JUDGMENT
Shambhu Prasad Singh, J.
1. This second appeal is by defendant No. 2 against concurrent judgments and decrees of the two courts below, decreeing the suit of the plaintiff for a mortgage decree on the basis of a mortgage dated 9-8-1950 Facts relevant for the decision of the appeal are not in dispute and may briefly be stated On 9-8-1950, defendant nos. 1 and 2 executed a deed of mortgage in favour of the plaintiff for a consideration of Rs. 4000 for a period of three years in respect of holding Nos. 58 and 59 in Ward No. I of Gaya Municipality. On the same date, the plaintiff executed a deed of lease in their favour for a period of three years in respect of the property mortgaged. The defendants were to pay a sum of Rs. 40 per month to the plaintiff as rent. On 17-1-1953 defendants nos. 1 and 2 sold the whole of holding no 59 and part of holding No. 58 to the appellant. A sum of Rs. 4,000 out of the consideration money for the sale deed was left in deposit with the appellant for payment to the plaintiff Rent up to January, 1953 was paid to the plaintiff and thereafter it was stopped. Subsequently, defendant nos. 1 and 2 sold the remaining portion of hold-ins No. 58 to defendant No. 4
During the pendency of this suit, holding No. 58 was auction purchased by defendant No. 5 and, therefore, he too was added as a party to the suit. Before the institution of the suit the plaintiff had filed a case for eviction before the House Controller Gaya, as according to him defendant No. 3 had agreed to pay rent to the plaintiff but failed to pay. This case was dismissed by the Controller on the finding that there was no relationship of landlord and tenant between the plaintiff and defendant No. 3, i. e., the appellant. Simple defence of defendants 1 and 2 was that they had parted with the house and left with no interest in it and, therefore, not liable for the money under the mortgage. Defence of defendant No. 3 i. e., the appellant, was that he was willing to pay Rs. 4,000 to the plaintiff, if he accepted it and did not claim any damages; that as the plaintiff was not a registered money lender the suit was barred under Section 4 of the Bihar Money Lenders Act and that no mortgage decree could be passed in the suit as prayed for by the plaintiff The trial court passed a mortgage decree in favour of the plaintiff which has been confirmed by the lower appellate court on appeal
2. Mr. Kanhaiyaji. appearing for the appellant, has raised the following three points :–
(1) As found by the two courts below, it was an usufructuary mortgage and no mortgage decree, i. e., a decree for realisation of the mortgage money by sale of the property mortgaged, could be passed.
(2) The suit was barred under Section 4 of the Bihar Money Lenders Act and
(3) As the plaintiff did not claim any interest, the courts below were wrong in granting him a decree for interest prior to the dale of institution of the suit as well.
The second and third points raised by Kanhaiyagi do not require any detailed consideration and they may be disposed of before taking up for discussion the first point raised by him. Both the courts below have concurrently held that the plaintiff was not a money lender within the meaning of the Bihar Money Lenders Act inasmuch as money lending was not his profession and, therefore, the suit was not barred under Section 4 of the Bihar Money Lenders Act. It is now well settled that Section 4 of the Bihar Money Lenders Act applies only to those who carry on the profession or business of money lending. In the case of Sano Kashinath Chowdhury v. Patitto Sabuto, AIR 1942 Pat 384, a Bench of this Court, with reference to Orissa Money Lenders Act containing similar provisions as Bihar Money Lenders Act, held that an element of continuity and habit is essential to constitute the exercise of a profession or business and a man does not become a money lender merely because he may, upon one or several isolated occasions, lend money to a stranger.
In this case as well as in the case of Lakhi Narayan Sao v. Smt. Bhagwati Kuer, AIR 1963 Pat 350, which is also a decision of a Bench of this Court on the Bihar Money Lenders Act, it was observed that the business of money lending imports a notion of system, repetition and continuity. In the case of Mt. Surajbansi Kuer v. Mt. Larho Kuar, AIR 1946 310, a Division Bench of this Court held that provisions of Section 4 of the Bihar Money Lenders Act were never intended to apply to cases of isolated or intermittent instances of lending.
In another Bench decision of this Court in Bhutnath Kumar v. Nilkantha Narain Singh. AIR 1949 Pat 400, it was laid down that provisions of the Bihar Money Lenders Act as to registration of the money lenders cannot apply to casual money lenders, Mr. Kanhaivaji, appearing for the appellant, argued, however, that only persons advancing accommodation loans are exempted from the provisions of registration of the money lenders in the Act and in support of this he relied on the observations of Mc-Cardia, J. in the well known case of Edge-low v. Mac Elwee. (1918) 1 KB 205. also quoted in the case of Dr. Nilkanth Prasad v. Bhola Nath, 1965 BLJR 774 by a Bench of this Court. The observations are “A man does not become a money leader by reason of occasional loans to relations, friends or acquaintances, whether interest be charged or not.”
