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Har Pershad v. Ram Chander And Ors.

Allahabad High Court
Jul 25, 1921
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Summary of the Opinion

Factual and Procedural Background

Two brothers, Jhamman and Dhani Ram, executed on 28 January 1880 a usufructuary mortgage of two-thirds of certain Zemindari property in favour of Har Pershad for Rs. 332. The mortgagee obtained possession and mutation in his favour. Subsequently Jhamman executed (on 28 June 1881) a further document in favour of Har Pershad by which he borrowed Rs. 50 (expressed in the opinion as with interest at "2 per cent. per mensem"). That later document included a covenant that the mortgaged land would not be redeemed without payment of the sum secured by that document.

Jhamman and the heirs of Dhani Ram sold parts of their shares to Ram Chander and to other defendants (defendants Nos. 4 and 5). Ram Chander deposited Rs. 332 under Section 83 of the Transfer of Property Act, but Har Pershad refused to withdraw that deposit on the ground that the amount payable under the 28 June 1881 document had not been paid and, therefore, the property could not be redeemed or taken out of his possession.

Ram Chander applied to the Revenue Court for mutation of names on the basis that the 1880 mortgage had been redeemed; mutation was granted and Har Pershad apparently lost possession as mortgagee. Har Pershad then sued for possession of the two-thirds share mortgaged to him and for mesne profits. The trial Court of first instance dismissed his claim; the lower Appellate Court decreed it in his favour; on appeal to the High Court the learned Judge who heard the appeal restored the decree of the Court of first instance. The present opinion arises out of an appeal under the Letters Patent from that order.

Legal Issues Presented

  1. Whether the document dated 28 June 1881 created a further mortgage (an additional encumbrance) on the share of Jhamman that had already been mortgaged on 28 January 1880, such that the mortgaged property could not be redeemed until the sum secured by the 1881 document (with interest) was also paid.
  2. Whether, if the 1881 document is an additional mortgage, the mortgagee (Har Pershad) was entitled to retain possession of the property until the amount of the two documents together had been paid.
  3. Whether the 1881 document conferred an immediate right on the creditor to sue for the money (with the consequence, argued by respondents, that any claim under that document might be barred by limitation).
  4. Whether Ram Chander (the purchaser who deposited Rs. 332) must be treated as a tenant such that the remedy for recovery of possession would be excluded from the Civil Court (i.e., whether the suit for possession was improper because the defendant was a tenant).
  5. Procedurally, whether the plaintiff's claim for possession of the share attributable to Dhani Ram was maintainable (the opinion notes a concession on this point).

Arguments of the Parties

Appellant / Plaintiff (Har Pershad)

  • The 28 June 1881 document should be construed to create an additional mortgage (described in the deed as "mashrut-ul-rahn") on Jhamman's one-third share already under the 1880 usufructuary mortgage, thereby making the property security for the additional Rs. 50 advance.
  • Because the 1881 document made the property security for the additional loan and provided that the property would not be redeemed without payment of that sum, the mortgagee was entitled to retain possession until both debts were discharged.
  • The suit is one for recovery of possession of mortgaged Zemindari property (not agricultural tenancy law), and thus civil remedies for recovery of possession are appropriate; the tenancy plea is inapplicable.

Respondents / Defendants

  • It was contended that the 1881 document did not create a usufructuary mortgage and therefore did not place an additional charge on the property.
  • It was further contended that under the 1881 document the creditor could sue to recover his money, and consequently any claim under that document was time-barred (statute of limitations) and could not be enforced.
  • A later contention (raised for the first time in this Court) was that Ram Chander should be treated as a tenant, which would make the Civil Court remedy for ejectment inappropriate.

