JUDGMENT
Ramratna Singh, J.
1. This appeal is by one of the defendants in a mortgage suit. The appellant and respondents 2 to 4 executed a usufructuary mortgage bond in favour of plaintiff-respondent No. 1 on the 19th June, 1942 for Rs. 20,000/- bearing interest at the rate of eight annas per cent per mensem, and in lieu of interest they put the mortgagee in possession of a house situated in the town of Muzaffar-pur which they hypothecated as security for the loan. Each of the four mortgagors had one-fourth share in this property; and it was stipulated in the bond that even one of the mortgagors would be entitled to get his share in the house released on payment of his quota of the mortgage money, that is, Rs. 5,000/-. The due date of payment of the mortgage dues was the 3Oth Baisakh 1352 Fas’li, which expired long before the institution of the suit.
The mortgagors took a lease back of the house for three years from the 19th Asarh 1349 Fasli, corresponding to the 17th July, 1942, A. D. and a Keraiyanama was executed by them on the 24th September 1942. The rent payable was Rs. 100/- per month, Rs. 25/- being the quota of each of the mortgagors. Even after the expiry of the term of the lease, the defendants continued to occupy the house and paid rent to the plaintiff-respondent at the stipulated rate. Three of the mortgagors, namely, defendants 1, 3 and 4, who are respondents 2 to 4 paid off their quotas of the mortgage money as well as of the rent; and thereafter only defendant No. 2, who is the appellant, has been holding over his share in the house, as he has not yet paid his quota of the mortgage dues.
A suit for arrears of rent from April 1953, to August 1954 was instituted against the appellant in the first Court of the Munsif at Muzaffarpur, and it was pending on the date the present suit was filed. The rent had not been paid by him even thereafter and in the present suit rent at the rate of Rs. 25/- per month from September 1954 to February 1955 with interest at one per cent, per month has been claimed, the stipulated rate of interest payable on the rent being two annas per rupee per month. A further relief was sought for recovery of the unpaid balance of the mortgage money on the ground that non-payment of rent amounted to dispossession of the mortgagee, by sale of the entire mortgaged property in view of the stipulation in the bond that, for any outstanding balance of the mortgage dues, the entire mortgage property would remain mortgaged to the mortgagee.
2. Each of the defendants filed a separate written statement; but their defence was substantially the same. It was alleged that the shares of the defendants 1, 3 and 4 in the house could not be held liable for the dues against defendant No. 2, the appellant. Another defence was that the plaintiff could not sue for the mortgage money, inasmuch as non-payment of arrears of rent does not amount to dispossession. The last plea taken was that the claim for the mortgage money was barred by the provisions of Order 2 Rule 2 of the Civil Procedure Code, because it was not included in the previous suit for arrears of rent.
3. The learned Subordinate Judge dismissed the suit against defendants 1, 3 and 4 and granted a decree for money in respect of the mortgage clues and the arrears of rent against the appellant alone. Though he found that according to the stipulation in the mortgage bond, the plaintiff was entitled to enforce the charge against the entire mortgaged property for realisation of the balance mortgage money, a mortgage decree for sale could not be passed inasmuch as there was no such stipulation.
4. The learned advocate for the appellant challenged the judgment and the decree of the trial Court on the ground that the mortgage money could not be recovered in the present suit, firstly, because the non-payment of rent by the appellant did not amount to dispossession of the mortgagee and, secondly, because the claim nor mortgage money is barred by the provisions of Order 2 Rule 2 of the Code of Civil Procedure on account of the previous rent suit.
5. In support of the first ground, the learn-ed advocate for the appellant relied on the well-known proposition of law that the possession of the lessee is the possession of the lessor. But this proposition applies to a case where there is purely the relationship of landlord and tenant. This principle does not apply where a usufructuary mortgage and a keraiyanama are deemed to form part of one and the same transaction and in essence the rent is payable by the mortgagor-tenant in lieu of the usufruct of the mortgaged property or interest of the mortgage money that would be payable to the mortgagee landlord. , It is, therefore, necessary to examine whether on the facts of the present case the lease or the keraiyanama was an independent transaction. In the usufructuary mortgage bond, that is the sudbharna bond, dated the 19th June 1942, the following recitals are important :
“We have received Rs. 20,000/- loan bearing interest at Re. -/8/- per cent per month, from the creditor claimant.