It does not follow from the aforesaid observation that occasional cases of lending to persons other than relations, friends and acquaintances make a person professional money lender. In the very passage which has been quoted in the aforesaid decision it has also been observed “there must be more than occasional and disconnected loans. There must be a business of money lending and the word ‘business’ imports the notion of system, repetition and continuity.” In fact these words which were used in two other decisions of this Court already referred to above, were borrowed from the observations of McCardia, J. Rather, Harries C. J. in the case of Sano Kashinath Chowdhury, AIR 1942 Pat 384 also quoted these observations, In the case of Dr. Nilkanth Prasad 1965 BLJR 774 as well which was cited by Mr. Kanhaiyaji it was held that the particular transaction with which their Lordships were concerned was not a loan within the meaning of the Bihar Money Lenders Act. A case is authority for what it actually decides and there is nothing in the said case to justify a contention that a view, different from one taken in other Bench decisions of this court already referred to above, was taken in this case. Mr. Kanhaiyaji could not point out any error of law in the finding of the courts below that the Plaintiff was not a professional money lender. Whether the plaintiff is a professional money lender or not is a question of fact and there is no substance in his contention that the suit was barred under Section 4 of the Bihar Money Lenders Act.
3. In his plaint, the plaintiff did not specifically claim interest but claimed damages at the rate of Rs. 40 per month which was the rent fixed by the lease deed for the house mortgaged, from the time its payment was stopped till the date of the institution of the suit. The mortgage deed (Ext. 3) provided that in case of dispossession the mortgage will be entitled to realise the entire mortgage money of Rs. 4,000 with interest at the rate of one per cent per annum. The interest at the said rate calculated for the said amount also comes to Rs. 40 per month. As it was a case of a secured loan, the courts below have allowed interest at the rate of 9 % per annum which is less than the amount claimed. The claim for damages was really a claim for interest as agreed in the mortgage deed and the decrees of the courts below cannot be set aside on the ground that the plaintiff did not claim the amount as interest but claimed it as damages. All the relevant facts entitling the plaintiff to the interest were stated in the plaint and it is well settled that it is for the parties to state the facts and for the courts to grant reliefs. In the circumstances, there is no substance in the third contention of Mr. Kanhaiyaii either.
4. According to Mr. Kanhaiyaii, the courts below having found that it was an usufructuary mortgage, could not and should not have granted a mortgage decree, that is, a decree for sale of the mortgaged property inasmuch as the provisions of Section 67 of the Transfer of Property Act, had no application to the facts of the case. On the other hand, it was contended by Mr. R. S. Chatterji, for the plaintiff-respondent, that as the mortgage and the lease
back form part of the same transaction, it was not a case of usufructuary mortgage. But contention of Mr. Kanhaiyaii further was that it could not be a case of simple mortgage and that even if it was a case of anomalous mortgage it would be governed by the terms of the deed and there being no stipulation in it for realisation of the mortgage money, in case of dispossession, by sale of the mortgaged property, the mortgage decree passed by the courts below was illegal. Therefore, it is necessary to decide the nature of the mortgage deed itself before taking up for consideration the question whether Section 67 of the Transfer of Property Act is applicable or not to this case.
It has already been stated earlier while setting out the facts of the case that the deeds of mortgage and lease were executed on the same date. The mortgage deed provided that it could not be redeemed within a period of three years. The lease in favour of the mortgagors by the mortgagees was also for a period of three years. The rent fixed in the lease was Rs. 40/- per month and the interest per mensem to which the mortgagee would be entitled in case of dispossession, according to the terms of the deed of mortgage, was also Rs. 40/-. These circumstances when taken together leave no room for doubt that the mortgage and the lease back were parts of the same transaction.
There are a large number of Bench decisions of this Court in which in similar circumstances it was held that the mortgage and the lease back were parts of the same transaction and reference may be made to an earlier one out of them in the case of Umeshwar Prasad Sinha v. Dwarika Prasad, AIR 1944 Pat 5. Sinha, J who delivered the judgment in the case and with whom Fazl Ali. C. J. concurred, observed.
“. . . . that one test may gene
rally be applied to enable the Court to
say that the two documents form Dart of
one and the same transaction, where it appears on a reasonable construction of the
documents that the properties were given
in security not only for the principal
amount secured under the sudbharna bond
but also for the interest accruing thereupon.
In other words, where the Court finds that
though the documents have taken the shape
firstly of a mere usufructuary mortgage
bond, the mortgagee purporting to take possession of the mortgaged properties but in
reality the second document whereby pos
session is purported to be given back to
the mortgagor is merely a device to ensure
regular payment of the interest, which also
is secured on the same mortgaged propertics, it may generally be said that they are
parts of the same transaction. ”
His Lordship further observed that in such cases the safest rule to follow is to say that each case must be judged on its own facts as disclosed in the transaction between the parties, evidenced by one or more than one document. In the present mortgage deed it was also stipulated that whatever amount of arrears of rent would be found due by the mortgagors, the executants, they would pay it before paying the Rehan money and then would pay the Rehan money. In other words, the mortgage could not be redeemed before the payment of the rent which was really the interest accrued on the mortgaged property. Thus, in the facts and circumstances of the present case, there can be no doubt that the mortgage and the lease back were parts of the same transaction.
