JUDGMENT 1. There two second appeals are respectively by the defendants (66/56) and by the plaintiffs (58/56) from the judgment and decree of the first appellate Court upholding the decree for ejectment and rent-arrears, in respect of two houses rented by the defendants from the plaintiffs on the strength of rent notes dated respectively the 7th November, 1939 and the 14th August 1940. These houses had originally been in the ownership and possession of the defendants themselves, but had been mortgaged with possession (rehan bil kabj) to the plaintiffs on the same dates on which the rent notes were executed, there also being a cross-reference in either document to the other in respect of the same house. The defendants had throughout contended that there was really no landlord-tenant relationship, the arrangement of a mortgage-cum-please back on rent reserved being merely a device to secure more effective payment of the interest so that the suit for rent and ejectment did not lie, "being a contravention of the provisions of Order 34 Rule 14." In addition, even within the frame-work of a suit for ejectment and rent, the defendants pleaded that there had been no notice as required under the Gwalior Transfer of Property Act (under a provision corresponding to Section 106 the Indian Transfer of Property Act) and further, that part of the claim was time-barred; and thirdly the money claimed being essentially one for interest, it should be scaled down in accordance with the Madhya Bharat Interest Act of 1954. 2. Apart from the other questions which are of very little significance as will presently appear, the crucial issue in the main appeal by the defendant (66 of 1956) is, whether the agreements in regard to the two houses, respectively of 7-11-1939 and 14-8-1940 should be treated as being really separate ones in the eyes of law, the first, mortgage with possession given by the mortgagors (defendants) to the mortgagee (plaintiff), and then a lease based on the rent-note by which the mortgagor became the tenant from the mortgagee who had, at any rate, notionally got into possession. This practice appears to be very common all over the country as the same question bas come up from time to time before different High Courts which have taken somewhat conflicting views. This practice appears to be very common all over the country as the same question bas come up from time to time before different High Courts which have taken somewhat conflicting views. (a) One view is that the so called usufructuary mortgage and the lease of the same property by the mortgagee to the mortgagor really constitute "a single transaction" and consequently a single agreement, the effect being of nothing more than a simple mortgage with Interest described as rent, and often at a rate higher than that permitted by law. There is no landlord-tenant relationship and no suit can be brought on that basis either for the ejectment or for the rent as such, A logical consequence would be that in event of a suit being brought for the so called rent, which is really interest, the mortgagee will be barred under O. 2 R. 2 from suing later on for the principal itself. However, some of the Courts, though of the view that it is single agreement, have hesitated to go so far. At all events, there would be a case for searing down of the so-called rent (if it is to be granted at all) in conformity with the law in force in that State fixing rates of interest. (b) The other view is that these two are Independent agreement in the eyes of law, there is a usufructuary-mortgage with all its incidents and there is also a separate landlord-tenant relationship on the strength of which a claim for rent and for ejectment can be made. There will be no scaling down even though the rent reserved is higher than what the interest could be under the interest law in force in the State concerned. (c) In addition, some of the High Courts have tried to apply the principles contained in Order 34 Rule 14, not merely to the attempt to execute a decree for the rent by attaching the equity of redemption of that very property, but also by anticipating to the suit itself for the rent which is just a money suit, and has necessarily nothing to do with the suit. 3. In the present case, it is clear that even at the time the parties created the mortgage, they were fully aware of the possibility of there being a lease by the mortgagee to the mortgagor. 3. In the present case, it is clear that even at the time the parties created the mortgage, they were fully aware of the possibility of there being a lease by the mortgagee to the mortgagor. In fact the mortgage deeds expressly refer to the leases in contemplation. Further, the rent of Rs.9/10/- per month in one cast and Rs.6/14/- per month in the other, have also been worked out on what can be called a notional rate of interest. The principal on the first mortgage was Rs.1400/- and on the second Rs.1000/- and rent has been treated as equivalent to interest at the rate of 11 annas percent per month. The question is; Do the parties really mean "interest" though they call it "rent", or are they really fixing the rent, properly so called, using as a yardstick the same time, the interest which they would have considered reasonable in case it was payable. In this case, we have all the conditions tinder which the view (a) has been held to be appropriate by one school of thought on this problem. 