Additional procedural/strategic points in the record: the appellant conceded that as to Dhani Ram's share the plaintiff's claim for possession was not maintainable because Dhani Ram was not a party to the 1881 document.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ranjit Khan v. Ramdhan Singh, 2 Ind. Cas. 859 : 31 A. 482 : 6 A.L.J. 654 Illustrates that where a subsequent document exists, the earlier mortgage may not be redeemable unless the amount of the second document is paid. The court regarded this as the case most nearly resembling the present matter; it observed that the judges in that case held that, in any event, the earlier mortgage could not be redeemed unless the amount of the second document was paid, and relied on that principle in support of holding that the 1881 document operated as an additional encumbrance requiring payment before redemption.
Muhammad Hussain v. Sheodarshan Das, 4 A.L.J. 176 : A.W.N. (1907) 71 Supports the contention (advanced by respondents' counsel) that in a suit for redemption the question might be whether the prior mortgage could be redeemed without payment of a subsequent document (particularly where a co-mortgagor was not party to the subsequent document). The court noted that this case "supports his contention to a great extent," but distinguished it on the ground that the present suit was not a suit for redemption; instead the question was whether the mortgagee could retain possession until both sums were paid. Thus the precedent was acknowledged but not followed for the present remedy.
Hari Mahadaji Savarkar v. Balambhat Raghunath Khare, 9 B. 233 : 5 Ind. Dec. (N.S.) 155 Discussed in relation to whether a subsequent document should be deemed a simple mortgage and whether the subsequent document must necessarily be discharged prior to the earlier mortgage under certain terms. The court referred to this case but disagreed (with respect) that the subsequent document in that case showed the subsequent document was not a mortgage on the earlier property; the opinion expresses inability to agree with an interpretation that would deny the subsequent document the character of a mortgage on the property comprised in the earlier deed.
Ram Narain Lal v. Lala Murlidhar, 58 Ind. Cas. 129 : 5 P.L.J. 644 : 1 P.L.T. 916 Cited as a contrasting decision whose facts and circumstances differ from the present case. The court observed that the facts and circumstances of that case were different and stated it was unnecessary to say whether it agreed with that decision; accordingly the precedent was cited but not applied to support the present holding.

Court's Reasoning and Analysis

The Court's analysis proceeded primarily on construction of the 28 June 1881 document. The key points of the Court's reasoning, drawn strictly from the opinion, are:

  1. The 1881 document explicitly referred to the earlier 28 January 1880 mortgage at its commencement, stated that the executant (Jhamman) borrowed a further Rs. 50 from the same creditor, and contained a covenant translated in the record: "The stipulation is that when I shall redeem the land mortgaged I shall also pay the said amount with interest at the stipulated rate and then the mortgaged property shall be redeemed. Without payment of the said sum the property shall not be redeemed."
  2. On the plain language of that clause, the Court concluded the effect of the clause was to create a further mortgage on the share of Jhamman already under the earlier mortgage. The document made the property already mortgaged security for the additional debt incurred under the 1881 document.
  3. The Court treated the 1881 document as falling within the scope of Section 58 of the Transfer of Property Act (noting that the document had been executed before the Act was enacted, but that, in any case, it would fall within Section 58). The document was described in itself as "mashrut-ul-rahn" (a mortgage or additional mortgage).
  4. Because the document operated as an additional mortgage, the mortgagee's right to retain possession continued until the amount payable under the 1881 document was discharged. Thus, the mortgagee could not be dispossessed until the whole of the two sums secured by the two documents had been paid.
  5. The Court rejected the respondents' argument that the 1881 document conferred a right to sue for the money (which would engage limitation). The Court held that if the document is an additional usufructuary mortgage (as the Court held), it does not confer a right to sue for the money, and therefore no question of limitation arises.
  6. The Court also rejected the contention that Ram Chander must be deemed a tenant, noting that (a) this plea had not been put forward in earlier Courts or in the earlier stage before the judge who decided the matter, and (b) the suit did not relate to agricultural land and the property in dispute was Zemindari property; accordingly no question of tenancy arose to defeat the civil suit for recovery of possession.
  7. The Court observed that no rigid rule governs such constructions and that each document must be construed with reference to its terms and circumstances; other rulings were referred to but the Court found it unnecessary to discuss those at length given its construction of the document in this case.