5. An intention to deliver possession in present or in future is one of the essentials for an usufructuary mortgage. In absence of such an intention a transaction of mortgage cannot be treated as usufructuary mortgage. It was contended by Mr. Kanhaiyaji that an usufructuary mortgage does not cease to be so merely by reason of the fact that instead of actually taking possession on the date of the mortgage, the mortgagee leases it back to the mortgagor for the period of the mortgage In some cases it may be so, but where the mortgage and the lease back are parts of the same transaction and intention of the parties to the transaction is that the mortgagee should not get possession of the mortgaged properties but would only get interest on the amounts advanced by him, at the stipulated rate, every month, and the document and the deed of the lease back are nothing but merely devices to ensure regular payment of the interest, the transaction cannot be held to be an usufructuary mortgage The aforesaid contention which has been advanced by by Mr. Kanhaiyaii is generally advanced on the reasoning that the mortgage himself is in oossession of the mortgaged property through the lessee who is his tenant but where it is found that the document of the lease back is a mere device to ensure regular payment of the interest, even if the two documents are not executed on one and the same date, there cannot be a relation of landlord and tenant between the mortgagee and the mortgagor.
In the case of Baiinath Prasad v. Jang Bahadur Singh, AIR 1955 Pat 357 the mortgagee, who had leased back the mortgaged properly to the mortgagors, filed an application under Section 11 of the Bihar Buildings (Lease Rent and Eviction) Control Article 1947 before the House Controller for an order of eviction of the mortgagors on the ground that they had not paid rent for a certain period and had sub-let a portion of the house without his permission The House Controller ordered for eviction of the house. On appeal the Collector set aside that order of the House Controller on the ground that the mortgagors were not tenants of the mortgagee. The Commissioner, in exercise of his revisional powers under the Act set aside the order of the Collector and restored that of the House Controller. The mortgagors then
moved this Court under Article 226 of the Constitution of India for a writ of certiorari. A Bench of this Court held that the deed of mortgage and that of lease back, though executed on different dates, were parts of one and the same transaction and that the intention of the parties was that the mortgagee would not get possession of the mortgaged properties but would only get interest on the amounts advanced by him at the stipulated rate per month in the shape of rent, and granted the writ prayed for, quashing the order of the eviction on the ground that on a true construction of the lease deed there was no relationship of landlord and tenant between the mortgagee and the mortgagors.
In the case of Nanekeshwar Prasad v. Nand Gopal Ram, AIR 1943 Pat 282, it was held by another Bench of this Court that where an usufructuary mortgagee, who is to appropriate the rent of the property in lieu of interest on the mortgage loan, subsequently lets out the property to the mortgagor under a kerayanama executed by the mortgagor, the claim for rent by the mortgagee against the mortgagor is a claim arising under the mortgage and hence the mortgagee cannot execute a decree for rent obtained against the mortgagor, by sale of the equity of redemption. Their Lordships relying on the decision of the Judicial Committee in the case of P. Ramarayanimgar v. Maharaja of Venkatagiri, AIR 1927 P. C. 32, held that it was doubtful if the mortgagor could be allowed to redeem the mortgage without paying the arrears due from him as rent and in that view of the matter Order 34 Rule 14 of the Code of Civil Procedure was applicable to the case and the property mortgaged could not be sold. They further observed that after the decision of the aforesaid Judicial Committee, the decision of this Court in the case of Ramnarayan Singh v. Bishavanath Missir, AIR 1920 Pat 723, had iost much of its force.
In Umeshwar Prasad Sinha’s case, AIR 1944 Pat 5 which has already been referred to above, after holding that the mortgage and the lease back formed parts of the same transaction, their Lordships further held that provisions of Rule 14 of Order 34 of the Code of Civil Procedure were a bar to the sale of equity of redemption in execution of a decree for the rent due under the deed of lease back and observed that the proper remedy for the mortgagees would have been to sue for the realisation of the principal and the interest by sale of the mortgaged property
It is manifest from these decisions that their Lordships were not prepared to treat the transactions of mortgage with which they were dealing and which were accompanied with a deed of lease back by the mortgagee in favour of the mortgagor as an usufructuary mortgage, inasmuch as an usufructuary mortgagee is the landlord of the person to whom he leases out the mortgaged property and cannot claim as such, for a decree for sale of the mortgaged property. In the instant case also, as has also been pointed out above, there was an unequivocal stipulation to the effect that whatever amount of arrears of rent would be found due by the mortgagors they would pay it before paying the Rehan money and then will pay the Rehan money or, in other words, they would not be entitled to redeem the mortgage without paying the arrears of rent found due from them.