4. The mortgagor-tenant-appellant in the main appeal (66 of 1956) who resisted the suit on the ground that it was not maintainable, has cited on this behalf the Patna decisions Nanekeshwar Prasad Vs. Nand Gopal Ram, AIR 1943 Patna 282; Umeshwar Prasad Vs. Dwalka Prasad AIR 1944 Patna 5; Baijnath Prasad Vs. Jang Bahadur Singh, AIR 1955 Patna 357; Ramnarain Pasi Vs. Sukhi Tiwary, AIR 1957 Patna 24, and the Bombay decision contained in Harilal Bhagwanji Vs. Shastri Hemshankor, AIR 1958 Bombay 8. The plaintiff mortgagee-landlord as against it relied primarily on the Privy Council decisions reported in Abdullah Khan Vs. Basharat Hussain, ILR 35 Allahabad 48; Feroz Shah Vs. Sohbat Khan, AIR 1933 Privy Council 178; Abdul Khadir Vs. Subramanya Pattar, AIR 1940 Madras 946; K. Naraynah Nair Vs. A. Kunhan Mannodiar, AIR 1949 Madras 127; Kuttyal Vs. P. Sanjiva Rao, AIR 1942 Madras 877; Venkappa Bhatta Vs. Gangadhara Bhatta, AIR 1959 Kerala 112; and finally the principles contained in Ganga Prasad Vs. Yadavrao, 1955 MBLJ 39; Laxmandas Vs. Hoshiyabai, 1955 MBLJ 1250 and Iqrar Ahmed Vs. Halkey, 1958 JLJ 788 . 5. All the rulings whether cited by this or the other party, apply the accepted principles of interpretation that all the circumstances should be examined. Gangadhara Bhatta, AIR 1959 Kerala 112; and finally the principles contained in Ganga Prasad Vs. Yadavrao, 1955 MBLJ 39; Laxmandas Vs. Hoshiyabai, 1955 MBLJ 1250 and Iqrar Ahmed Vs. Halkey, 1958 JLJ 788 . 5. All the rulings whether cited by this or the other party, apply the accepted principles of interpretation that all the circumstances should be examined. Then they go to the next stage of considering whether or not the mortgage with possession on the one hand and the lease with rent reserved on the other, constitute one transaction or two. That they are simultaneous or nearly so; that there is a cross-reference to one in the other, and that the mortgage-deed itself mentions the intention that the mortgaged property should forthwith be leased to the mortgagor himself are some of the criteria applied to justify the finding that they constitute a single transaction. It is at this stage that the two schools of thought depart. Once they constitute a single transaction, one school infers (though it is not clear why) that there was no intention, on the one hand, to give possession to the mortgagee and on the other, to put back the mortgagor as a lessee. At best, it is a device to assure that interest would be paid regularly and, may be a device to extort interest at a rate higher than the maximum allowed by law on simple mortgagee. The other school of thought does not follow this line. Even on the assumption that they constitute a single transaction it is possible to separate the two different liabilities and two different relations which are not mutually exclusive. Another difference between them is in regard to the stage at which the protection given to the mortgagor by Order 34 rule 14 commences to operate. 6. The system of giving usufructuary mortgage and following it up with a lease by the mortgagee to the mortgagor is not only very common, but seems to a be fairly old practice. In Imdad Hasan Khan Vs. Badri Prasad, ILR 20 Allahabad 401 the transaction was of 1871 and the usufructuary mortgage and the lease, though not of the same date, were registered simultaneously, and were meant to operate from the same point of time. In Imdad Hasan Khan Vs. Badri Prasad, ILR 20 Allahabad 401 the transaction was of 1871 and the usufructuary mortgage and the lease, though not of the same date, were registered simultaneously, and were meant to operate from the same point of time. There also, the interest was the yardstick upon which the rent was calculated and the deeds which as often happens in our country had not been drafted with the technical precision common in England contained the words 'mortgagee' and 'lessor' in discriminately. The High Curt remarked- "If the transaction had been one of a lease independent of the mortgage the rent reserved by the lease would not have been calculated with reference to the amount of the mortgage and it would not have been made liable to reduction proportionately to the reduction that might take place in that amount." A special feature of that transaction which is not reproduced in the instant one is that the lease could not be surrendered so long as the mortgage subsisted. From this, the High Court concluded that the arrears of leass-money must be deemed to be arrears of interest. Accordingly a claim for rent was treated as a claim for interest. 