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PETITIONER: THAKUR SINGH

       Vs.

RESPONDENT: RAM BARAN SINGH & ORS.

DATE OF JUDGMENT25/08/1972

BENCH: RAY, A.N. BENCH: RAY, A.N. DUA, I.D.

CITATION:  1973 AIR   45            1973 SCR  (1)1016  1972 SCC  (2) 740

ACT: Transfer  of  Property Act (4 of 1882), ss. 76, 77  and  83- Mortgage  providing  for payment of government  revenue  and Cess  by mortgagor-Mortgagee in possession paying the  same- Deposit  of  mortgage money by mortgagor-If  should  include payment by mortgagee-Mortgagee’s liability to account.

HEADNOTE: The  appellant-mortgagor  tendered  to  the  mortgagees  the mortgage money due on their mortgages and, on the refusal of the mortgagees to accept the amount, deposited the  mortgage money into court.  The appellant thereafter filed suits  for redemption  and  mesne profits.. The terms of  the  mortgage deeds  indicated  that,  (i) the mortgagee  shall  have  the possession and occupation of the mortgaged property and  the right to appropriate the produce thereof in lieu of interest on  the mortgage money and that the mortgagor shall have  no claim  to  any  excess produce or mesne  profits;  (ii)  the mortgagee  was to pay to the mortgagor the amount  mentioned in each mortgage bond as annual reserve rent; and (iii)  the mortgagor  was liable for the payment of government  revenue or cess.  The mortgagees, however, paid the revenue and cess on behalf of the mortgagor.  The total amount of revenue and cess  paid by the mortgagees each year exceeded  the  amount due to the mortgagor as reserve rent.  The trial court,  and the High Court in appeal, held that the amounts representing the  government revenue and cess should have been  added  to the mortgage money and deposited in court, and, since it was not  done, there was no valid deposit in court of the  money due  on  the  mortgages, and hence, the  appellant  was  not entitled to mesne profits. Dismissing the appeal to this Court, HELD : (1) Under the provisions of the Cess Act, 1880,  cess is a public demand and linked with rent.  Under the terms of the  mortgage deed the appellant was liable for the  payment of  both  revenue and cess.  Since the mortgagees  paid  the government  revenue or cess on behalf of the  appellant  and the  amount  so  paid exceeded the  amount  payable  by  the mortgagees as reserve rent, the mortgagees were entitled  to the  excess  payment from the appellant and add  it  to  the mortgage money due. [1020E-F-H]

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(2)  There  was  nothing  to  account on  the  part  of  the mortgagees,  because, (a) the mortgagees had to pay  to  the mortgagor  a  fixed  amount as reserve  rent;  and  (b)  the mortgages were covered by s. 77 of the Transfer of  Property Act and therefore the provisions as to accounts in s. 76(g), are excluded. [1020B-D]

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  1038-1040 of 1967. Appeals by certificate under Article 133 of the Constitution of  India from the judgment and decree dated August 7,  1962 of  the  Patna High Court in Original Decrees  Nos.  384/52, 1155 and 2/55. 1017 R. C. Prasad, for the appellant Jagadish  Swarup, K. K. Sinha, S. K. Sinha and B. B.  Sinha, for  respondents  Nos. 1-4 (in C.A. No. 1038 of  1967),  for respondents  1  (a) & 2 (in C.A. No. 1039 of  1967  and  for respondents Nos. 1, 2, 4 & 5 (in C.A. No. 1040 of 1967). The Judgment of the Court was delivered by Ray,  J. These three appeals are by certificate against  the judgment  dated 7 August, 1962 of the High Court  at  Patna. The  High  Court allowed in part the appeals  filed  by  the appellant  by  decreeing  in part the  suits  filed  by  the appellant  for  redemption  of mortgages.   The  High  Court dismissed the appellant’s prayer for mesne profits. The appellant filed three suits for redemption.  Title  Suit No.  54 of 1950 filed by the appellant was with  respect  to Ijara bond dated 21 April, 1920 in favour of Ram Baran Singh for Rs. 2,300/-.  Title Suit No. 55 of 1950 was filed by the appellant with respect to another ljara bond dated 21 April, 1920 in favour of Inder Singh for Rs. 1293-12-0.  The  third Title  Suit No. 56 of 1950 was filed by the  appellant  with respect  to  the third Ijara bond dated 21  April,  1920  in favour  of  Raj Kumar Mahto for Rs. 1,150/-.  The  bond  was subsequently  assigned to one Sheo Sharan Singh  whose  sons were defendants in that suit.  These         bonds      were executed  by  Maik  Nizammuddin.  These  three  bonds   were mortgage  bonds  in  respect of certain  Milkiyat  share  in village        Keoran Mauzume Makhdumpur in the District  of Patna.           The  appellant was the purchaser of  the  Milkiyat share of       Nizammuddin from his heirs by a deed dated 22 May,  1946.  The  appellant alleged as follows.  There,  are baksht lands within the       said Milkiyat share covered by the Ijara bonds. These bakasht          lands    were    the subject  matter  of  the mortgage. After  ’he  purchase  the appellant endered the ljara money to the respondents   who were  ijaradars  or mortgagees. The respondents  refused  to accept  the  money. The appellant  thereupon  deposited  the mortgage  money. The appellant served notice of the  deposit on the         respondents. The respondents did not withdraw the ijara money.    They  did not deliver possession of  the Milkiyat share and the bakasht lands to the appellant.  The appellant  therefore  filed  suits for  redemption  and  for possession. The appellant also claimed       mesne profits.           The  respondents in the written statements  denied that there     was  any  bakasht land. It was also  denied that there was any  mortgage of bakasht land. It was alleged that  the lands were raiyati lands in possession of  several tenants  and  therefore those lands could not  be  redeemed. The further defence was that the