Thus, there can be no doubt that in this case as well the parties intended that the mortgagee would not get possession of the mortgaged property but would only get interest on the amounts advanced by him at the stipulated rate and the execution of the deed of lease back was nothing but a mere device to ensure regular payment of the interest. The deed of mortgage (Ext. 3), therefore, is not a transaction of usufructuary mortgage. It is not necessary to decide whether it is a simple mortgage or an anomalous mortgage because that will make no difference in law about the mortgagee’s right to sue for a mortgage decree, i.e. a decree for realisation of the mortgage money by a sale of the property mortgaged, fn fact. Mr. Kanhaiyaji, after the position was discussed at the Bar, did not seriously challenge that it was a case of anomalous mortgage.
6. Some decisions were cited before us in which such transactions or similar transactions have been described as a combination of simple and usufructuary mortgage. In most of these cases the mortgages were executed prior to the amendment of sections 58 and 98 of the Transfer of Property Act in the year 1929 (by Act XX of 1929). Prior to the amendment, Section 58 did not define an anomalous mortgage and Section 98 was as follows:
“In the case of a mortgage, not being a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and third, of such forms, the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.’
By the amending Act the expression ”an anomalous mortgage” was substituted for “a mortgage, not being a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and third, of such forms” in Section 98 and a new clause was added to Section 58 as follows:
“Anomalous mortgage.
(g) A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.”
According to the law as it stood before the amendment, a combination of the simple and usufructuary mortgage was not governed by Section 98 and it was in these circumstances that the expression was used in those decisions. The expression appears to have been used in respect of mortgages executed after the amendment of 1929 in some of the decisions merely because decisions given prior to the amendment, as to what were rights and liabilities of a mortgagor and mortgagee of a transaction, which was a combination of simple and usufructuary mortgage, were cited and relied one Such transactions are also now covered by the definition of anomalous mortgage in Section 58 of the Transfer of Property Act and Section 98 of the Act does apply to them.
7. The question whether in the instant case a mortgage decree could be granted or not may better at first be discussed, authorities apart, with reference to the provisions of the Transfer of Property Act. It is proposed to examine this question on the assumption that the transaction of mortgage on the basis of which the present suit was instituted is a case of an anomalous mortgage and not a simple mortgage. According to Section 98 of the Transfer of Property Act, rights and liabilities of parties to such a mortgage are to “be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.”
It is Section 67 of the Transfer of Property Act which, in general, confers a right on the mortgagees to obtain from the court a decree that the mortgaged property be sold. It was contended by Mr. Kanhaiyaji that as there is no express covenant in the mortgage deed (Ext. 3) that the mortgagee shall have a right to realise his amount by sale of the property mortgaged, in case it was held to be a transaction of anomalous mortgage, the mortgagee could not call to his aid the general provisions of Section 67. Before discussing this argument further, it may be stated that there are four clauses in Section 67 of the Transfer of Property Act dealing with what this section shall not be deemed to have authorised any mortgagee, a mortgagor who holds the mortgagee’s right as a trustee or legal representative and a person interested in part only of the mortgage money. None of these clauses debar an anomalous mortgagee from obtaining a decree from the court that the mortgaged property be sold. Of these clauses, Clause (a) which runs as follows is very pertinent to the question under examination ;-
“to authorize any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is is entitled to foreclose to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale”
This clause specifically debars a mortgagee under an anomalous mortgage by the terms of which he is not entitled to foreclose, to institute a suit for foreclosure, but there is no such bar on a mortgagee under anomalous mortgage in respect of instituting a suit for sale. The expression “mortgagee” in the main clause of the section appears to have been used in general and there can be no doubt that it does include an anomalous mortgagee as well. The question therefore, that arises for decision in this connection is whether the right to obtain from the court a decree that the mortgaged property be sold, which is conferred by Section 67 on an anomalous mortgagee as well, cannot be availed of by him when there is no stipulation to that effect in the mortgage deed, because of the language of Section 98 that his rights and liabilities are to be determined by the contract as evidenced in the mortgage deed. The language of Section 67 itself provides an answer to the question The section starts with the words “In the absence of a contract to the contrary” There-1 fore, an anomalous mortgagee can be debarred from availing of this right only when there is a stipulation in the mortgage deed that he cannot obtain such a decree. If the mortgage deed is silent and does not contain a stipulation either way as is the case before us, an anomalous mortgagee is entitled to avail of the right conferred upon him by Section 67. The provisions of Section 67 of the Transfer of Property Act do not conflict with those of Section 98 inasmuch as there is nothing in Section 98 to indicate that it is not subject to other provisions of the Act. Provisions of one section of the same Act cannot be used to defeat those of another unless it is impossible to effect a reconciliation between them. If there is a stipulation to the contrary in the mortgage deed either express or which can be necessarily inferred from the document read as a whole, an anomalous mortgagee cannot obtain a decree for sale of the property mortgaged, because the rights conferred by Section 67 are subject to a contract to the contrary. But in case there is no such stipulation, express or by necessary implication as it is in the instant case, there being no contract between the parties to the transaction to the contrary, an anomalous mortgagee is entitled to obtain from the court, a decree that the mortgaged property be sold.