7. Substantially, the same principles have been applied in the Patna rulings: for example, in AIR 1955 Patna 357 (supra)- "The Kirayanama was merely a device for regular payment of interest on the mortgage money and not a lease of the property. The mortgagor could not be deemed to be a tenant of the mortgage and the latter was not entitled to file an application for eviction". As the earlier Patna decisions have been reviewed in this judgment, it is unnecessary to discuss them at any length. This has been followed in the subsequent Single Bench decision reported in AIR 1957 Patna 24 (supra). There, it was a suit for arrears of rent on the basis of the Kirayanama and it was held that- "It was intended by the parties that the mortgagee would not get possession, but would only get interest on the amount advanced by him in the shape of rent so long as the lease continues. Therefore, it is interest on mortgage money and not rent for use and occupation of the mortgaged property. Therefore, it is interest on mortgage money and not rent for use and occupation of the mortgaged property. There was no landlord-tenant relationship." However, on equitable grounds, the Court did, allow a sum at the statutory maximum rate of , 9 p.c.p.a., on the principal which was less than the amount claimed as rent: this was allowed not as rent properly so called, but as compensation to the plaintiff for the use and occupation of the house by the defendants; in this ruling order 34 rule 14 has also been discussed, though, with all respect, I feel that the stage had not and would not come till the money decree is actually sought to be executed by attachment and sale of the equity of redemption in the mortgaged properly itself. 8. In the Bombay case reported in AIR 1958 Bombay 8 (supra), it was held that the mortgage and the lease were part of one and the same transaction and therefore the passing of the rent-note was merely a device to ensure regular payment of interest, and no landlord-tenant relationship was intended to be created or actually created. The plaintiff was refused to relief of eviction. However, he was granted a decree for rent on the basis that it really represented interest repayable by the defendant. In substance, this judgment follows the Patna view but has discussed certain earlier Bombay decisions as well. 9. One obvious fallacy in the view of Patna and Bombay above is that they assume that simply because the mortgage and the lease form one transaction, it automatically follows that the two liabilities cannot co-exist. I fail to see why there shou1d be no usufructuary mortgage with notional possession given to mortgagee and subsequent lease by the mortgagee to the mortgagor, co-existing with equal validity. In fact, in the Privy Council decision reported in ILR 35 Allahabad 48 (supra) it is ruled: "'The mortgage and the lease were part of the same transaction; but there was no inconsistency between the two instruments; nor would there have been any inconsistency if the mortgage itself had contained a provision for granting a lease on terms upon which the lease was actually granted." The transaction in this case was before the coming into force of the Transfer of Property Act; but that makes no difference in regard to the question we are presently considering. 10. 10. This takes us to the consideration of the other view. In the Privy Council ruling reported in AIR 1933 Privy Council 179 (supra) the term of the lease had expired while the mortgage was subsisting and accordingly, the mortgagee-landlord sought to enter into possession and eject the tenant though he was also the mortgagor-owner. The defence was of the same pattern as in other cases of this type, that there was a single transaction and it accounted to a simple mortgage; a suit for ejectment on the strength of the rent-note did not lie. It was held:- "There was no reason to construe the mortgage &s other than a possessory mortgage as it clearly purported to be, and that the term of the lease having expired, the mortgagee was entitled to possession. Evidence to show that the mortgage was in reality a simple mortgage according to the intention of the parties was inadmissible under Section 92 of the Evidence Act and no presumption could be drawn from the previous transactions." In a similar case from Punjab Bakshi Ram Vs. Buta Singh, AIR 1957 Punjab 57, it was held- "The mortgage being one with possession the owner staying on after the rent-note in favour of the mortgagee, must be held to occupy the premises not in his capacity as owner, but in his capacity as a tenant of the person with whom the property was mortgaged." The same principle has been followed in a succession of decisions by the Madras High Court. For example in AIR 1940 Madras 946 (supra), the mortgagor was an agriculturist and on the theory that the claim was not for rent but for interest, he wanted it to be scaled down to conform with, the Madras agriculturists Relief Act (4 of 1938). This was refused- "Though the mortgage and the lease back can and must in a case of such kind, be taken to form part of the same transaction, effect must be given to each according to its terms. The Court could not by reading the two together, spell out a transaction totally different in character and incidence. The usufructuary mortgage accompanied by a lease back, could not be regarded as a simple mortgage." The same principles were followed in the later Madras cases. 