* * * * * We, the executants promise to pay the entire said bharna money to the aforesaid creditor on the full moon day of Baisakh 1352 Fasli and to take this sudbharna bond back. Till payment of the bharna money, this bond will remain intact with these very stipulations.
In lieu of satisfaction of interest of the said loan we, the executants, have given possession and occupation of the property mentioned in column No. 5 to the aforesaid bharnadar. It is desired that the aforesaid creditor should enter into and remain in possession and occupation of the said property and should continued (sic) to appropriate the income thereof till payment of the loan. We, the executants have made the claimant agree to this also that if we, intend, we may after the expiry of the term, pay at least Rs. 5000/- (Five thousand) i.e. one-fourth of the amount in a lump sum and may get one-fourth of the house in one side, redeemed from the bharna Hen, and that the person amongst us who will pay the money, will take the same in his possession. The remaining property will remain in bharna in lieu of the remaining amount as before, but the entire property will remain mortgaged and hypothecated in lieu of the remaining bharna money.
In satisfaction and security of the said loan principal with interest, we, the executants, have mortgaged and hypothecated the bharna property to the said creditor with the condition that till payment of the bharna money, we shall not execute any subsequent mortgage bond, sale deed ….. in favour of anybody else in respect of the said property, which may render the realisation of this loan difficult and inconvenient.” In the Keraiyanama in question the executants have referred to the Sudbharna bond and stated that in the sudbharna property they have their grocery shops in some Kitas and they reside in some kitas. Hence, they requested the mortgagee to let the house on a reasonable monthly rent also that “we may keep our shops running therein and live with our dependents.” The mortgagee claimant had accepted their request and they had taken the house from the “bharnadar claimant” for a term of three years beginning from the 17th July 1942 on a rental of Rs. 100 per month and in token of that fact they were executing this Keraiyanama on the 24th September 1942. The aforesaid recitals in the two documents read to gether clearly show that they form part of one and the same transaction, though they were executed on different dates. The interest payable, according to the sudbharna bond was Rs. 100/-per month; and in lieu of that interest, the mortgagee was put in possession of the sudbharna property. The Keraiyanama shows — and it is admitted — that the rent payable by the mortgagors, who took the sudbharna property on rent, was Rs. 100/- per month; and, in fact they got back possession of the property from the 17th July 1942, though the Keraiyanama was executed on the 24th September 1942.
It is also mentioned in the Keraiyanama that, in case the executants defaulted in payment of rent for three months, the sudbharnadar-claimant would be competent to take the property in his own possession. Thus, there is no doubt that the two transactions namely the sudbharna and the lease, form part of one and the same transaction even though there was a difference of a few weeks between the date of the sudbharna bond and the date on which the mortgagors took back possession of the sudbharna property on the promise to pay Rs. 100/- per month as rent.
In the case of Ramarayanimgar v. Govinda Krishna, AIR 1927 PC 32 where the usufructuary mortgage bond and the lease back were executed on the same date, their Lordships of the Judicial Committee observed that the two deeds should be read together as they formed part of one transaction, “the lease being in the nature of a machinery for the purpose of realising the interest due on the mortgage”.
In the case of Baijnath Prasad v. Jang Bahadur Singh, AIR 1955 Pat 357 the mortgagors had executed a usufructuary mortgage bond on the 5th July 1945 in respect of a house, a godown and an orchard, etc., and on the 7th July 1943 they had taken back the mortgaged property on lease on the basis of a Keraiyanama wherein they had agreed to pay a certain amount of rent per month to the mortgagee. It was held that the so-called rent represented, in fact the amount of interest payable by the mortgagors on the total mortgage money and the arrangement was thus really a device for regular payment of interest and not a lease of the property in question on payment of rent for their use and occupation. In this view of the matter, it was further held that the mortgagors could not be treated as tenants within the meaning of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, and, therefore, an application for eviction under that Act was not at all maintainable.