8. It is now proposed to examine some of the authorities which may throw light on the question discussed in the preceding paragraph. Reference may be made first to a Bench decision of this Court in the case of Chand Bihari Gope v. Shyam Nandan Pra-sad, ILR 38 Pat 35 : (AIR 1959 Pat 235). It was a case of an anomalous mortgage with no stipulation either way and the question
which arost for consideration was whether provisions of Section 68 of the Transfer of property Act could be applied. Their Lordships held that the provisions did apply and further observed that the section would have been applicable even if there was a contract to the contrary in the mortgage bond, because Section 68 confers a statutory right which must prevail upon the stipulation in the deed. According to their Lordships, there was no conflict in the provisions of Section 68 and Section 98 of the Act. It may, however, be pointed out that a Bench decision of the Calcutta High Court in the case of Gajadhar Agarwalla v. Sibananda Predhani AIR 1924 Cal 592, was cited before their Lordships and it was contended that, inasmuch as it was held in that case that Section 67 of the Transfer of Property Act did not apply to the transaction of anomalous mortgage, which their Lordships were considering, Section 68 too could not apply Kanhaiva Singh. J. who delivered the judgment in Chand Bihari Cope’s case, ILR 38 Pat 35 : (AIR 1959 Pat 235), distinguished this case on the simple ground that while Section 67 starts with the words “In the absence of a contract to the contrary” there were no such words in Section 68.
It, therefore, becomes necessary to examine the decision in the case of Gajadhar Agarwalla, AIR 1924 Cal 592. in a little detail The main decision was by Rankin, J. and deserves greatest respect. This was also a case of an anomalous mortgage. According to the terms of the deed, the mortgagee was to enter into possession for eight years from the date of the loan but was required to relinquish possession if within the said period he was paid off, The document further provided that on mortgagor’s failing to discharge the total claim for principal and interest due upon the bond, the mortgagee would be entitled, with the aid of the Civil Court, to recover the total amount of principal and interest by selling up the property mortgaged as well as other properties of the mortgagors. To put in the very words of Rankin, J. “It is perfectly plain to his Lordships “that the provision for enforcement by sale of the mortgaged property comes into effect only after the expiration of eight years” and according to his Lordship as well as Page. J., who agreed with him entirely, this stipulation could not be enforced at the time the suit was instituted. It was also contended before their Lordships that apart from the terms in the mortgage deed the mortgagors could get a decree for sale by virtue of Section 67 of the Transfer of Property Act Rankin, J. while dealing with that contention said that though the question was not easy it was unsafe, to say the least, to rely upon Section 67 at all At another place he observed “How far the rights of the parties in the circumstances’ are intended to extend must in any possible case, apart from section 98, be controlled by the construction of the document. Section 98 makes it extremely difficult in a case which is not a mere combination of recognised types to apply Section 67 at all”
This decision cannot be interpreted as a decision in general that Section 67 of the Transfer of Property Act would not apply to anomalous mortgages. This is manifest from the use of the expression “in the circumstances” in the passage quoted above which has been underlined (here in ‘ ‘) by me. It followed from the terms of the deed by necessary implication that no decree for sale in respect of the mortgaged property could be obtained before the expiry of eight years from the date of the loan and thus there was a contract to the contrary in the document rendering provisions of Section 67 of the Transfer of Property Act inapplicable to the transaction. It cannot be said that general provisions of the Transfer of Property Act were not at all applicable to the cases of mortgages covered by Section 98 of the Transfer of Property Act before the amendment of 1929.
In the case of Mohammad Sher Khan v. Raja Seth Swami Dayal, AIR 1922 P.C. 17, their Lordships of the Judicial Committee laid down that the provision as to redemption contained in Section 60 of the Transfer of Property Act did apply to transactions which, according to Section 98 of the Act, as it then stood, were to be governed by terms of the contract between that parties as evidenced in the mortgage deed This decision of the Judicial Committee was not brought to the notice of their Lordships of the Calcutta High Court in Gajadhar Agarwalla’s case, AIR 1924 Cal 592. It is hard to believe that Rankin. J. was not aware of this decision of the Judicial Committee, but it may be that in view of the terms of the mortgage deed he did not consider it necessary to refer to it. The Judicial Committee’s decision in Mohammad Sher Khan’s case. AIR 1922 PC 17, was relied on by Kanhaiya Singh, J in Chand Bihari Gope’s case AIR 1959 Pat 235.
