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Ram Brich Narain Singh v. Ambika Prasad Singh
Judicial Opinion — Structured Summary
Factual and Procedural Background
The Plaintiff's father and uncle, by partition, obtained a separate puttee (towzi No. 4101) in the mehal Somraon. A portion (about one-third) of the uncle's half-share was purchased by ancestors of certain Defendants (numbered groups), and the other two-thirds by ancestors of other Defendants. The Plaintiff's father's share was mortgaged to predecessors-in-interest of several Defendants. The Plaintiff subsequently redeemed the mortgage, and upon re-taking possession discovered that various Defendants had purchased holdings amounting to about one-third of the raiyati land of the village. It was found that those holdings were not transferable without the landlords' consent.
The Plaintiff sued seeking (1) a declaration that the Defendants were trespassers and (2) alternatively, possession on payment of the considerations the Defendants paid to tenants. The Court of first instance (Subordinate Judge) held that the purchases were accessions to the mortgaged property and granted relief to the Plaintiff on payment of the considerations. The District Judge reversed and dismissed the suit. The Plaintiff appealed to the higher Court whose opinion is summarized here.
Legal Issues Presented
- Whether the purchases made by the Defendants while in possession as mortgagees constitute "accessions" to the mortgaged property under section 63 of the Transfer of Property Act.
- Whether it is necessary that the mortgagee should have obtained any special advantage, by reason of his position as mortgagee, in order for a purchase to be treated as an accession subject to redemption.
- Whether section 63 of the Transfer of Property Act applies where the purchasers (Defendants) held interests both as co-proprietors and as mortgagees (i.e., whether the section is limited to cases where purchasers hold only as mortgagees).
- What remedies follow if the purchases are held to be accessions — specifically the Plaintiff's right to redeem, payment obligations for expenses incurred by Defendants in acquiring the land, entitlement to possession, mesne profits, and interest or set-off.
Arguments of the Parties
Appellant's Arguments (Plaintiff)
- The purchases by the Defendants should be treated as accessions under section 63 of the Transfer of Property Act; accordingly the Plaintiff, on redemption, is entitled to those accessions.
- The Plaintiff relied on the decision in Raja Kishendatt v. Mumtaz Ali to support the proposition that it is not necessary for the mortgagee to have any special advantage from his position in order for acquisitions by him to be treated as accessions subject to redemption.
Respondents' Arguments (Defendants)
- The District Judge's conclusion was that the mortgagees obtained no special advantages from their position as mortgagees in making the purchases; on that basis the purchases should not be treated as accessions.
- It was contended that section 63 applies only where the purchaser holds the property solely as mortgagee and not where the purchaser holds both as a co-proprietor and as mortgagee.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raja Kishendatt v. Mumtaz Ali (Privy Council) | Illustrates that many acquisitions by a mortgagee may be treated as accessions and therefore subject to redemption; the Privy Council allowed redemption in circumstances where the mortgagee, in possession, acquired subordinate tenures and benefited from his position. | The Court relied on the case to show that redemption may be allowed even where not every purchase by a mortgagee is automatically treated as for the mortgagor's benefit; the Court found the circumstances here warranted allowing redemption and cited Kishendatt to support that outcome. |
| Rakestraw v. Brewer | Support for the principle that an acquisition by a mortgagee can enure to the mortgagor's benefit (additional term coming from the old root), permitting the mortgagor to redeem. | Referred to by the Court as an authority for the general principle that acquisitions by a mortgagee can be treated as accessions subject to redemption, supporting the reasoning that equity can attach to such acquisitions. |
| Doe v. Pott | Holds that if a lord of a manor mortgages it in fee and thereafter purchases and surrenders copy-holds, such acquisitions shall enure to the mortgagee's benefit; used to illustrate the equity that prevents a mortgagee from lessening the security by alienation. | Used by the Court to show the analogous equity that may attach to a mortgagee's acquisitions, particularly where the mortgagee in possession had facilities for obtaining surrenders; the Court cited it in support of treating certain acquisitions as subject to redemption. |
Court's Reasoning and Analysis
The Court examined the legal framework created by section 63 of the Transfer of Property Act and relevant authorities. Two judges' treatments are reflected in the opinion:
Coxe, J. emphasized the equitable and practical consequences of denying redemption here. He noted that the Defendants, collectively, were in possession of the whole estate and had acquired holdings amounting to about a third of the raiyati land. The Court observed that landlords often seek to convert raiyati holdings into khas possession, a policy the Plaintiff would have been able to pursue had he remained in possession. It was considered unjust that after mortgaging his interest the Plaintiff, upon redeeming, should find the state of the village worse for his interests because co-sharers had acquired a significant portion of the land. On that basis the Court concluded redemption should be allowed and the purchases treated as accessions to the mortgaged property.