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1018 Ijara  bonds  were  really  sale  deeds  and  therefore  the appellant  had  no  right of redemption in  respect  of  the milkiyat   interest.   The  respondents  denied   that   the appellant tendered the mortgage money. The  trial Court held that the appellant was entitled  to  a decree for redemption but not for mesne profit.  The  reason given was that the appellant did not deposit in court  under Section 83 of the Transfer of Property Act the money due  on mortgage.   The  mortgagees had from time to time  paid  the Government  revenue  and  cess in respect  of  the  mortgage property.  The Government revenue and cess should have  been paid  by  the  mortgagor.   The  amounts  representing   the Government revenue and cess should have been added up in the mortgage  money.  The deposits in court did not cover  those amounts. The appellant preferred appeals to the High Court.  The High Court  upheld  the finding of the trial Court  that  certain lands  were  bakasht lands.  The High Court  set  aside  the finding  of  the trial Court as to other  lands  which  were found by the trial Court not to be bakasht lands.  The  High Court  upheld the finding and conclusion of the trial  Court that  there  was no valid deposit in court of money  due  on mortgage.  The appellant was therefore not entitled to mesne profits.   The High Court found that the amount  of  revenue and cess was never less than the amount of   haq-ajri (meaning  thereby  ’annual reserve rent’)  payable  to.  the mortgagor.  The result was that the amount of  revenue  and cess      paid by the mortgagees was always higher than  the haq-ajri and   therefore there was no case of accounting. Counsel  for the appellant contended that the appellant  was entitled  to  mesne  profits from the dates  of  deposit  of mortgage  money in court under section 83 of the Transfer of Property Act.  The amounts were deposited in court of  First Munsif,  Patna on 26 May, 1947. Notice under section  83  of the  Transfer of Property Act was served on the  respondents on 30 May, 1947 in two   cases  and on 3 June, 1947  in  the third case. The suits were filed for redemption of  mortgage -and mesne profits in the month    of June, 1950.      The relevant terms of the ijara bond (mortgage bond) in      favour of Ram Baran Singh were these :  "It is desired that the said Mustajir, should               enter into      possession  and occupation  of               the  ijara  property,  himself  cultivate  the               land, appropriate the produce thereof in  lieu               of  interest  on  the  peshgi  money.  I,  the               executant, or  my heirs  and  representatives,               neither have nor               1019               shall  have any claim for excess  produce  and               mesne  profits etc. against the said  Mustajir               or  his heirs and representatives,  except  to               get  a  sum of Rs. 12/-  (rupees  *twelve)  in               king’s coins, as annual reserve rent till this               deed  remain  intact.  Expenses  over  dispute               regarding  the milkiyat property and  boundary               limit  and payment of Government  revenue  and               road  cess  and  Public works  cess  etc.  are               entirely  the  concern of me,  the  executant.               The  said Mustajir neither has nor shall  have               any connection and concern therewith". The terms of the other two ijara deeds were identical.   The only  difference was that in the case of the ijara  bond  in favour of Inder Singh the annual reserve rent (haq-ajri) was Rs.  6-12-0  and in the case of Raj Kumar Mahto  the  annual