9. Whatever doubts there might have been as to the application of sections 67 and 68 of the Transfer of Property Act to cases of mortgages, which, according to Section 98, were to be governed by the terms of contract as evidenced by the deed before the amendment of 1929, after the amendment of Section 58 in the said year, incorporating in it “anomalous mortgage” as a specific class of mortgages and defining it there can be no scope for entertaining those doubts any further as to the applicability of the general provisions of the Act governing the rights and liabilities of the mortgagors and mortgagees, including Sections 67 and 68, to mortgages which are now included in the class “anomalous mortgages.” Prior to the amendment of 1929 a class of mortgages was known as “simple mortgage
usufructuary” and it was settled law that in appropriate cases provisions of sections 67 and 68 would apply to this class of mortgages. This class of mortgages is now also included in the class “anomalous mortgage” and it cannot be thought of that the intention of the amendment was to deprive mortgagees and mortgagors, of that class of mortgages of the benefits of Sections 67 and 68.
Post-amendment decisions do support this view and one of them is Chand Bihari Gope’s case, AIR 1959 Pat 235 which has already been discussed above. In the case of Ujagar Lal v. Lokendra Singh, AIR 1941 All 169, it was held with reference to the provisions of Sections 58 and 67 of the Transfer of Property Act that the remedy by way of foreclosure is not exclusive to a mortgage by a conditional sale but it is equally applicable to an anomalous mortgage. The case which is more to the point is that of Ramakkammal v. C. G. Subbarathnam Iyer, ILR (1952) Mad 993 (AIR 1953 Mad 13). The appeal arose out of a suit for preliminary mortgage decree which was granted by the trial court in a suit which was instituted on 19th of July, 1944. The plaintiff claimed that he was entitled to realise the amount due to him by sale of the mortgaged property and he also claimed a personal decree for the balance in case the proceeds of sale were not sufficient to satisfy the decree The facts of the case on which the plaintiff based his claim as set out in the judgment of Satva-narayana Rao. J., in order to appreciate the decision, may better be reproduced.
“On 20th February 1939, the first defendant executed a deed which is described as a usufructuary mortgage deed for a sum of Rs. 4000 The property comprised in the mortgage is a terraced building in Coimbatore Under this document it was stipulated that the mortgagee should in lieu of interest on the amount advanced enjoy the propertv mentioned, that is, the house, as under a usufructuary mortgage. It further provided that. ‘Within a period of four years from this date I shall pay you the above usufructuarv mortgage amount and get return of the deed with endorsement of discharge thereon and alone with the title deeds pertaining thereto I shall also take possession of the undermentioned properties from you. If before the above period of four years I pay the principal sum you shall receive it If I fail to pay the principal sum on the due date of the above four years you shall continue to be in enjoyment as under a unsfructuary mortgage for the very aforesaid mortgage amount till it is paid. Besides. I shall pay the above amount on demand with interest thereon at the rate of four annas per hundred rupees per mensem from the date of default to the date of payment’. The deed also recites that the mortgagee wai nut in possession of the property immediately, that is, on the date of the execution of the deed. On that very day, the plaintiff leased the property under a rental agreement to one Ramaswami Mudaliar who is examined in the case as P. W. 1 and the lesser agreed to pay a rent of Rs. 30 per mensem for the terraced building and he also stated in the rental agreement Exhibit P-2, that he was put in possession of the property. The plaintiff alleged in the plaint that notwithstanding the recitals in the documents above referred to, the first defendant failed to deliver possession of the property to the plaintiff or to his nominee and that she had continued in possession without even paving any sum by way of rent or damages for use and occupation. On 3rd April, 1943 the first defendant sold the property to defendants 2 to 4 under Ext. D-7 and they are impleaded as parties to the action. The plaintiff therefore, seeks to recover from the defendants and the property, a sum of Rs. 5,949 Rs. 4.000 being the principal amount due under the mortgage and Rs. 1,949, as compensation for loss of possession from the date of the mortgage to the date of suit at Rs. 30 per mensem or Rs. 360 per annum .”
The trial court had held the transaction to be an usufructuary mortgage and not an anomalous mortgage but at the same time in view of the Full Bench decision in the case of Subbamma v. Naravya, ILR 41 Mad 259 : (AIR 1919 Mad 1164) (FB) oassed a decree for sale After referring a large number of authorities, their Lordships held that it was an anomalous mortgage but confirmed the decree and dismissed the appeal. The reasons given by their Lordships for the decision have correctly been summarised in the headnote as follows:
”Under the law as it stood before the Transfer of Propertv Act was amended in 1929, the mortgage would be a simple usufructuary mortgage and not an anomalous mortgage; under Section 68 (1) (c) of the old Act the mortgagee could sue for the mortgage money, and would be entitled to decree for sale under section 87 of that Act, Under the new law the definition of “anomalous mortgage” is transferred with modifications to Section 58 (g) of the new Act As that definition does not expressly exclude the combination of simple and usufructuary mortgage such a mortgage would be an anomalous mortgage under the present law The result would, however, be the same whether under the old or the new law. As anomalous mortgages are now included in Section 58 of the Act the application of Sections 67 and 68 of the Act to anomalous mortgages is not excluded as under the old law .”