N.R. Chatterjea, J. undertook a detailed statutory and precedential analysis. He set out section 63 of the Transfer of Property Act which entitles a mortgagor, on redemption (in the absence of a contract to the contrary), to any accession received by mortgaged property while in the possession of the mortgagee; where the accession was acquired at the mortgagee's expense and is separately enjoy-able, the mortgagor must pay the expense to the mortgagee to take it.
The judge contrasted section 63 with section 90 of the Indian Trusts Act (which conditions the mortgagee's duty to account for advantages gained by availing himself of his position) and concluded that section 63 does not make the mortgagor’s right to accessions depend on the mortgagee having gained a special advantage by reason of his position. Consequently, the Court rejected the notion that the mortgagee must have had a special advantage to make acquisitions into accessions.
The Court considered the Respondents' contention that section 63 applies only when the purchaser holds solely as a mortgagee and not when he is also a co-owner. The Court observed that the statutory language refers to "mortgaged property in possession of the mortgagee" receiving any accession, and analogized to natural accession cases to show that proprietary co-ownership did not defeat the mortgagor’s right to his proportional share.
On the facts, the Subordinate Judge had found (based on defendants' own evidence) that the lands purchased had been separated from tenant-held lands; that when the purchases were made the Defendants between themselves represented the entire landlord interest and there was no other person entitled to the rents for the purchased land; and it was not found that purchases were made solely in the character of co-owners. Given these factual findings, the Court held there was no reason to treat the lands other than as accessions, entitling the Plaintiff to them to the extent of his share in the mehal upon payment of the proportionate expense incurred by the Defendants in acquiring them.
On ancillary relief the Court held:
- The Defendants are not entitled to any interest on amounts they spent to acquire the lands; profits they received should be set off against any interest claim in accordance with the last paragraph of section 63.
- The Plaintiff should be awarded mesne profits only from the date a payment date is fixed because it was not found that he previously demanded the lands and offered to pay the expense of acquisition.
Accordingly, the Court concluded that the Subordinate Judge's decree (which treated the purchases as accessions and awarded relief on payment) should be restored but with certain modifications: the first instance Court must determine the amount spent by the Defendants, fix a date for payment, allow set-off of profits against any interest, and limit mesne profits as described.
Holding and Implications
HOLDING: APPEAL ALLOWED.
The higher Court allowed the Plaintiff's appeal, set aside the District Judge's dismissal, and restored the decision of the Subordinate Judge with specific modifications and directions:
- The case is remitted to the Court of first instance to take an account of the amounts the Defendants spent in acquiring the lands and to fix a date for payment of the proportionate share payable by the Plaintiff in order to redeem those accessions.
- If the Plaintiff pays the sum so fixed by the date specified, he will be entitled to recover khas possession of the lands to the extent of his share in the mehal and to costs of all Courts; if the Plaintiff fails to pay by that date, the suit will be dismissed with costs.
- The Defendants are not entitled to interest on the amounts spent acquiring the lands; any profits received by the Defendants are to be set off against interest as provided by section 63 of the Transfer of Property Act.
- Mesne profits are to be awarded only from the date to be fixed for payment, since no prior demand and tender was found to have been made by the Plaintiff.
Implications: The decision applies section 63 of the Transfer of Property Act to purchases by mortgagees in possession of mortgaged property and holds that the mortgagor's right to accessions on redemption does not depend upon a showing that the mortgagee obtained any special advantage by reason of his position. The Court applied existing statute and precedents; it did not purport to lay down a novel rule beyond that statutory application.
Outcome recorded in the opinion: "Appeal allowed."
Coxe, J.:— In this case it is said that the Plaintiff's father and uncle obtained by partition a separate puttee of 8 as in Mehal Somraon. This separate puttee was towzi No. 4101. About a third of the uncle's half share was purchased by the ancestor of Defendants 1 to 4, 9 to 11, and the other two-thirds by the ancestor of Defendants 17 to 24, 26 and 27. Then the Plaintiff's father's share was mortgaged to the predecessors-in-interest of Defendants 1 to 15, 17 to 24, 26 and 27. Subsequently the Plaintiff redeemed the mortgage but on re-taking possession found that the Defendants had severally bought in holdings amounting to about a third of the raiyati land of the village. It is found that the holdings are not transferable without the landlords' consent. The Plaintiff sued to have the Defendants declared trespassers and in the alternative for possession on payment of the considerations for the purchases from the tenants. The first Court held that the purchases were accessions to the mortgaged property and gave the Plaintiff a decree on payment of the considerations. The District Judge dismissed the suits and the Plaintiff appeals.