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reserve rent (haq-ajri) was Rs. 6/-. Broadly stated, these terms indicate three features.  First, the  mortgagee shall have possession and occupation  of  the mortgaged  property and appropriate the produce  thereof  in lieu of interest on the mortgage money and the mortgagor had no claim to any excess produce or mesne profits against  the mortgage.   Secondly,  the  mortgagee  was  to  pay  to  the mortgagor  the  amounts  mentioned in each  ijara  bond  the annual reserve rent or haq-ajri.  Thirdly, the mortgagor was liable for payment of the Government revenue or cess. The  High Court found that the mortgagees paid  the  revenue and cess out of haq-ajri.  In Title Suit No. 54 of 1950  the High  Court held that the total amount of revenue  and  cess came to Rs. 15-9-3.  The haq-ajri in that suit was Rs. 12/-. It therefore followed that every year the mortgagee paid Rs. 3-9-0  in excess of the amount haq-ajri.  The mortgagor  was liable to the mortgagee for the excess payment.   Similarly, in Title Suit No. 55 of 1950 the mortgagee paid revenue  and cess amounting to Rs. 9-13-3.  The haq-ajri under the  ijara bond in that suit was Rs. 6-12-0.  The result was that every year the mortgagee paid Rs. 3-1-3 in excess.  The  mortgagor was  liable  to  the mortgagee to pay  that  excess  amount. Again,  in  Title Suit No. 56 of 1950 the High  Court  found that  the  mortgagee  paid  every  year  revenue  and   cess amounting  to  Rs. 7-12-0.  The haq-ajri there was  Rs.  6/. The  mortgagee therefore paid annually Rs. 1-12-0 in  excess of  haq-ajiri.  The mortgagor was liable to pay  the  excess amount to the mortgagee. In  the  present appeals, the mortgagor had  undertaken  the liability to pay the revenue and cess.  The mortgagor failed to  pay the same.  The mortgagees paid the revenue and  cess on be- 1020 half of the mortgagor.  The mortgagees were entitled to  the excess  payment of the amount of revenue and  cess,  because the mortgagor was liable to pay the same. The mortgage bonds in the present case provided that as  Ion as  the  mortgagee  was in possession of  the  property  the receipts from the mortgaged property shall be taken in  lieu of  interest  on  the principal money.  That  amounts  to  a stipulation  that the receipts from the  mortgaged  property will  be  taken  in lieu of the interest  on  the  principal money.  That is section 77 of the Transfer of Property  Act. The provisions as to accounts contained in section 76(g)  of the  Transfer  of Property Act are excluded in  cases  where section 77 of the Transfer of Property Act applies.  Section 77  of the Transfer of Property Act applies to  the  present appeals.  Further, the mortgages had to pay to the mortgagor a fixed amount, namely, the haq-ajri.  There was nothing  to account on the part of the mortgagees in relation to payment of haq-ajri.  On the contrary, the mortgagor was liable  for the payment of Government revenue and cess. Under  section  76 (c) of the Transfer of Property  Act  the mortgagee in possession, in the absence of a contract to the contrary, must pay the Government revenue and other  charges of a public nature and arrears of rent in default of payment of which the property may be summarily sold.  In the present case,  the mortgagor was liable for payment of both  revenue and cess.  Therefore, the mortgagees were entitled to add to the mortgage money the amount for which the mortgagor  under the terms of the mortgage was liable. Section  4  of the Cess Act, 1880 defines ’annual  value  of land’ to mean the total rent which is payable or, if no rent is  actually payable, would, on a reasonable assessment,  be payable,  during the year by all the cultivating raiyats  of

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such land in the actual use and occupation thereof.  Section 5  of the Cess Act, 1880 states that all immovable  property to which the Act applies shall be liable to the payment of a local cess.  Section 6 of the Cess Act, 1880 provides as  to how the cess is to be assessed.  Section 38 of the Cess Act, 1880  provides as to how rate of local cess’ on  the  annual value of land is ’to be fixed.  Section 98 of the Cess  Act, 1880  enacts that the amount which may become due under  the provisions  of the I Cess Act in respect of arrears of  cess shall be deemed to be a public demand. Section 99  provides that  the  ’Collector may recover dues out of rent  and  the Collector’s  claim to have priority.  These provisions  show that  cess is linked with rent.  Cess is payable  on  annual value  of land.  Annual value is linked with rent.  Cess  is deemed  to be a public demand.  The mortgagee were  entitled to add the amounts paid by them towards revenue and cess  on the mortgage money. 1021 The High Court was correct in refusing the mesne profits. On  behalf  of  the respondents it was  mentioned  in  their statement of case that the appellant after having  deposited the  further amount after the decree of the High  Court  had taken  possession  of  the land.   This  statement  was  not challenged and denied by the appellant.  This indicates that the appeals have now become academic. The  appeals therefore fail and are dismissed.  The  respon- dents will be entitled to one set of costs in this Court. V.P.S.                      Appeals dismissed. 1022