Reference may be made here to a decision of the Punjab High Court in the case of Sant Ram Lalji Ram v. Bhagwat Dass AIR 195P Punj 309 The headnote of the case gives an impression that no decree for sale can be passed in the cast of anomalous mortgage The appeal was against a preliminary decree for sale on the basis of a mortgage passed by the lower court and it was contended by appellant’s counsel that as the mortgage was anomalous one, such a decree could not be passed. On construction of the terms of the deed, their Lordships firstly held that the mortgage was a simple mortgage and so a decree for sale could be passed. Then they held that, even according to the stipulations of the deed, the mortgagor was entitled to a decree -for sale and therefore, even if the document was an anomalous mortgage the decree could not be set aside. There is no discussion at all in the judgment whether Section 67 of the Transfer of Property Act could apply if the transaction of mortgage was an anomalous one and the deed contained no stipulation either way for a decree for sale This decision, therefore, is not of any real assistance on the point under consideration. According to the decision in Umeshwar Prasad Sinha’s case, AIR 1944 Pat 5 a Bench decision of this Court already discussed earlier at two places, in similar circumstances a decree for realisation of the mortgage money, by sale of the mortgaged property, could be passed. There is much similarity in the facts of that case and the case before us and on the authority of that case alone, which is binding on us, it has to be held that the decree for sale passed by the courts below is iustified. The decisions, therefore, also do support the view taken earlier that Section 67 of the Transfer of Property Act is applicable to the instant case.
10. There was some discussion at the bar, if the mortgage was an usufructuary one, whether there was a covenant to pay by the mortgagor, in the mortgage deed under consideration, which would entitle the mortgagee to sue for his mortgage money under Sub-section (1) (a) of Section 68 and whether a decree for sale could be passed on the basis of such a covenant Some decisions, including the one of Judicial Committee in the case of Ramnarain Singh v. Adhindra Nath Mukherji. AIR 1916 P.C. 119, where on the terms of the mortgage it was held that having regard tithe nature of document and its terms any personal liability on the Dart of the mortgagor was excluded but at the same time, observed that in considering the question of the personal liability on a mortgagor it must be borne in mind that a loan prima facie involves such a personal liability, were cited Since it has been held that the deed under consideration is not one of usufructuary mortgage, it is not necessary to refer to those decisions and examine them.
11. For the foregoing reasons, there appears no merit in the appeal and no substance in any of the points raised by learned counsel for the appellant. The appeal is accordingly dismissed with costs.
Ramratna Singh, J.
11A. I agree, but I would like to add something in respect of the claim for a decree for sale. The relevant terms of the mortgage bond in suit dated 9-8-1950 are as follows;
(1) The executants mortgaged the properties on getting the rehan money. Rupees 4000/- for a term of three years ending on the 8th August, 1953.
(2) The mortgagee should enter into and remain in possession and occupation of the mortgaged property and appropriate its income in lieu of interest till the payment of the rehan money.
(3) In case the rehan money is not paid on the due date, the aforesaid stipulation wilt precisely remain intact and in force till the payment of the rehan money.
(4) The mortgaged properties, that is, the houses are being taken on rent by the mortgagors at an annual rent of Rs. 480/-a year (that is, Rs. 40/- a month) for which a separate deed has been executed and the arrears of rent shall be paid before the repayment of the rehan money.
(5) The executants have assured the aforesaid rehandar that the mortgaged properties are free from all sorts of encumbrance, flaws and defects in title. If things are found contrary to it and the claimant is dispossessed from the mortgaged property or if she has to pay any dues, in such case the claimant will be entitled to realise the entire amount paid with interest at the rate of 1 per cent per month from the person and property-movable and immove-able, nami and behami of the executants. The houses only constituted the mortgaged property
12. It is admitted that the plaintiff-mortgagee never came into possession of the mortgaged house and the mortgagots (D1 and D2) who continued to be in possession paid rent of Rs. 40 a month to the plaintiff up to January 1953 but thereafter neither the principal mortgage money nor the rent was paid by the mortgagors or the subsequent transferees, namely D3, D4 and D5 The recitals in the mortgage bond and the admitted facts are sufficient to show that the mortgage and the lease back 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 (see ATR 1927 PC 32 and AIR 1955 Pat 357).