The first point taken is that the purchases ought to be treated as accessions under sec. 63 of the Transfer of Property Act. The learned District Judge has not accepted this contention because in his opinion the mortgagees obtained no special advantages from their position as mortgagees towards making the purchases. It is argued however that it is not necessary that the mortgagees should have any special advantage to bring them within the scope of sec. 63 of the Transfer of Properly Act and the case of Kishendatt v. Mumtaz Ali has been referred to. In that case their Lordships of the Privy Council, while “not prepared to affirm the broad proposition that every purchase by a mortgagee of a sub-tenure existing a the date of the mortgage must have been taken to have been made for the benefit of the mortgagor,” yet allowed the mortgagor in the circumstances of the case to redeem. It appears to us that in the circumstances of this case redemption should also be allowed. It is evident that the Defendants in these suits as a whole were in possession of the whole estate, though different Defendants had different interests. It is, we think, generally considered a judicious policy for a landlord to try to convert raiyati land into what is called khas possession. If the Plaintiff had been in possession he would also have been able to pursue this policy. But it appears to us unjust that because he has mortgaged his interest to his fellow landlords he should find himself on the redemption of the mortgage in his present position. His co-sharers have acquired a third of the raiyati land of the village and whether the holdings are transferable or not, his right, if he has any, of acquiring khas possession of his interest in the land could not be enforced without a struggle. He has a right, on redemption, to find the village in the same condition as when he mortgaged it; and clearly it is in a condition far more prejudicial to his interest when a third of the land is in the possession of his co-sharers.
In this view of the case it is unnecessary to consider the effect of the purchases against the Plaintiff as landlords and not as mortgagors.
Accordingly, we think that the Appeal should be allowed, the decision of the District Judge set aside, and that of the Subordinate Judge restored. The latter officer, however, has omitted to fix a time for the payment of the purchase-money by the Plaintiff. And we think that he is wrong in allowing mesne profits. Mesne profits can be set off against interest. The case will accordingly go back to the Court of first instance who will take an account of what will be due under his decree for purchase-money and fix a date for the payment of that sum. If the sum is paid the Plaintiff will be entitled to recover possession with costs of all Courts, if not, the suit will be dismissed with costs.
N.R Chatterjea, J.:— The first question to be determined is whether the raiyati land purchased by the Defendants, while they were in possession of the Plaintiff's share of the mehal, as mortgagees, are accessions to the mortgaged property, i.e, to the extent of the Plaintiff's share in the mehal. The learned District Judge was of opinion that they were not accessions, because some of the Defendants were co-owners of the mehal with the Plaintiff and their position as mortgagees did not give them any special advantage or facilities in purchasing the land.
On behalf of the Plaintiff-Appellant the provisions of sec. 63 of the Transfer of Property Act, and the case of Raja Kishendatt v. Mumtaz Ali were relied on, in support of the contention that it was not necessary that the mortgagee should have any special advantage, in order to entitle the mortgagor to the benefit of the accessions.
In the case of Kishendatt v. Mumtaz Ali, certain subordinate birt tenures within a taluk mortgaged, were acquired by the mortgagee in possession and it was found that the mortgagee taking advantage of his position of talukdar de facto had acquired the birts for very inconsiderable sums and allowed them to merge in the taluk. But the judgment of the Privy Council did not rest exclusively on these circumstances. Their Lordships while not prepared to affirm the broad proposition that every purchase by a mortgagee of a sub-tenure existing at the date of the mortgage, must be taken to have been made for the benefit of the mortgagor (for instance a putni or mokurari tenure purchased by the mortgagee of a zemindari with his own funds and for his own benefit), observed that the general principle recognised in English law was that most acquisitions by mortgagor enure for the benefit of the mortgagee and that on the other hand many acquisitions by the mortgagee are in like manner treated as accessions to the mortgaged property and therefore subject to redemption. Their Lordships referred to (among others) the case of Rakestraw v. Brewer(2), where the mortgagee of an original term in respect of certain chambers in Inns of Court, was granted an additional term, to commence after the expiration of the old term, as a pure personal favour and kindness to a brother bencher and which probably would not have been given to the representatives of the mortgagor who were females, and the latter were allowed to redeem on the ground that the additional term comes from the old root, and observed that the law laid down in that case had never been impeached, and referring to the case of Doe v. Pott(3), where it was held that if the lord of a manor mortgage it in fee and afterwards, pending the security, purchase and take surrender to himself in fee of copy-holds held of the manor, they shall enure to the mortgagee's benefit, and the lord cannot lesson the security by alienating them, said, “it is difficult to see, why as in the case of a renewable lease, the same equity should not attach to the mortgagee, particularly, if by reason of his position as mortgagee in possession he has had peculiar facilities for obtaining the surrenders”. So the fact that the mortgagee in Kishendatt's case had peculiar facilities for obtaining the surrenders of the birt tenures by reason of his position as mortgagee in possession appears to have been relied on only as an additional ground for holding that the same equity should attach to the mortgagee as in the case of a renewable lease.