In the case of Udai Chand v. Jang Bahadur Singh, AIR 1917 Pat 401 it was observed that in construing whether the relationship of a mortgagor” and a mortgagee had been allowed to merge into the relationship of landlord and tenant, it has to be considered whether a prudent mortgagor and a prudent mortgagee would think it proper to do so in the circumstances of a particular case and that ordinarily the creation of a lease is by way of fulfilment of the terms of the mortgage.
It is obvious from the facts of the present case, as evidenced by the recitals of the mortgage bond and the Keraiyanama, that there was no intention to allow the relationship of mortgagor and mortgagee to merge into that of landlord and tenant.
In the case of Nankeshwar Prasad v. Nand Gopal Ram, AIR 1943 Pat 282, a house had been put in possession of a usufructuary mortgagee and the mortgagor took back subsequently the house on rent on the basis of a Keraiyanama executed by the mortgagor. It was held that the claim, for rent was “a claim arising under the mortgage” within the meaning of that expression in Rule 14 of Order 34, Civil Procedure Code, and that the mortgagee could not execute the decree for rent obtained against the mortgagor by sale of that mortgaged property. The principles underlying these authorities support my conclusion that the usufructuary mortgage bond and the lease in the present case form, in view of the terms thereof part of the same transaction and that the dominant intention underlying these documents was to provide a security for the mortgage loan and not to merge the relationship of the mortgagor and the mortgagee into that of landlord and tenant; and I hold accordingly.
6. Hence, the contention of the appellant that the possession of the lessee in the present case was the possession of the lessor fails; and it follows that non-payment of rent by the appellant did amount to dispossession of the mortgagee-respondent.
There is ample authority to show that the failure of the mortgagor-tenant to pay rent in lieu of interest to the mortgagee-landlord, or the holding over by such a tenant against the consent of the mortgagee after the determination of the lease amounts to disturbance of possession of the mortgagee. In the case of Hira Lal v. Ghasitu, ILR 16 All 318 (FB), the respondent executed a mortgage bond on the 13th January 1886 in favour of the appellants under which the mortgagees were entitled to possession of the property until the mortgage money with interest had been repaid. On the 14th January 1886 the appellants granted a lease over the same property to the respondent for a term of 51/2 years and in the lease the respondent said that if he cultivated the land after the said term, he would execute another Kabuliat. The respondent held over on the expiration of the lease but did not execute a fresh Kabuliat. He tendered rent for some periods subsequent to the expiry of the lease, but such tender was refused by the appellants, who then sued for recovery of the mortgage money alleging that their possession had been disturbed. In the second appeal there was a reference to the Full Bench of the question whether the holding over by the mortgagor-tenant against the consent of the mortgagee after the determination of the lease amounted to a disturbance of possession within the meaning of Section 68 (1) (c) of the Transfer of Property Act; and the Full Bench answered the question in the affirmative.
In that case, it was argued on behalf of the respondent that the mere efflux of time did not determine his right in the contract of the lease to continue in possession and that he could not be ejected except by proceedings in a Court of Revenue under the North Western Provinces Rent Act of 1881. It was held that the plaintiffs-appellants were not suing for a decree for ejectment and the moment the lease is determined by efflux of time the mortgagees were entitled to have the contract carried out in its entirety and to be put in possession of the property by the mortgagor.
Answering the argument that the possession of the mortgagor-tenant was the possession of the mortgagee-landlord, Banerji, J., one of the five Judges constituting the Full Bench observed :
“Were we, therefore, to hold that he had no right to remain in possession and yet that his possession was equivalent to the possession of the mortgagees, we should be allowing the mortgagor to take advantage of his own wrongful conduct.”
