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PETITIONER: NAMDEV SHRIPATI NALE

       Vs.

RESPONDENT: BAPU GANAPATI JAGTAP & ANR.

DATE OF JUDGMENT:       11/03/1997

BENCH: B.P. JEEVAN REDDY, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Paripooran. J.      The plaintiff  in Civil  Suit No.  40 of  1970 -- Civil Judge, Junior  Division, Vaduj, is the appellant herein. His father one  Shripati executed  a possessory  mortgage of the suit property,  R.S. No.  244/23 situate  at  Lalgun  Taluka Khatav, Distt. Satara, by Exhibit 35A dated 3.4.1947 for Rs. 1,200/- in  favour of the first respondent, (1st defendant), Bapu Ganapati  Jagtap. Pending this appeal, first respondent died on  1.6.1985. His  three sons  Nivruti Bapusaheb Katkar (Jagtap), Dnyandev  Bapusaheb Katkar  (Jagtap) and  Sahelrao Bapusaheb Katkar  (Jagtap) have  been impleaded as his legal representative. The  second respondent  Laxmi Devi  Shripati Nale is  the appellant’ mother. Exhibit 35A mortgage was for a period  of 12  years. The mortgages was to take the income of  the  property  and  appropriate  the  same  towards  the interest due  etc. Appellant’s  father  died  in  1953.  The appellant was  a minor  then.  The  mortgage  could  not  be redeemed within  the period  fixed. After  the expiry of the said period,  the appellant  caused  a  notice  to  be  sent agreeing to repay the mortgage amount Rs. 1,200/- and sought redemption. The  first respondent  declined to accede to the request. So,  the  suit  was  laid  for  redemption  of  the mortgage, Exhibit  35A. The  first respondent  pleaded  that transaction  Exhibit   35A  was   really  a   sale.  In  the alternative, he  pleaded that the plaint item is an inam and it was  abolished by  the Bombay Pargana and Kulkarni Watans (Abolition)  Act,   1950  (Maharashtra   Act  60   of  1950) (hereinafter referred  to as  the Act). The land was resumed by the  Government and was regranted to the first respondent (Ext. 26).  So, the  appellant has  no subsisting  right  to redeem. The  first respondent  also pleaded  that in case of redemption he should be paid compensation. 2.   The trial  court, by  order dated  8.12.1971, dismissed the suit.  In appeal  the District  Judge, Satara,  in Civil Appeal No. 29 of 1972, by order dated 30.1.1974, decreed the suit and  passed a  preleminary decree  for  redemption  and recovery of possession of the property. In second appeal No. 514 of  1974 by  order dated  19.11.1979, a  learned  single Judge of  the High Court of Bombay restored the judgment and