Holding and Implications

Holding (core ruling): The Court allowed the appeal in part and modified the decree of this Court by decreeing in the plaintiff's favour for possession of half of the property claimed by him. The remainder of the plaintiff's claim was dismissed. The order of the Court records: the appeal is allowed in part, and a decree is made in the plaintiff's favour for possession of half of the property claimed by him.

Implications and consequences:

  • The Court's construction establishes that the 28 June 1881 document operated as an additional mortgage on Jhamman's share already under the 1880 usufructuary mortgage, thereby justifying the mortgagee's retention of possession until the sum secured by the 1881 deed (with interest) was paid.
  • The mortgagee's right to retain possession extends to the share covered by the 1881 document; however, the plaintiff's claim as to the share attributable to Dhani Ram was conceded to be not maintainable and that part of the claim was dismissed.
  • No broad new precedent beyond the application to these facts is asserted; the Court emphasized that each document must be construed on its own terms and declined to lay down a rigid rule. The decision applies the construction to the present documents and parties and results in a partial success for the plaintiff (possession of half of the property claimed) and partial failure for the remainder.
  • Costs: the parties will pay and receive costs in all Courts in proportion to failure and success; costs in this Court include fees on the higher seals.
Show all summary ...

1. The fasts of this case are these: Two brothers, Jhamman and Dhani Ram, made a usufructuary mortgage of two-thirds of certain Zemmdari property id favour of Har Pershad on the 28th of January 1880 for a sum of Rs. 332. Under that mortgage the mortgagee obtained possession and got mutation of names in his favour. Subsequently Jhamman executed a document in favour of the same mortgagee, Har Pershad, by which he borrowed Rs. 50, with interest at the rate of 2 per cent. per mensem, and the contention is that this document treated a usufructuary mortgage and placed on the, property a further harden for the payment of the money secured by it. That is the Question we have to consider in the present sate. Jhamman sold a part of his share in the property to the defendant Ram Chander. The, heirs of Dhani Ram also sold part of Dhani Ram's share to the same defendant and to defendants Nos. 4 and 5. The defendants last mentioned have not appeared and they have not contested the claim. Ram Chander made a deposit of Rs. 332 under Section 83 of the Transfer of Property Act. This sum the mortgagee, Har Pershad, refused to withdraw, alleging that the amount payable under the mortgage of the 28th of June 1881 should also have been deposited and without payment of that sum the property could not be redeemed and could not be taken out of his possession. Ram Chander, however, did not make any further deposit, hut he applied to the Revenue Court for mutation of names on the allegation that the mortgage of 1880 had been redeemed and that he had become the owner of the property. Mutation of names was granted in his favour and apparently Har Pershad, the mortgagee, was deprived of his possession as mortgagee of the proprietary interests. He thereupon instituted the present suit claiming possession of the two-thirds share mortgaged to him on the 28th of January 1880 and some mesne profits. The Court of first instance dismissed his claim the lower Appellate Court decreed it, but on appeal to this Court the learned Judge who heard the appeal restored the decree of the Court of first instance. Hence this appeal under the Letters Patent.