Of course there is a difference between the facts of that case and those of the present case. There, the mortgagees refused to accept rent after the term of the lease expired, where as in the present case the plaintiff-mortgagee instituted a suit for recovery of arrears of rent from April 1953 to August 1954; but this fact does not matter, because rent was never tendered in the present case since April 1953. Moreover no term was fixed in the Keraiyanama and therefore the tenancy would continue until the mortgage was completely redeemed, unless the mortgagee-landlord enforced his right of re-entry in accordance with paragraph 4 of the Keraiyanama, which reads thus :
“If rent will fall due from us the executants, continuously for three months, the claimant will be competent to take the said house in his self possession and let the same to others or to keep the same in his own occupation.”
The appellant’s possession of the unredeemed portion of the house after the default in payment of rent for every three consecutive months amounted, therefore to dispossession of the mortgagee. This view is supported by the decision of a Division Bench of this Court in the case of Udai Chand, AIR 1917 Pat 401 referred to earlier, where it was held that failure to fulfil the conditions of such a lease amounts to failure on the part of the mortgagor to discharge the statutory obligation of maintaining the mortgagee in undisturbed possession of the mortgaged property.
7. The terms of the bond in suit show that it was the obligation of the appellant-mortgagor to maintain the mortgagee in undisturbed possession of the mortgaged property. On account of the recital in the bond that the entire mortgaged property would remain mortgaged (makful) and hypothecated (paeband) for the unpaid mortgage money, it was agreed in the trial court that the bond is a combination of a simple mortgage and a usufructuary mortgage. That being so, where the mortgagee is dispossessed by the mortgagor, there is no difference in respect of the right of the mortgagee to recover the mortgage money, whether the mortgage is a pure usufructuary mortgage or usufructuary cum simple mortgage. In the case of a purely usufructuary mortgage it is the statutory obligation of the mortgagor under Clauses (c) and (d) of Section 68 of the Transfer of Property Act, to secure to the mortgagee, undisturbed possession of the mortgaged property. In the case of an anomalous mortgage, the rights and liabilities of the parties shall be determined by the contract as evidenced in the mortgage deed (vide, section 98 of the said Act). The terms of the bond required the mortgagee to be put in undisturbed possession until the discharge of the mortgage debt. There was, therefore, an implied contract that, in case of dispossession by one or more of the mortgagors, the mortgagee was entitled to sue for the mortgage money after dispossession. As the appellant never tendered the rent since April 1953 the mortgagee was deprived of the possession of the security in view of the term contained in paragraph 4 of the keraiyanama, which formed part of the same transaction as the mortgage; and the appellant made himself liable to pay the mortgage money to the mortgagee after non-payment of rent for any three consecutive I months. The first ground urged by the learned advocate for the appellant, therefore, fails.
8. The next ground urged by him is based on Order 2, Rule 2 of the Code of Civil Procedure which required the plaintiff to sue for all the reliefs arising out of the same cause of action. It was argued that, in as much as the claim for the mortgage money as well as the claim for arrears of rent arises out of the same cause of action, the plaintiff-respondent ought to have sued for the mortgage money in the previous suit for arrears of rent and, as he failed to do so, the claims in the present suit are now barred. But this argument is absolutely misconceived. The cause of action for recovery of rent arose every month on the basis of the karaiyanama when the rent was in arrear, whereas the cause of action to sue for the mortgage money on account of dispossession arose whenever there was default in payment of rent for three consecutive months. It is true that rent was payable in lieu of the usufruct of the mortgaged property which is in its turn in lieu of the interest of the mortgage loan; but as the rent was payable every month, the effect of the contract was that interest was payable every month not after the due date along with the mortgage money.
In this connection the following observation of the Judicial Commissioner in Kishan Narain v. Pala Mal, AIR 1922 PC 412 in respect of the application of Order 2, Rule 2 is pertinent :
“It does not appear to their Lordships that if the mortgage had provided, as mortgages always do in this country, for an independent obligation to pay the principal and the interest, in a suit brought to obtain a personal judgment in respect of the interest alone the rule would have prevented a subsequent claim for payment of the principal. In such a case the cause of action would have been distinct. The matter is however, different if the non-payment of the interest causes the principal money to become due, as in that case the cause of action — the non-payment of the interest — gives rise to two forms of relief which the Code provides shall not be split.”