The law as to accessions to mortgaged property in this country is now formulated in sec. 63 of the Transfer of Property Act, which provides that where mortgaged property in possession of the mortgagee has during the continuance of the mortgage received any accession, the mortgagor, upon redemption, shall in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession, and where the accession has been acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it.
The mortgagor's right to the accession, under the provisions of the section, does not appear to depend upon whether the mortgagee had any special advantage by reason of his position as mortgagee, in acquiring the accession, and in this res-pet the section seems to go further than sec. 90 of the Indian Trusts Act, under which the mortgagee holds an advantage for the benefit of the mortgagor, only when he gains it by availing himself of his position as such, and in derogation of the rights of the mortgagor.
It is contended on behalf of the Respondents that sec. 63 of the Transfer of Property Act applies to a case where the mortgage? holds the property only as a mortgagee and not where, as in the present case, the mortgagees held the mehal both as co-proprietor and as mortgagee, but the section provides that where the mortgaged properly in possession of the mortgagee has during the continuance of the mortgage received any accession, the mortgagor is entitled to it on redemption. Had the mehal received a natural accession, such as land gained by alluvion, it could not be contended that bacause the mortgagee had a share in the mehal in proprietary right, the mortgagor was not entitled to the accession to the extent of his proportionate share in the mehal. The only difference between such a case and a case where the accession is acquired is that in the latter the mortgagor pay must to the mortgagee the expense of acquiring it.
It is unnecessary to consider whether every purchase of a sub-tenure by a mortgagee can be called an accession and how far the principles laid down by the Privy Council in the case cited above have been modified by the provisions of sec. 63 of the Transfer of Property Acc. In the present case we are concerned with ordinary raiyati holdings.
Under sec. 63 of the Transfer of Property Act, the question is, whether the property is an accession. If the lands purchased in the present case are accessions, the Plaintiff is entitled to them to the extent of his share in the mehal.
The Court of first instance found upon the evidence adduced by the Defendants themselves that the lands purchased by the Defendants had been separated from the lands which are in the possession of the tenants, and this finding, so far as it goes, has not been set aside by the lower Appellate Court. The Defendants, though holding different interests in the mehal and in the mortgage, represented between themselves the entire interest of the landlord for the time being, when the purchases were made. There was no one else to whom the portion of the rent which was payable for the lands purchased by them, could be paid during the subsistence of the mortgage. It has not been found that the purchases were made by the Defendants in their character as co-owners only. Under the circumstances there is no reason why the lands should not be treated as accession, and why the Plaintiff should not be entitled to the benefit of it to the extent of his share in the mehal on payment to the Defendants of the proportionate share of the expense incurred in acquiring them. In this view it is unnecessary to consider the rights of the Plaintiff, as landlord, to khas possession of the lands.
The Defendants are not entitled to any interest on the amount spent by them in acquiring the lands: the profits received by them should be set off against the interest (see last para, of sec. 63, Transfer of Property Act).
The Plaintiff should get mesne profits only from the date which may be fixed for the payment hereinafter referred to, as it has not been found that he demanded the lands and offered to pay to the Defendants the expense of acquiring the lands. The decree of the lower Appellate Court will be set aside, and that of the Court of first instance restored with the modification stated above. The case will go back to that Court for determining the amount paid by the Defendants for acquiring the lands and it will fix a date for payment of the said amount, on payment of which the Plaintiff will get khas possession of the lands to the extent of his share in the mehal, together with costs of all Courts, and in default of such payment the suit will be dismissed with costs of all Courts.
S.C.M
Appeal allowed.
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