2. It has been conceded before us on behalf of, the appellant that so far as the half share of Dhani Ram is concerned, the claim for possession by the plaintiff is not maintainable. Dhani Ram was no party to the subsequent bond of the 28th of June 1881 and, therefore, all that he was liable for was the amount of the prior mortgage of 1880, We have, therefore, to consider in this appeal whether the plaintiff is entitled to recover possession of the remaining half of the mortgaged property on the ground that the amount of the subsequent document of the 28th of June 1881 has not been paid. The decision of this question depends upon the construction of the document last mentioned. It, must be observed that no hard and fast rule, can be laid down and that each case must be: decided upon the construction of the particular document and the circumstances connected with it, and that upon the question of construction no light can be derived from the construction of similar documents in other cases. Coming now to the document of the 28th of June 1881 it refers at its commencement to the one third share of Jhamman, the executant of that document, which was already under mortgage to the plaintiff, Har Pershad, under the earlier document; of 1880. He then proceeded to state that he was borrowing a further sum of Rs. 50 from the same creditor, and he added the following covenant as translated in the paper book before us: "The stipulation is that when I shall redeem the land mortgaged I shall also pay the said amount with interest at the stipulated rate and then the mortgaged property shall be redeemed. Without payment of the said sum the property shall not be redeemed." We have to consider what the intention of the executants as this document was in inserting this clause in it. In my opinion the effect of this clause was to create a farther mortgage on the share of Jhamman, which was already under mortgage with the creditor under the document of the 28th of January 1880. The provision in the document is, as quoted above, that the property shall not be redeemed or released from the possession of the mortgagee unless the amount of the subsequent document was also paid. Therefore, it is clear that in order to release the property from the possession of the mortgagee, Jhamman or his successors-in-title had to pay not only the amount of the prior mortgage of 1880 but also the amount secured by the subsequent document of 1881. The property already under mortgage, to which reference was made at the commencement of the document, was, in my opinion, made security for the additional debt incurred under the document of 1881. So that the document of 1881 is a mortgage within the meaning of Section 58 of the Transfer of Property Act, At the conclusion of the document it is described as mashrut-ul-rahn," that is, a mortgage, or, more correctly speaking an additional mortgage. It is thus obvious that the intention of Jhamman was that he would not have the right to redeem the property unless he paid the two amounts already mentioned. It is urged that the subsequent document could not be deemed to be a usufruatuary mortgage. I may observe In the first place that I do not agree with this contention. I may, however, also mention that the document which we have to consider in the present case was executed before the Transfer of Property Act was enacted, and, therefore, we have not to consider whether the document creates a pure usufruatuary mortgage within the definition contained in the Transfer of Property Act; in any case it is a document which would fall within the purview of Section 58 of the said Act. In my opinion a document of this description should be deemed to be a document which creates a further encumbrance on the property and adds to the amount of the original usufruatuary mortgage, and is a mortgage for the amount assured by it. As I have stated at the, commencement of this judgment, each document should be construed with reference to its own terms and the circumstances Under which it was executed. The document in the present case seems to me to be a further mortgage on the same property and having regard to its terms, the mortgagee was entitled to continue in possession until the amount payable under this document was discharged, A large number of rulings have, been attend to us, bat in the view which I have taken of this document I do not deem it necessary to discuss those rulings. The case most near to the present is the case of Ranjit Khan v. Ramdhan Singh 2 Ind. Cas. 859 : 31 A. 482 : 6 A.L.J. 654. In that case the learned Judges did not clearly decide whether the subsequent document created a further mortgage or a further charge, but they held that in any view the earlier mortgage could not be redeemed unless the amount of the second document was paid. There are no doubt other cases in which, under circumstances almost similar to those of the present case a contrary view was held, but holding the view that I do, as stated above, I think it unnecessary to refer to those rulings. Dr. Agarwala laid great stress upon the fact that if a suit for redemption had been brought, the question would have been whether the mortgage of 1880 could be redeemed without payment of the amount of the subsequent document, especially in view of the fact that Chani Ram, one of the original mortgagors, was no party to the subsequent document. In support of his contention he has referred to the case of Muhammad Hussain v. Sheodarshan Das 4 A.L.J. 176 : A.W.N. (1907) 71. That case no doubt supports his contention to a great extent, but it must be borne in mind that the present suit is not a suit for redemption of the prior mortgage. The question is whether the present plaintiff, the mortgagee, is entitled to remain in possession of the property until the amount secured by the two documents has been paid to him. In the opinion which I have expressed, he is so entitled. The second document, so far as the share of Jhamman is concerned, being a mortgage created by him on the same property, and as this mortgageis in substance an addition to the amount of the prior usufructuary mortgage the mortgage could not be dispossessed until the whole of the two sums secured by the two documents had been paid up. The case 'of,' Hari Mahadaji Savarkar v. Balambhat Raghunath Khare 9 B. 233 : 5 Ind. Dec. (N.S.) 155, was referred to The sub sequent document in that case may be deemed to be a simple mortgage and under the terms of that document the Covenant was but that document should be discharged at some time prior to the discharge of the earlier mortgage under which the mortgagee was in possession. of the learned Judges intended to hold that the subsequent document was not a mortgage on the property comprised in the earlier document, I feel myself unable, with great respect, to agree with that view. The case of Ram Narain Lal v. Lala Murlidhar 58 Ind. Cas. 129 : 5 P.L.J. 644 : 1 P.L.T. 916 was also cited. The fasts and circumstances of that case were different and it is not necessary to say whether I agree with the decision in that case or not.