13. It is well settled that the failure of the mortgagor-tenant to pay rent in lieu of interest to the mortgagee–landlord amounts to disturbance of possession of the mortgagee within the meaning of Clause (d) of Section 68 of the Transfer of Property Act. as amended in 1929 (see, for instance, Hiralal v. Ghasitu. (1894) ILR 16 All 318 (FB) and Shivajee Prasad v. Darshan Das. AIR 1963 Pat 87. and the mortgagee can, therefore, sue the mortgagor and his transferees for the mortgage money. This is the
legal position, if the mortgage in suit be treated as usufructuary mortgage. If, however, it be an anomalous mortgage, being a combination of a simple mortgage and a usufructuary mortgage–see Section 58 (g) of the Transfer of Property Act–the rights and liabilities of the parties would be governed by their contract as evidence in the mortgage bond and so far as such contract does not extend by local usage (see Section 98) In other words, if the contract or a local usage provides for some of the rights and liabilities of the parties but not for all, then the provisions of the Transfer of Property Act will govern the rights and liabilities, under the anomalous mortgage on all those matters for which no provision is made by the contract or local usage A distinction has, however, to be made between the those sections of the Transfer of Property Act, which lay down the rights and liabilities absolutely (e.g. Section 68), and those which define the rights and liabilities only “in the absence if a contract to the contrary “(e.g. Section 67) see AIR 1922 P.C. 17 : 49 Ind APP 60 Hence, Section 98 is subject to Section 68 (see ILR 38 Pat 35 (AIR 1959 Pa1 235)) and after dispossession from the mortgaged property, even a simple-cum-usufruotuary mortgagee can sue for the mortgage money under Section 68. Clause (c) or (d) He can also get a decree for sale under Section 67 unless there be anything to the contrary in the mortgage deed, because only usufructuary mortgagee as such or a mortgager by conditional sale as such cannot sue for sale of the mortgaged property.
14. The main contention of Mr. Kanhaiyaji was that no decree for sale could be passed in the instant case He conceded that, in view of the terms of the mortgage bond in suit and other admitted facts, it is not the case of purr usufructuary mortgage. It has been found earlier that the rent payable under the lease back was in lien of interest payable for the mortgage money According to Section 58 (b) of the Act, it 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 right to cause the mortgaged property to be sold ” In Shiva Prasad v. Beni Madhah 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. Bahadw Ram, (1912) 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 ”
15. In ILR 44 Cal 388 : AIR 1916 P.C. 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 this decision, personal liability arises in the instant case, because of the admitted fact that possession of the property was not given to the mortgagee. Moreover. Clause (5) of the bond in suit also created a personal liability Hence, the first two conditions of a simple mortgage are fulfilled in the present case and the mortgage in question is a combination of both simple and usufructuary mortgages
16. The next question is whether there is any clause in the bond in suit which might bar the application of Section 67 of the Transfer of Property Act to this case. At the first sight Clause (3) thereof, which provides for the continuance of the rehan on the same terms, even after the due date, up to the date of repayment of the mortgage dues, may be said to be such a bar; but this inference cannot be justified, in view of the admitted fact that the mortgagee was not put in possession of the property as also by Clause (5) of the bond. Hence Section 67 does apply to this case and in support of this view, it will be sufficient to refer to two decisions.
17. In Kanhaiya Prasad v. Mt. Hamidan, AIR 1938 All 418 (FB), it was held by a Full Bench of the Allahabad High Court that, where a mortgage comprises the features of both simple mortgage and usufructuary mortgage and the mortgagor deprives the mortgagee of a Dart of his security by failing to deliver up possession, Section 68(c) applies and the mortgagee has a right to sue for the mortgage money and the mortgagee is entitled under Section 67 to a decree for sale of the mortgaaed property In arriving at this decision, their Lordships relied on a decision of the Privy Council in Narsingh Partab v. Mohammad Yaqub 56 Ind App 299 = (AIR 1929 PC 139) That, was also a case of a mixed simple-usufructuary mortgage, which is included in the definition of “anomalous mortgage,” after the amendment of the Transfer of Property Aft in 1929 The mortgage loan was duly advanced, but the mortgagors failed to deliver possession of the mortgaged property Thereafter, the mortgagees sued to realise the sum due by sale or for a money decree It was held by the Privy Council that the money had become payable under Section 68 by reason of the failure to give possession and that, if the money had become payable under Section 68, then under Section 67 a decree for sale could be made.
18. Mr. Kanhaiyaji, however, relied on the case of Shibnarain v. Ramautar, AIR 1956 Pat 312 in support of his argument that only a money decree for the dues under the bond in suit could be passed in favour of the mortgagee. But that was a case of a pure usufructuary mortgage. Of course, in that case too the mortgagors did not deliver possession of the property to the mortgagee; but it was a part of the contract that the mortgagor shall go into possession of the mortgaged property and apply the usufruct thereof towards the interest. In the instant case, however, on account of the lease back, the term in the bond regarding delivery of possession of the property to the mortgagee was not to be given effect to. Hence, this is not a case of usufructuary mortgage but that of an anomalous mortgage. The decision in the case of Shibnarain, AIR 1956 Pat 312 is therefore distinguishable.
19. In view of the foregoing discussions,
the plaintiff (respondent No. 1) is entitled to
a simple mortgage decree for sale.