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PETITIONER: SACHDANAND PRASAD

       Vs.

RESPONDENT: BABU SHEO PRASAD SINGH

DATE OF JUDGMENT: 06/05/1965

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SUBBARAO, K. DAYAL, RAGHUBAR

CITATION:  1966 AIR  126            1966 SCR  (1) 158

ACT: Indian Trusts  Act, 1882 (Act 2 of 1882), s. 90 illustration (c)-Default  lo Pay entire rent by mortgagor and a  trifling part  of  rent by mortgagee-Rent decree  and  sale-Mortgagee purchases the land-1f mortgagor entitled to redeem.

HEADNOTE: The   ancestors  of  the  appellants  created   usufructuary mortgages  in  favour  of  the  respondent.   The  mortgaged property  was  a part of a larger holding.   The  mortgagee- respondent  had agreed to pay a portion of the rent  of  the entire holding and the mortgagors agreed to pay The  balance rent payable in respect of it.  The mortgagors defaulted for several  years in payment of the rent.  The  mortgagee  paid almost  the entire amount of the rent but defaulted  in  the payment  of a trifling sum.  The landlord obtained a  decree for  arrears of rent, and at rent sales the  mortgagee  pur- chased  the lands.  The appellant-s-mortgagors filed a  suit for  redemption  of the mortgage, which was decreed  by  the trial  court.  The mortgagee appealed, which was allowed  in part passing a decree for redemption of a small plot only on the  ground  that this portion of land was not sold  at  the rent  sale.   The mortgagors’ appeal to the High  Court  was dismissed.   In  appeal  by special  leave,  the  mortgagors contended  that  the  purchases at the  rent  sale  and  the certificate  sale  were made by the  mortgagee  by  availing himself of his position as such as having regard to s. 90 of the  Indian  Trusts  Act and Illustration  (c)  to  it.  the purchases  enured for the benefit of the mortgaors and  they were entitled to redeem the entire mortgaged lands. HELD : The portion of the rent which the mortgagee failed to pay  was  so small that it was impossible to  say  that  the property was brought to sale for it or that his default  was in  any real sense a contributory cause of the site  of  the property.  It was not shown that non-payment of the  titling sum by the mortgagee was made mala fide or with the ulterior object  of  the  property  being put up  for  sale  and  his becoming  the purchaser of it.  The mortgagee did  not  gain any advantage by availing himself of his position as such or of  a  situation  brought about by his  default.   The  real effective  cause  of  the  sale  was  the  default  of   the

