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Patna High Court
Natho Singh And Ors. vs Lachu Singh And Ors. on 3 November, 1927
Equivalent citations: 107 Ind Cas 156
Author: D Miller
Bench: D Miller, Adami


Dawson Miller, C.J.

1. The suit out of which this appeal arises was instituted by the plaintiffs for a declaration of their title to, and recovery of possession of 34 bighas odd of what is described as bakasht land in village Bariarpur which lies within, Taluka Zafarpur. It appears that Taluka Zafarpur was mortgaged in the year 1895 to a Mr. Thomas, who in 1907 obtained a decree upon his mortgage against the mortgaged property and in 1908 sold the decree by a kabala to the plaintiffs. In 1919 the plaintiffs appear to have obtained execution of the decree and purchased the property themselves at the auction sale. When they came to take possession of village Bariarpur, they found various persons in possession over certain portions of the land and they brought this suit against seven different sets of defendants for the purpose of ousting them and getting possession over the lands in suit. We are concerned in this appeal only with the interest of the defendants Nos. 7 to 10 who are some of those who have been described as the second party defendants in the suit and their interest is confined to 12 bighas of land of which they obtained a tenancy from the mortgagor in possession in the year 1912. They claimed that having obtained a permanent lease of their 12 bighas from the mortgagor, who was then in possession, they were entitled to remain in possession and the purchasers at the sale in execution of the mortgage decree could not turn them out.

2. The learned Subordinate Judge of the trial Court found against the present appellants on the ground that the permanent lease granted to them by the mortgagor did not appear to be bona fide and as against the plaintiffs. On appeal to the District Judge, he puts the matter somewhat differently. He apparently considers that there was some fraud or collusion between the mortgagor and the appellants and says: “In my opinion there can be no doubt that this lease was a collusive and fraudulent one and was executed to cheat Harkhit’s creditors and was not executed bona fide in the ordinary course of the management of the property”.

3. From that decision of the defendants Nos. 7 to 10 have appealed, and two points have been relied upon in argument in support of their appeal. In the first place, it is pointed out that in the plaint from first to last there is not a word suggesting that there was any fraud in the transaction which resulted in the permanent lease granted to the appallants, nor is any mention made of any collusion. The only case made with regard to these defendants is that which appears in para. 8 of the plaint, and the allegation there is that it was admitted by all parties that the said lands formed the khudkasht of the former proprietors. It then refers to certain proceedings which were pending between various parties interested in Taluka Zafarpur and continues; “During the pendency of the aforesaid criminal case, the defendants’ 1st party had ceased to possess any interest in Taluka Zafarpur aforesaid and, without any title to keep possession of the said lands by making settlement with the defendants 2nd and 7th parties, was urged on their behalf although they had no right to keep possession or to make settlement with the tenants, nor was any such right urged on their behalf, and their entire interest in Mauza Bariarpur aforesaid had been transferred”. This passage is somewhat obscure but it is the only allegation put forward in the plaint so far as the case against the present appellants goes and the allegation there apparently is that the mortgagors being no longer proprietors had no power to grant a permanent lease to the appellants. There is not a word of any fraud or any collusion on the part of the defendants. Again, when we turn to the issues in the case, there is no suggestion of any fraud or collusion between the mortgagors and the appellants. The seventh issue is “Have defendants 2nd and 7th parties acquired valid tenancy right as alleged? “It is not disputed that a permanent lease of 12 bighas of bakasht land was granted to the defendants Nos. 7 to 10 at a rental of Rs. 5 per bigha and it is not disputed that they have been in possession thereof since that date up to the present time and the mortgagors were certainly in possession in 1912. Therefore, having produced their deeds, it seems to me that the appellants had done all that was necessary to show prima facie that they had a right to remain in possession. If; in fact, the mortgagors had no interest in the property at the time they granted the lease, then undoubtedly the lease would not be valid and that being the only issue raised in the pleadings and it being no longer disputed that the mortgagors were proprietors at least to the extent of a 10-annas share in the property at the time, when the permanent lease was granted in 1912, it seems that there was an end of the case made by the plaintiffs in their plaint, and all these questions of fraud and collusion which were considered by the lower Appellate Court ought never to have been taken into consideration at all. There can be no collusion between parties in doing an. act they have a perfect right to do.

4. The only other point was whether assuming the mortgagors were in possession notwithstanding the allegation made in the plaint, they were entitled to grant a permanent lease of 12 bighas of the bakasht land to these defendants, or whether such a proceeding was in contravention of Section 60 of the Transfer of Property Act. On this question also I think that our decision must be in favour of the appellants. The section provides as follows:

A mortgagor in possession of the mortgaged property is not liable to the mortgaged for allowing the property to deteriorate; but he must not commit any act Which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act. Explanation.–A security is insufficient within the meaning of this section unless the value of the mortgaged property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the amount for the time being due on the mortgage.

5. On that part of the case all we know is that the property was sold and fetched a sufficient sum to satisfy the whole of there mortgage debts. There is not a scrap of evidence before the Court to show that the security was in any way rendered insufficient by any act on the part of the mort gagors in granting the permanent lease to these appellants. It was contended, however, on behalf of the respondents that the very act of granting a permanent lease of bakasht lands to a tenant is itself an act which is outside the scope of the authority of the mortgagor in possession. I cannot accede to such a proposition. It seems to me that the effect of the section is correctly and concisely stated at page 1176 of Sir Hari Singh Gour’s book on the Law of Transfer, (5th Edition) where he states the law as laid down in the case of Wazir Ali v. Moti Chand 2 A.L.J. 291 and says “But so stated, the statement is too wide. In the case of an English or possessory mortgage it is perfectly correct to say that the mortgagor can make no lease without the consent of the mortgagee, but in any other case there appears to be no authority for similarly limiting the powers of the mortgagor. On the other hand, being the owner of his own property, he is not only entitled to create leases but may do so irrespective of their effect upon the mortgagee’s security, provided only they are not wasteful within the meaning of this section, which permanent or long leases would presumably be if they materially prejudice the saleable value of the property and are injurious to the interest of the mortgagee”. Then in a later passage he says “The test by which the [mortgagor’s leases would be judged is stated in the section, viz, were they destructive or permanently injurious to the property likely to render the mortgagee’s security insufficient. It has been held in some cases that where the mortgagor’s leases are questioned by the mortgagee the burden is on the lessee to prove that they were usual and given in the ordinary course of management. This view follows the English Law but ignores the different stand point from which law views the mortgagee’s rights in the country which an apprehensive mortgagee may enlarge by contract, but not otherwise than as provided in this section, even if he is an English mortgagee”.

6. In the present case there is not from Start to finish a single scrap of evidence to show that this permanent lease granted by the mortgagors in possession has in any way been destructive or- permanently injurious to the mortgage-debt. The debt has in fact been satisfied. If a case of that sort was to be made out, then it was clearly, in my opinion, for the plaintiffs to make it. But as I have already said, the evidence is absolutely silent on the point and when we consider that the property sold was sufficient to satisfy the whole of the mortgagees’ claim, then I cannot see how it can in any view of the case be said that the permanent lease granted in 1912 was in contravention of Section 66 of the Transfer of Property Act, In my opinion the learned District Judge ought never to have entered into his question of fraud and collusion which was nowhere pleaded in the plaint and does not even find a place in the issues framed before trial.

7. I think that this appeal must be allowed with costs here and in the Courts b6low. The judgment of the District Magistrate will be set aside as against these appellants and in lieu thereof the suit will be dismissed as against the present appellants with costs throughout.

Adami, J.

8. I agree.

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