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decree  of  the  trial  court.  That  has  resulted  in  the appellant’s coming in appeal before this Court. 3.   The trial court, the lower appellate court and the High Court have found that the Exhibit 35A is a deeds of mortgage and not  a sale.  The trial  court found that as per the Act the land  vested in  the Government and was regranted to the first respondent  was only  a trustee  and Section 90 of the Indian Trust  Act, 1882  was  attracted,  was  repelled.  In appeal the,  District Judge  held that the first respondent- mortgagee failed to remit the occupancy price as enjoined on him, and  by putting  forward the plea that he is tenant, he obtained the regrant and thus gained an advantage; it should enure for  the benefit of the mortgagor and so, the right to redeem still  vested in  the appellant.  It is  a case where section 90 of the Indian Trust Act was clearly attracted. In second appeal,  the learned  single Judge  of the High Court took the  view that  (1) due to non-payment of the occupancy price by the plaintiff within the period of five years(on or before 25.1.1956) the suit property vested in the Government and this  was not  challenged; (2)  the first respondent was taken to  be a  tenant and  the land  was regranted  to him, (Ext. 26);  and  (3)  it  cannot  be  said  that  the  first respondent gained  and advantage by availing his position as mortgagee in getting the regrant. In the above premises, the suit for redemption was dismissed. 4.   We heard  counsel.  Counsel  for  the  appellant  urged before us  that the  first respondent-mortgagee was bound to pay the  occupancy price  and by failing to do so he brought about the situation, enabling him to obtain a regrant of the property in his name by posing himself as a tenant; in other words, first  respondent committed  a default or a wrong and by taking  advantage of  his position,  as one possession of the property,  obtained  a  benefit  or  advantage,  He  has committed a  wrongful act,  in not  remitting the  occupancy price as  contemplated  by  law.  The  resultant  advantage, obtained  thereby   should  enure  to  the  benefit  of  the appellant or, in other words, the resultant advantage should be deemed  to have  been obtained  for the  benefit  of  the appellant. So, the suit for redemption should be decreed. On the other  hand, counsel  for the respondents contended that in view  of the  failure  of  the  mortgagor  to  remit  the occupancy price  within the  time limited  by law,  the land vested  in  the  Government;  it  cannot  be  said  that  he committed any  default and  obtained any  undue advantage in the subsequent  regrant made  in his  favour. The ******* of Section 90 of the Indian Trust Act are not attracted. 5.   The following  statutory  provisions  are  relevant  to adjudicate the controversy in this case. They  are:-      (I)  Section 2(1)(b),  3 and  4  of      the  Bombay  Pargana  and  Kulkarni      Watans   (Abolition)    Act,   1950      (Maharastra Act 60 of 1950):-      2.   Definitions -  (1) In this Act      unless there  is anything repugnant      in the subject or context, --      (a)..........      (b) "code" means the Bombay Land      Revenue Code, 1879:"      "3.  Abolition  of  certain  watans      together with  the right  to office      and incidents.  -- With effect from      and   on    the   appointed    day,      notwithstanding anything  contained      in  any   law,  usage,  settlement,      grant, sanad or order --

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    (1)  all  Paraganas   and  Kulkarni      watans shall be deemed to have been      abolished;      (2)  all rights  to hold office and      any  liability  to  render  service      appertaining to the said watans are      hereby extinguished;      (3)  subject to  the provisions  of      section 4, all watan land is hereby      resumed and  shall be  deemed to be      subject  to  the  payment  of  land      revenue under the provisions of the      Code and  the rules made thereunder      if it were an unalienated land;      Provided that such resumption shall      not  affect  the  validity  of  any      alienation such  watan land made in      accordance with  the provisions  of      section 5  of the  Watan Act or the      rights of an alienee thereof or any      person claiming  under  or  through      him;      (4)  all incidents  appertaining to      the   said    watans   are   hereby      extinguished."      "4.  Holder of  watan  land  to  be      occupant.  --   (1)  A  watan  land      resumed  under  the  provisions  of      this  Act   shall  subject  to  the      provisions  of   section  4-A,   be      regranted  to  the  holder  of  the      watan to which it appertained price      equal to  twelve time of the amount      of the full assessment of such land      within five  year from  the date of      the coming  into force  of this Act      and the  holder shall  be deemed to      be an  occupant within  the meaning      of the Code in respect of such land      and shall  primarily be  liable  to      pay  land   revenue  to  the  State      Government in  accordance with  the      provisions  of  the  Code  and  the      rules  made   thereunder;  all  the      provisions of  the Code  and  rules      relating to unalienated land shall,      subject to  the provision  of  this      Act, apply to the said land:           Provided that  in  respect  of      the watan  land which  has not been      assigned towards  the emoluments of      the  officiator,   occupancy  price      equal to six times of the amount of      the full  assessment of  such  land      shall be  paid by the holder of the      land for its regrant:           Provided further  that if  the      holder fails to pay the occupancy      price within  the  period  of  five      years as  provided in this section,      he   shall    be   deemed   to   be      unauthorisedly occupying  the  land      and shall be liable to be summarily      ejected  in   accordance  with  the      provisions of the Code.