11. The Court could not by reading the two together, spell out a transaction totally different in character and incidence. The usufructuary mortgage accompanied by a lease back, could not be regarded as a simple mortgage." The same principles were followed in the later Madras cases. 11. The same question came up in 1955 MBLJ 1250 (supra) in connection with a prayer by the mortgagor-lease defendant under order 2 Rule 2. The mortgagee-lessor obtained a decree for rent. Subsequently he brought a suit for the mortgage money. Now, the defendant-mortgagor pleaded the bar of Order 2 Rule 2 because the mortgagee had really recovered interest payable on the mortgage (though he called it rent payable on the lease). So, it was urged that the, should be deemed to have given up the claim for the mortgage money which was also payable under the same cause of action. It was held that there were two causes of action, one from each of the agreements even though both of them might be construed as constituting one transaction. In the later decision of the Madhya Pradesh High Court in 1958 JLJ 788 (supra) it was held that the claim for rent was really what it purported to be and not a claim for interest on a simple mortgage. Thus O.2, R.2 was held not to apply. 12. A second fallacy of the simple mortgage theory is, the assumption that by taking a usufructuary mortgage, entering into notional possession and forthwith giving the lease to the mortgagor for a rent which, if it had been interest might have exceeded the maximum proscribed by the law the mortgagee was scoring an unconscionable advantage over the mortgagor. That is not a safe assumption. Even if the mortgagee did get a higher return on his principal by leasing the property to the mortgagee than could have got by taking a simple mortgage, there is nothing wrong, unless it is pleaded and shown that one or the other of the agreement was had for policy undue influence or the like. Again, the mortgagee could secure the same rent from any person other than the mortgagor it might even be, he is giving a concession to the mortgagor and enabling him to stay on in his own house in another capacity. Nor is the arrangement all to the advantage of the mortgagee-lessor. Again, the mortgagee could secure the same rent from any person other than the mortgagor it might even be, he is giving a concession to the mortgagor and enabling him to stay on in his own house in another capacity. Nor is the arrangement all to the advantage of the mortgagee-lessor. Had it been interest he would have had the security on the property and a longer term of limitation. When it is rent he gets neither; it is a simple unsecured money claim with the term of limitation usual for money claim, that is three years under the Indian Limitation Act, and it happens in the present case, six years when the Gwalior Limitation Act was in force. It is, as it were a give and take between the parties to the two contracts whether we call the, from same transaction or two different transactions. The Patna and the Bombay High Courts, find this a device for prompt and punctual payment of what was really interest. Then they follow it up with a scaling down of the interest. This makes the lessor lose both ways. 13. In some of the rulings cited by the defendant Order 34 Rule 14 has been referred to. Some of them almost go to the extent of saying that the suit of the mortgagee-lessor for rent is barred by Order 34 Rule 14. This is to take the rule to a stage at which it does not at all begin to operate. That rule is certainly for the protection of the mortgagor and provides that- (1) 'Where a mortgagee has obtained a decree for the payment of money in satisfaction of a claim arising under the mortgage, he shall not be entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage, and he may institute such suit notwithstanding anything contained in Order 2 Rule 2." (2) "Nothing in sub-rule (1) shall apply to any territories to which the Transfer of Property Act, 1882, has not been extended." Before this begins to operate the mortgagee should already have obtained a decree, and put it into execution by attaching the mortgagor's equity of redemption in the mortgaged property. Then the executing Court should consider whether the decree had been obtained in satisfaction of a claim arising under the mortgage. Then the executing Court should consider whether the decree had been obtained in satisfaction of a claim arising under the mortgage. On the view taken here the decree would not have been obtained in satisfaction of a claim arising out of a mortgage; it would have been obtained for satisfaction of a claim adding out of a rent-deed. But that is not the main point at present. It is that the disability imposed on the mortgagee by Order 34 rule 14, is only in regard to executing his money