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mortgagor& alone.  L161 E-G] In  the  circumstances, s. 90 of the Indian Trusts  Act  and Illustration (c) to it were not attracted, and the  purchase by  the  mortgagee  did not enure for  the  benefit  of  the mortgagors.    The  rent  sale  and  the  certificate   sale extinguished the right of redemption. [161 G-H] Basmat  Devi v. Chamru Sao, A.I.R. 1964 S.C. 1707,  referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 180 of 1963. Appeal  by special leave from the judgment and decree  dated February  19,  1958 of the Patna High Court in  Appeal  from Appellate Decree No. 919 of 1954. Sarjoo Prasad and B. P. tha, for the appellants, 159 A.   V.  Viswanatha Sastri, B. K. P. Sinha and A. G.  Ratna- parkhi, for the respondent. The Judgment of the Court was delivered by Bachawat, J. The plaintiffs-appellants instituted Title Suit No.  91  of  1950,  out of which  this  appeal  arises,  for redemption   of  two  usufructuary  mortgages   created   by plaintiff  No.  1 and ancestors of plaintiffs Nos.  2  to  6 dated  July  5,  1927 and April 15, 1928 in  favour  of  the defendant  for  Rs. 1,000 and Rs. 1,300  respectively.   The mortgage dated July 5, 1927 was in respect of 7.20 acres  of occupancy raiyati lands, consisting of four plots Nos.  149, 155, 955 and 957, in village Hichapur under the Tikari  Raj. The  mortgaged lands were part of a larger holding of  23.69 acres under khata No. 59, and the annual rent of the  entire holding  was Rs. 153-3-0.  The mortgage deed  provided  that the  mortgagee would pay Rs. 33-14-9 out of the  total  rent payable  to  the landlord and the mortgagors would  pay  the balance  rent.   There was default in payment  of  rent  for several years.  The landlord obtained a, decree for  arrears of  rent,  and at the rent sale held on June 18,  1934,  the mortgagee-defendant  purchased  the Hichapur  lands  in  the farzi name of Dwarkalal. The  mortgage  dated April 15, 1928 was in respect  of  7.20 acres  of lands in village Utrain tinder kahas  mahal.   The mortgaged  lands were part of a larger holding of  1988  1/2 acres in khata No. 269.  The, rent of the entire holding was Rs. 155-4-0.  The mortgage deed provided that the  mortgagee would pay Rs. 68-10-9 out of the total rent and the  balance rent would be payable by the mortgagors.  There was  default in   payment  of  rent  for  several   years.    Certificate proceedings were started for the recovery of the arrears  of rent,  and at a certificate sale held on January  22,  1934, the  Utrain  lands were purchased by the  defendant  in  the farzi name of Deonarain. It  appears that out of the sum of Rs. 33-14-9 pay  able  by the  mortgagee  annually  on  account of  the  rent  of  the Hichapur  lands,  the  mortgagee consistently  paid  Rs.  33 annually,  but  did not pay the balance sum of  14  annas  9 pies,  whereas  the  mortgagors  consistently  defaulted  in payment  of the sum of Rs. 119-4-3 payable by them  annually on  account of the total rent.  It also appears that out  of the sum of Rs. 68-10-9 payable by the mortgagee annually on- account  of  the  rent of the Utrain  lands,  the  mortgagee consistently  paid  Rs.  68 annually but  did  not  pay  the balance  sum  of  10 annas 9 pies,  whereas  the  mortgagors consistently defaulted 160

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in payment of the sum of Rs. 86-9-3 payable by them annually on account of the total rent. The trial Court decreed the suit.  The first appellate Court allowed  the appeal in part, passed a decree for  redemption of  3.93 acres of plot No. 955 only on the ground that  this portion  of the land was not sold at the rent sale and  gave leave  to the defendant to withdraw Rs. 1,000  deposited  by the plaintiff in respect of the mortgage dated July 5, 1927. The  High Court dismissed a second appeal preferred  by  the plaintiffs.   The  plaintiffs now appeal to  this  Court  by special leave. The  plaintiffs contend that the purchases at the rent  sale and  the  certificate  sale were made by  the  mortgagee  by availing  himself of his position as such and having  regard to  s. 90 of the Indian Trusts Act and Illustration  (c)  to it,  the purchases enured for the benefit of the  plaintiffs and they are entitled to redeem the entire mortgaged  lands. The defendant-mortgagee disputes this contention, and claims that   the  aforesaid  sales  extinguished  the  equity   of redemption. Section 90 of the Indian Trusts Act and Illustration (c)  to it are as follows :               "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,   as               representing  all persons 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  an               indemnity   by   the  same   persons   against               liabilities  properly contracted,  in  gaining               such advantage.               (c)   A  mortgages land to B, who enters  into               possession.   B allows the Government  revenue               to  fall into arrears with a view to the  land               being put up for sale and his becoming himself               the purchaser of it.  The land is  accordingly               sold  to  B. Subject to the repayment  of  the                             amount due on the mortgage and of his  expenses               properly  incurred as mortgagee, B  holds  the               land for the benefit of A."               161 In Basmat Devi v. Chamru Sao(1), a part of one entire  hold- ing was mortgaged, both the mortgagor and the mortgagee were liable  to  pay  the  rent of  the  holding,  both  of  them defaulted  in  payment  of the rent,  the  default  of  both contributed to the passing of a rent decree and the sale  of the holding in execution of, the decree, the default of  the mortgagee being substantial, and the mortgagee purchased the holding  at the execution sale.  On these facts, this  Court held  that  the  mortgagee clearly gained  an  advantage  by availing himself of his position as such, and having  regard to  s. 90 of the Indian Trusts Act his purchase  must  inure for  the  benefit of the mortgagor, and  the  mortgagor  was entitled  to redeem the mortcaged property.  In  that  case, Das Gupta, J. observed               "Whether  this  would be true even  where  the               portion  which the mortgagee is liable to  pay               is  so  very small that the  property  is  not

