.C Mitter at one time thought that the lessee had made an admission as to boundaries favourable to him, but in this he was manifestly mistaken.

    The result then is that the decree of the Subordinate Judge will stand as to the plots comprised in the mortgage of the 16th January 1896, for as to these no appeal has been preferred, but it will be subject to a modification to which the Plaintiffs assent, as by an oversight the decree has been so expressed as to give rise to possible error. The decree as drawn directs that the Plaintiffs will be entitled to get a decree for foreclosure against Defendant No. 1 with respect to the land covered by the third and fourth leases, dated the 22nd November 1897 and the 22nd November 1897 respectively.

    This must be altered by substituting the words “covered by the mortgage of the 16th of January 1896.” In view of the statement made on behalf of the lessee that he does not propose to redeem the mortgage of the 16th January 1896 it becomes unnecessary to consider whether the Subordinate Judge erred in disallowing interest up to the date of the suit. There will be a statement to that effect embodied in the decree.

    The result then is that the Plaintiffs' claim is dismissed as to the plots comprised in the tenancies to which the kobalas of 14th March 1888 and 9th November 1903 relate, that is to say the plots measuring 3 kattas and 7 kattas 6 chittaks and in this connection there will be embodied in the decree the terms to which the parties have agreed.

    The Plaintiffs' claim will also be dismissed as to the plots comprised in the leases dated the 27th October 1894 and 17th January 1895 and measuring 7 kattas and 2 bighas and 8 kattas respectively.

    The rest of the Subordinate Judge's decree will stand with the variation which I have indicated. The Appellants must pay the Defendant No. 1 half his costs of this appeal and two gold mohurs as hearing-fee to each of the Defendant Nos. 2 and 12.

    Holmwood, J.:— I agree.

    Use AI to get other relevant cases.

    Comments

    Balmukund Ruyia v. Moti Lal Barman
    (Aug 4, 1915)