decree in a particular manner. It places no disability on his bringing the suit that is to say, seeking to obtain a decree. There is nothing in this rule or in any section in the Transfer of Property Act justifying the assumption that this rule imposes a disability on the mortgagee to bring a suit on such a claim except by way of one bringing the mortgaged property to sale. 14. The result of the foregoing discussion is that - (i) it can be successfully contended that the usufructuary mortgage and the lease in circumstances, like those of the instant case, form, broadly speaking, one transaction. (ii) whether they constitute one transaction or not, the two liabilities created are not inconsistant or mutually exclusive, and can be pursued and enforced independently of each other; (iii) an arrangement like this does not amount to a simple mortgage; it is, in fact not open to either party in face of the two deeds to urge that put together, they form a contract with terms different from those mentioned in the one or the other; and: (iv) it is open to the mortgagee-landlord to bring a suit for eviction of the tenant and also for the arrears of rent which will be calculated and allowed as rent on the contract and the laws it any, applicable to rent (and not as interest like the Interest Act and similar statutes governing interest); and (v) Order 34 Rule 14 does not come in till the decree has been obtained, and the decree, holder seeks to execute it in a particular manner. 15. Besides the main contention the defendant appellant has tried to make the following grounds: (a) That the suit is had for insufficient notice. 15. Besides the main contention the defendant appellant has tried to make the following grounds: (a) That the suit is had for insufficient notice. It is to be remembered that when these tenancies were created, respectively in 1939 and 1940, the Gwalior Transfer of Property Act had not come into force. Certainly some years later, there was such a law in force in Gwalior State bared substantially on the Indian Transfer of Property Act, containing provisions analogous to section 106 of the Transfer of Property Act; but it can have no retrospective effect. (b) That the claim for rent for the period before 1945 is barred by limitation: What had happened in this case was that the parties settled accounts and on 8-10-1945 the accounts were stated and money bond was passed by the defendant for Rs.932/- on account of the arrears of rent for the two houses upto 7-11-1939. The suit was brought on 19-11-1943 The defendant has assumed, wrongly that limitation in the Gwalior State during the relevant period for such money claims was three years as under the Indian Limitation Act which came into force subsequently. Actually, it was for six years. (c) That at all events, the interest should have been scaled down to conform with the Madhya Bharat Interest Act which has retrospective effect. To be sure, the rent has been arrived at on the basis that it should equate the interest at 11 annas and future interest on arrears has also to be calculated at this rate. Had the transaction been a simple mortgage, interest should have been allowed only at 6 p.c.p.a. that is, 8 annas and not at 11 annas. But for reasons already discussed, this does not arise. 16. The result is that the main appeal (No. 66 of 56) by the defendant is dismissed with costs and pleaders fee according to rule, payable by the defendant-appellant to the plaintiff-respondent. 17. The cross-appeal can be disposed of very briefly. But for reasons already discussed, this does not arise. 16. The result is that the main appeal (No. 66 of 56) by the defendant is dismissed with costs and pleaders fee according to rule, payable by the defendant-appellant to the plaintiff-respondent. 17. The cross-appeal can be disposed of very briefly. Besides supporting the decision of the lower Courts the plaintiff-appellant in appeal No. 53 of 1956 has urged that he was entitled to-(i) mesne profits from the date of the suit till the date on which he gets possession; (ii) interest from the date of the suit to the date of decree on the rent already allowed; and (iii) a decree mentioning the legal representatives who had already been brought on record and not the original defendant Champalal. 18. The prayer (iii) is for the correction of a clerical mistake and there is no objection to granting in. The two other prayers for mesne profits and for interest after the filing of the suit arise naturally our, of the claim that has been allowed. I am inclined to hold that it was only by oversight that these have not been granted. Thus the second appeal No. 53 of 1956 is allowed and it is directed that the plaintiff should get mesne profits from the date of the suit till his getting possession of the houses at a rate equal to the agreed rent. It is also ordered that he should be given interest from the date of the suit till the date of decree at 6 p.c.p.a. Future interest has already been provided in the decree of the lower Courts. No costs for either party in the cross-appeal.