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             ordinarily  likely to be brought to  sale  for               that  amount,  it  is unnecessary  for  us  to               decide in the present case." The question left open by Das Gupta, J. arises for  decision in  the  present case.  This is a case where  the  mortgaged property  is part of a larger holding, the mortgagee  agreed to pay a portion of the rent of the entire holding, and  the mortgagors agreed to pay the balance rent payable in respect of  it.   The mortgagors defaulted in payment  of  the  rent payable  by  them.   The mortgagee paid  almost  the  entire amount  of the rent payable by him but defaulted in  payment of  a  trifling  sum.  The portion of  the  rent  which  the mortgagee failed to pay is so small that it is impossible to say that the property was brought to sale for it or that his default  was in any real sense a contributory cause  of  the sale  of the property. it is not shown that  non-payment  of the  trifling  sums by the mortgagee was made mala  fide  or with  the ulterior object of the property being put  up  for sale  and his becoming the purchaser of it.   The  mortgagee did  not  gain  any advantage by  availing  himself  of  his position as such or of a situation brought about by his  own default.   The  real  effective cause of the  sale  was  the default  of the mortgagors alone.  In the circumstances,  s. 90  of the Indian Trusts Act and Illustration (c) to it  are not  attracted, and the purchase by the mortgagee  does  not inure for the benefit of the mortgagors.  The rent sale  and the  certificate sale extinguished the right of  redemption. Consequently,  the suit by the mortgagors for redemption  of the mortgaged property is liable to be dismissed. The  first  appellate  Court, however,  gave  a  decree  for redemption of 3.93 acres of plot No. 955 in Hichapur village and gave (1)  A.I.R. 1964 S.C. 1707. 162 liberty  to the mortgagee to withdraw the entire sum of  Rs. 1,000 deposited by the plaintiffs in respect of the mortgage of the Hichapur lands.  Before the High Court the plaintiffs contended,  relying upon the last paragraph of s. 60 of  the Transfer  of Property Act, 1882, that they were entitled  to redeem  the aforesaid 3.93 acres of Utrain lands on  payment of  the proportionate amount of the mortgage  money  payable under  the  mortgage  dated July 5, 1927.   The  High  Court negatived  this contention.  The Courts below observed  that 3.93  acres of plot No. 955 of the Hichapur lands  were  not sold  at  all at the sale held on June 18, 1934,  but  quite inconsistently,  the  Courts below also  observed  that  the aforesaid sale held on June 18, 1934 was a rent sale and was made  in  execution of a rent decree.   Learned  counsel  on behalf  of both parties conceded before us that there  could be no rent sale in respect of a portion of the holding.   It may be that there was a rent sale, and by mistake, the  sale certificate  omitted to mention the 3.93 acres of  plot  No. 955.   The relevant documents are not printed in  the  paper book.   Having regard to the value of the subject-matter  in dispute, it is not worthwhile to call for a fresh finding on this  point.   We, therefore, indicated to counsel  on  both sides  in course of the argument that we shall  decide  this appeal  on the footing that the sale held on June  18,  1934 was  a rent sale and the entire Utrain lands were  purchased by the defendant at the rent sale.  On this footing the last paragraph of s. 60 of the Transfer of Property Act, 1882 can have  no application.  The plaintiffs-appellants do not  now own the equity of redemption in any portion of the  Hichapur lands.   The Courts below, therefore, should have  dismissed the  entire  suit  for  redemption,  and  the  question   of

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redemption  of  a portion of the property on  payment  of  a proportionate amount of the mortgage money does not properly arise in this case.  However, the first appellate Court gave a decree for redemption of the aforesaid 3.93 acres of land. The High Court affirmed this decree, and there is no  cross- appeal  by the defendant-respondent.  In the  circumstances, the decree passed by the Court below must be maintained. In the result, the appeal is dismissed with costs. Appeal dismissed. 163