Bhika v. Sheikh Amir

1. This appeal arises out of a suit for redemption of what plaintiffs call a usufructuary mortgage dated the 2nd October 1880. The material portion of the deed may be translated as follows:—

“Mortgage deed executed in favour of Hasan Battu of Pokharni by Kanhaiya Sad, disciple of Zapu Sad Rajput of Pokharni now at Sohapur, to the following effect: Rs. 400 is due on account of an old mortgage bond. I mortgage in lieu thereof malik makbuza land No. 72, area 16 acres 3 roods cultivated and uncultivated, with 30 mango trees and a well at mauza Pokharani Paragana Harada, and stipulate as follows: In lieu of the amount you should cultivate the land up to the crops of the 15th year from the current year, that is Sambat 1937 (1880-1881 A.D) to Sambat 1952 (1895-1896) and pay rent directly to the Zamindar from the profits of the land. You should recover your amount from the remaining profits of the land. No amount shall be due by me to you after the stipulated period of fifteen years. The land shall be in your possession without any interruption after the stipulated period of fifteen years (ending with) Sambat 1952. After the stipulated period of fifteen years you may cultivate the said land yourself or get it cultivated and may take the income of the trees. I will take from you Rs. 40 a year in two kists on account of the land and the mango trees. I will be liable to the Zamindar. Now the land shall continue in your possession and in that of your heirs in accordance with this very stipulation. Neither myself nor my heirs can remove the land from your possession.

2. The learned Munsif found, without giving any reasons, that this document was a mortgage deed and not a deed of lease.

3. The learned District Judge found that the deed was a deed of lease and not a deed of mortgage. The following are the reasons which he gave:—

“7. I think that the document in suit must be held to be a leaser and not a usufructuary mortgage, inasmuch as on the execution of the said document, the debt was wiped out and there was no appropriating of the receipts from the land to gradually pay off the debt. The document cannot therefore be held to be a usufructuary mortgage under section 58 of the Transfer of Property Act.

8. 11 Nag. 181 can be distinguished on the ground that in that case the debt was still subsisting after the execution of the document, and was to be paid off before the condition of perpetual tenancy came into operation.

10. 26 Bom. 253 has been considered in 6 Nag. 65, wherein it has been held that a document may amount to a lease, even though the consideration consists of an advance made before the date of execution.

12. As I have held the document to be a lease, it follows that no suit for redemption can lie.”

4. The learned District Judge stated that as the document is a lease, it followed that no suit for redemption lies, and he dismissed the suit.

5. In appeal it is urged that the deed is a mortgage and not a lease and that the covenant in the deed that the mortgagee and his heirs were to remain in possession after the mortgage period as perpetual lessees was a clog on the equity of redemption and that therefore was not a bar to a suit for redemption. In support of the contention that the deed is a deed of mortgage, reliance is placed on my ruling in Daolat Rai v. Sheik Chand (1915) 11 N.L.R 180 , 31 I.C 869, but the deed in that case was clearly a mortgage as it contained a provision under which power was given to the executant of the deed to pay off the amount which was the consideration for the deed. There is no such stipulation in the present case, and it is difficult to distinguish the terms of the present deed from those of the deed referred to in Nidha Sah v. Murlidhar (1903) 25 All. 115 , 30 I.A 54 , 8 Sar. 435 , 5 Bom. L.R 111 , 7 C.W.N 289 (P.C), where it was held that an ostensible mortgage in consideration of a sum made up partly of past advances was not a mortgage but a grant of land for a fixed term free of rent. In Beniprasad v. Mulchand(3) it was held that a document may amount to a lease even though the consideration consists of an advance made before the date of execution. In this case no accounts were to be rendered or required. I am therefore of opinion that the first part of the deed was a lease and not a mortgage.

6. But even if the deed were held to be a mortgage, I am of opinion that the plaintiffs could not succeed in this case. It has been observed by Sargent, C.J, in Subrao v. Manjapa (1892) 16 Bom. 705. “The general rule as to agreements of this nature between mortgagor and mortgagee is stated very broadly by Lord Rodesdale in Hickes v. Coake (1816) 4 Dow., 17 at page 28, S.S 10 R.R, 6 in the following terms:— ‘No agreement between mortgagor and mortgagee for a beneficial interest out of the mortgaged premises (such as a lease) where the mortgage continues, ought to stand, if impeached within reasonable time, from the great advantage which the mortgagee has over the other party in such a transaction.” Relief against an agreement forming a clog upon the equity of redemption can only be obtained if such agreement is impeached within reasonable time. It is an equitable relief which should not be granted as a matter of course. It cannot be said that in this case the agreement for a perpetual lease was impeached within reasonable time, for the deed was executed in 1880 and this suit was brought in 1920.

7. There is another reason why the plaintiffs' suit should fail. The mortgage, if it is a mortgage is for a fixed term and without any provision for accounting. It is not, strictly speaking, a usufructuary mortgage which is one in which possession is given until payment of the mortgage money, but is of the nature of an anomalous mortgage: such a mortgage automatically redeems itself at the end of the fixed period and the parties have as a matter of fact treated the mortgage as having been redeemed in 1895. The plaintiffs have admitted the correctness of the accounts furnished by the defendants according to which the mortgage was treated as subsisting up to the year 1895, whereas from 1896 to 1919 the defendants have been paying a rent of Rs. 40 a year to the plaintiffs. The plaintiffs' predecessors have therefore treated the mortgage as having been satisfied in 1895 and have been accepting rent under the permanent lease from the defendants for 24 years. It is therefore out of question for the plaintiffs to come forward now and say that the mortgage is still subsisting and to ask that the lease which they have been recognising for 24 years should be treated as a clog on the equity of redemption.

8. The appeal is dismissed with costs.