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Sachdanand Prasad vs Babu Sheo Prasad Singh on 6 May, 1965

Supreme Court of India
Sachdanand Prasad vs Babu Sheo Prasad Singh on 6 May, 1965
Equivalent citations: 1966 AIR 126, 1966 SCR (1) 158
Author: R Bachawat
Bench: Bachawat, R.S.
           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
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
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
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
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

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