In other words, unless the non-payment of the interest causes the principal money to become due, an earlier suit for arrears of interest would not bar a subsequent suit for the principal money, as they arise out of two distinct causes of action; that is rule 2 would not be a bar to the latter suit.
In the present case, the suit for arrears of rent arises out of a cause of action on account of the non-payment of rent for any month, while the cause of action for the principal mortgage money arises on account of the non-payment of rent for any three consecutive months; and, therefore, Rule 2 is not a bar to the present suit. It is true that the mortgage deed and the keraiyanama arise out of the same transaction or, in other words, the claim for rent and the claim for mortgage money arise “under the mortgage”; but Order 34, Rule 14 of the Code lays down that Order 2, Rule 2 does not affect a separate suit in respect of arrears of rent and the only bar in the way of the mortgagee is that he cannot execute the decree for arrears of rent by sale of the equity of redemption. In view of this position, it cannot be said that the claim for mortgage money and the claim for arrears of rent arise out of the same cause of action; and, therefore, the provisions of Order 2, Rule 2 do not operate as a bar to the claims of the plaintiff-respondent in the present suit.
9. The learned advocate relied on a decision of a Division Bench of this Court in Phulchand Sah v. Dinkar Prasad AIR 1955 Pat 297 in support of his contention that the claim in the present suit is barred by Order 2, Rule 2; but the facts of that case were different. A sudbharna bond was executed on the 12th October, 1936, and, in lieu of payment of interest, the mortgagees were put in possession so that they would appropriate or enjoy the usufruct of the sudbharna land, measuring about 88 bighas. In pursuance of a stipulation in the bond that the mortgagees would release from their possession a certain area for every one hundred rupees paid, 21 bighas were released on payment of Rs. 600/-. There was a further stipulation that in the event of dispossession by the mortgagor, the mortgagees would be entitled, by way of damages to the value of the crop grown on the land in the year in which the dispossession took place. On the 14th April, 1943, the mortgagor dispossessed the plaintiffs-mortgagees from the remaining mortgaged land without making any payment of the balance amount of the mortgage money; and a suit was, therefore, instituted on the 17th December 1943 claiming Rs. 998/- as the price of the paddy grown on the land in the year in which dispossession took place. While this suit was pending at the appellate stage, the plaintiffs filed another suit on the 26th July, 1946. This time they claimed their share of the principal mortgage money together with compensation or mesne profits for the period subsequent to the institution of the earlier suit and wanted a mortgage decree for the total claim.
One of the picas in this suit was that the claim was barred under the provisions of Order 2, Rule 2 of the Civil Procedure Code. On behalf of the plaintiffs it was argued before the High Court that the claim for compensation in the first suit for the first year of dispossession was founded on dispossession, whereas the claim for the principal mortgage money in the second suit was founded on non-payment of the plaintiffs-appellants share of the mortgage money on the due date; and it was held that inasmuch as the claim in both the suits arose out of the same cause of action, namely, dispossession on the 14th April, 1943. Order 2, Rule 2 applied with regard to the claim in the subsequent suit. This view was taken there, because the relevant terms in the subdharna bond was construed to mean that “in the event of dispossession the creditor would be entitled to sue for the principal mortgage money together with damages on produce basis at the rate of the produce of the surrounding land”.
It will be noticed however, that in the present case there is no term in the sudbharna bond and, in fact, the sudbharna bond in a suit is absolutely silent regarding dispossession or consequences thereof. It will be seen from the above discussions that the mortgagee-respondent is entitled to sue for the mortgage money in the present case on the basis of the legal consequences of dispossession of a mortgagee in possesion; and, as found earlier, non-payment of rent by the mortgagor-tenant amounted to dispossession in the present case. Hence, the said decision-in Phulchand’s case does not apply to the present case inasmuch as the present suit is based on a cause of action completely different from the cause of action of the previous rent suit; and, therefore, the provisions of Order 2 Rule 2 do not apply.