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    (2)  The  occupancy   of  the  land      regranted  under   sub-section  (1)      shall  not   be   transferable   or      partible  by   metes   and   bounds      without the  previous  sanction  of      the Collector and except on payment      of  such   amount  as   the   State      Government  may   be   general   or      special order determine.      (3)  Nothing in sub-section (1) and      (2)  shall apply to any land --      (a)  the commutation  settlement in      respect of which provides expressly      that the  land appertaining  to the      watan shall  be  alienable  without      the   sanction    of   the    State      Government; or      (b)  which   has    been    validly      alienated with  the sanction of the      State Government under section 5 of      the Watan Act.      Explanation --  For the purposes of      this   section    the    expression      "holder" shall include --      (i)  all   persons   who   on   the      appointed day  are the watandars of      the same  watan to  which the  land      appertained, and      (ii) in the  case of  a  watan  the      commutation settlement  in  respect      of which  permits the  transfer  of      the land  appertaining  thereto,  a      person in  whom  the  ownership  of      such  land   for  the   time  being      vests."           (emphasis supplied)      (II) Sections 65(c)  and  76(c)  of      the Transfer of Property Act are to      the following effect :-      "65. In  the absence  of a contract      to  the   contrary,  the  mortgagor      shall be  deemed to  contract  with      the mortgagee--      (c)  that the  mortgagor  will,  so      long as  the mortgagee  is  not  in      possession   of    the    mortgaged      property, pay  all  public  charges      accruing  due  in  respect  of  the      property;      "76. When, during  the  continuance      of  the   mortgage,  the  mortgagee      takes possession  of the  mortgaged      property,--      (c)  he must,  in the  absence of a      contract to  the contrary,  out  of      the income  of  the  property,  pay      Government   revenue,   all   other      charges of  a public nature and all      rent  accruing   due   in   respect      thereof during  such possession and      any arrears  of rent  in default of      payment of  which the  property may      be summarily sold."           (emphasis supplied)      (III) Section 90 of the Indian

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    Trust Act, 1882 :-      "90. Advantage gained  by qualified      owner.-- Where  a tenant  for life,      co-owner,   mortgagee    or   other      qualified owner of any property, by      availing himself of his position as      such,   gains   an   advantage   in      derogation of  the  rights  of  the      other  persons  interested  in  the      property, or  where any such owner,      interested in  such property, gains      any advantage,  he must  hold,  for      the  benefit   of  all  persons  so      interested,   the    advantage   so      gained, but subject to repayment by      such persons  of their due share of      the expenses properly incurred, and      to  and   indemnity  by   the  same      persons     against     liabilities      properly contracted in gaining such      advantage."           (Emphasis supplied)      6.   The   relevant   portions   of      Exhibit 35A, deed of mortgage dated      3.4.1947 are as follows :-      "For repaying  the  loan  mentioned      above and  for the  house  expenses      (the amount mentioned above) I give      my land  (as  mentioned  below)  as      Mudat Kharadi.  I  have  given  the      land in  your  possession  for  the      period 12 years to-day. So till the      period of  sale you  should pay the      assessment and  cultivate the  land      and should  take the  income of the      land. At  the expiry of the term of      the deed,  (I) will  pay the Rupaya      and will  take  back  the  land  by      ("Sadavun") redeeming  the same. If      the amount  will not be paid within      the  time   then  this   should  be      treated as  permanent sale  and you      should enjoy the suit land absolute      for yourself  and  by  your  heirs.      Hence neither  myself nor  my heirs      shall have  any right  of claim  in      respect of  suit property. You will      be   full   owner   of   the   suit      property."           (emphasis supplied)      The document is a possessory mortgage. The mortgagee is permitted to  appropriate the  income of  the  land.(towards interest due).  It  is  stated  that  the  income  from  the interest due).  It  is  stated  that  the  income  from  the property will  be Rs.  500-600 per  annum.  Admittedly,  the property is an inam land. By Maharashtra Act 60 of 1950, the land was  resumed by  the Government  (Ext. 26). There was a provision to regrant it to the holder of the land on payment of the  occupancy price  equal to  12 times of the amount of the amount  of the  full assessment of such land within five years from the date of coming into force of the Act. The Act came into  force on 25.1.1951. So the occupancy price should be paid  on or  before 25.1.1956.  The mortgagor did not pay the occupancy price till then. The lower appellate court has found that  the first respondent was taken to be a tenant of