3. The next contention on behalf of the respondents was that under the document of the 28th of June 1881 the creditor could sue to recover his money, and that, therefore, his claim upon that document is time barred and cannot at present be enforced. I do not agree with this contention. That document does not confer on the creditor the right to sue for his money at any titna. If the document is, as I hold it to be, an additional usufractuary mortgage, the mortgagee could not sue for his money and, therefore, no question of limitation can arias. The last contention on behalf of the respondents is that Ram Chander must be deemed to be a tenant, and, therefore, the suit could not be brought in the Civil Court for recovery of possession by his ejectment. In the first place I may mention that this plea was not put forward either in the Courts below or in this Court when the case was before the learned Judge who decided it. In the next place, the suit does not relate to agricultural land and it is not asserted that the defendant Ram Chander is a tenant of agricultural land. The property in dispute is Zemindari property and the suit is one for recovery of such proparty. Therefore, no question of tenancy can arise in this case. In the above view the result will be that the plaintiff would be entitled to recover possession of half of the property claimed by him. There is a further claim for mesne profits, bat Dr. Sen who appears on behalf of the appellant does hot press this part of the claim. I would therefore, make a decree in the plaintiff's favour for half of the property claimed by him and to this extent reverse the decree of the learned Judge of this Court.

Stuart, J.

4. The document of the 28th of June 1881 commences by a reference to the previous deed of mortgage and continues that the executants has borrowed Rs. 50 from Har Pershad. It states that when the previous mortgage is redeemed, that amount will be re-paid with interest at 24 per dent, and that without payment of the amount due the mortgaged property is not to be redeemed. The executants concludes by describing the document as "mashrut-ul-rahn." I had previously some doubts as to whether such a document was a mortgage within the meaning of Section 58 of Act IV of 1882; but I have now arrived at the conclusion that it is a mortgage. It is true that there is no explicit transfer of an interest in specific immoveable property, but taking the document as a whole, and in particular looking at the clause postponing redemption until the money is paid, it must, I think, be considered that the executants agrees that the mortgaged property shall remain in possession of Har Pershad until the additional amount secured by the deed, with interest, is re-paid. The document can thus only be read as an additions he previous document. The executant, who is the mortgagor under the previous deed, has taken a further advance, the property remains in possession of the mortgagee, and in addition to receiving the usufruct of the property the mortgagee is entitled to receive interest at 24 per cent, on the new loan. While agreeing that it is idle to endeavour the lay down that the interpretation of one document is to be according to the interpretation of anther, I think it necessary to note, that the present document is to a very typical, "mashrut-ul-rahn" as executed in the western districts. It maybe stated generally that an omission explicitly to transfer as interest in specific immoveable property does not necessarily show that the deed in which that omission is made is not a mortgage, for there may be an implied transfer of an interest which is equally efficacious. Subject to these remarks I am in complete accord with the judgment of my learned senior brother and would arrive at the same order.

Wallace, J.

5. I agree with the judgment of Mr. Justice Banerji,

6. By The Court.--The order of the Court is that the appeal is allowed in part, the decree of this Court is modified and a decree is made in the plaintiff's favour for possession of half of the property claimed by him. The remainder of the claim is dismissed. The parties will pay and receive costs in all Courts in proportion to failure and success. Costs in this Court will include fees on the higher seals.