10. There was a cross-objection on behalf of respondent No. 1. It may be incidentally stated that the original respondent No. 1 died during the pendency of the appeal and is now represented by his sole legal representative. In the cross-objection the only ground taken is that the trial court ought to have granted a mortgage decree for realisation of the mortgage money by sale of one-fourth of the mortgaged property belonging to the appellant, in view of Section 68 of the Transfer of Property Act.
During the hearing in this Court, Shree Kailash Roy, Advocate for respondent No. 1, conceded that a mortgage decree for sale of the property cannot be passed under Section 68, which applies to a purely usufructuary mortgage. If however, the mortgage in question is a combination of both simple and usufructuary mortgage a decree for sale of the mortgaged property can be passed on account of the mortgage being a simple mortgage as well.
This proposition was conceded at the bar; but the learned Advocate for the appellant contended that, inasmuch as there is no term in the bond in suit for sale of the mortgaged property, it cannot be called a simple mortgage and it is a purely usufructuary mortgage. One term of the bond is that the mortgagee is to continue in possession as bharnadar till payment of the bharna money; but there is another term also in paragraph 5 of the bond which says that after the release of a portion of the bharna property, in addition to the right of the mortgagee to remain in possession of the unreleased portion as before, the entire mortgaged property would remain mortgaged and hypothecated (makful or paeband) in lieu of the remaining bharna money.
The question now is whether this term contains the ingredients of a simple mortgage. Acording to Section 58 (b) of the Transfer of Property Act, in a simple mortgage, “the mortgagor binds himself personally to pay the mortgage money and agrees, expressly or impliedly, that in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold’. It is well settled that the right to cause the mortgaged property to be sold may be conferred by implication, not necessarily by express words.
In Anand Ram v. Dhanpat Singh, 1 Pat LJ 563 : (AIR 1916 Pat 11), it was held that a deed which expressly mortgages and hypothecates the property charged is a valid simple mortgage. In this case as well as in Shiva Prasad v. Beni Mabhab, AIR 1922 Pat 529, their Lordships of the Patna High Court quoted with approval the following observation of Chamier, J. (as he then was) in Dalip Singh v. Bahadur Ram, ILR 34 All 446:-
“In order that there may be a simple mortgage, there must be (a) a transfer of an interest in specific immovable property, (b) a ‘ personal undertaking by the mortgagor to pay the mortgage money, and (c) an agreement express or implied, that in the event of the mortgagor failing to pay according to his contract, the mortgagee shall have the right to cause the mortgaged property to be sold ….. In a simple mortgage the interest transferred is the right to have the property sold, and this need not be provided for in the deed in so many words; it may be inferred from the language used and where such an agreement can be inferred, then the requirements of condition (a) are satisfied.”
In Ramnarain Singh v. Adhindra Nath, ILR 44 Cal 388 : (AIR 1916 PC 119), the Privy Council said that if the mortgagor be in the first instance under no personal liability, such liability may arise under Clause (b) or (c) (now Clause (c) or (d) ) of Section 68 of the Transfer of Property Act. In view of my finding in the present case that the mortgagee was dispossessed of the mortgaged property, Clauses (c) and (d) of section 08 are attracted and, therefore, personal liability arises.
In view of the term that the property shall remain mortgaged (makful) and hypothecated (paeband), there is an implied agreement that the mortgagee shall have the right to cause the mortgaged property to be sold; and therefore, there is a transfer of an interest in the property. Thus, all the three conditions of a simple mortgage are fulfilled. Hence, the mortgage in question is a combination of a simple mortgage and a usufructuary mortgage; and the mortgagee-respondent is entitled to realise the dues by sale of one-fourth share of the mortgaged property be-longing to the appellant.
11. In the result, the appeal is dismissed and the cross-objection is allowed, with costs to respondent No. 1. The decree of the lower Court is confirmed with the modification that it will be a mortgage decree for the amount decreed. The appellant shall pay the decretal dues within a period of six months from today and, on his failure to do so, the dues will be realised by sale of the appellant’s one-fourth share of the mortgaged property. Let a preliminary decree be drawn up accordingly.
Kanhaiya Singh, J.
12. I agree.