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the land.  He paid  the occupancy  price (on  his  own)  and obtained the regrant from the Government. We are of the view that the  occupancy price payable under Section 4 of the Act to obtain  a regrant,  will be covered by the expression all public charges  accruing due in respect of the property, all other charges of public nature as specified in Section 65(c) and 76(c)  of the  Transfer of Property Act respectively. In the absence  of a  contract  to  the  contrary,  during  the pendency  of   the  mortgage,   when  the  mortgagee  is  in possession of the mortgaged property, he was bound to pay or remit the occupancy price under Section 4 of the Act for and on behalf  of the  mortgagor, so as to prevent the happening of  the   consequence  stated  in  the  proviso.  The  first respondent-mortgagee  failed   to   comply   the   aforesaid statutory obligation.  He committed  a wrong  or a  default. Whether the  default/wrong committed  has  as  its  basis  a contractual obligation  or a  statutory obligation, makes no difference. He was taken, to be a tenant by the authorities, which enabled him to get the regrant in his favour. That was only  because   the  first   respondent,  as   a  possessory mortgagee, was  in  possession  of  the  property.  He  took advantage of  his position  as a possessory mortgagee. In so doing he  faulted. So,  on facts, it is clear that the first respondent obtained  regrant in  his favour  or obtained  an advantage in his favour, by availing himself of his position as a  mortgagee. In law, the advantage obtained by the first respondent, the  qualified owner, must be held to be for the benefit  of   the  person  interested  --  the  mortgagor  - appellant. We  are of  the view  that in the totality of the facts and  circumstances the provisions of Section 90 of the Indian  Trust  Act  are  attracted.  The  first  respondent- mortgagee gained  an advantage  by availing  himself of  his position as a possessory mortgagee and obtained the regrant. This he did by committing a wrong. He committed a default in not paying  the occupancy  price within  the time limited by law for  and on  behalf of  the mortgagor.  The regrant  was obtained in  his name  by posing  himself as a tenant, which was possible  only because  he was in possession of the land (as a possessory mortgagee). The  advantage so gained by him in derogation  of the  right of the mortgagor should attract the penal  consequences of  Section 90  of the  Indian Trust Act. We  hold that  the default  committed by  a  possessory mortgagee, in the performance of a statutory obligation or a contractual obligation,  which entails  a sale or forfeiture of right in the property, to the mortgagor, will attract the provisions of  Section 90  of the  Indian Trust Act. In such cases any  benefit obtained  by  the  qualified  owner,  the mortgagee,  will   enure  to  or  for  the  benefit  of  the mortgagor. The  right to redeem will subsist notwithstanding any sale or forfeiture of the right of the mortgagor. We are of the  view that  the law  on this point has been laid down with admirable  clarity by  this Court in Mritunjoy Pani and anr. vs.  Narmanda Bala  Sasmal and  anr. (1962 (1) SCR 290) and by  K.K. Mathew,  J. (as his lordship then was) in Nabia Yathu Ummal vs. Muhammed Mytheen & ors. (1963 KLJ 1177). The said decisions have our respectful concurrence. 7.   We, therefore,  set aside  the judgment  of the learned single Judge  of the  Bombay High  Court rendered in S.A.No. 514 of  1974 dated  19.11.1979 and  restore the judgment and decree of the District Judge, Satara, rendered in C.A. No.29 of 1972  dated 30.1.1974.  The appeal  is allowed with costs throughout. The  payment  ordered  by  the  District  Judge, Satara, in  his judgement  dated 30.1.1974  inclusive of the amount remitted  by the  1st respondent  for  obtaining  the occupancy right,  shall be  remitted within  six months from

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today and  thereupon the  appellant shall  recover from  the respondents possession of the suit property.