Satya Narain Prasad v. Adya Prasad Singh — 1971 DIGILAW 165 (PAT)

Judgment Shambhu Prasad Singh, J. 1. This appeal by the defendant is directed against a preliminary decree for sale in a mortgage suit. 2. On 21st July, 1949, the appellant executed a Rehan deed (Ext. 2) for Rs. 6,000 (six thousand) in favour of the plaintiff respondent. The deed was for one year expiring on 30th of Baisakh 1357 Fs. equivalent to 13th May, 1950. It was stipulated that the mortgagor would be entitled to redeem the mortgage by payment of the entire mortgage money on the said date or at the end of the month of Baisakh of any of the years following. On 25th July, 1949, the appellant executed another document known as Hunda in favour of the respondent. The term of this Hunda was also to expire on the 13th May, 1950 and the appellant was to pay a sum of Rs. 720 as rent to the respondent for his possession of the mortgaged property during that period. The appellant paid Hunda rent up to 1360 Fs. After he fell in arrears in respect of 1361 and 1362 Fs. the respondent instituted a suit against the appellant for recovery of the Hunda rent of the aforesaid two years. Both the courts below took the view that the Rehan and the Hunda formed part of the same transaction and as such no decree for rent could be passed but they granted a decree for interest @ 9% per annum, that is to say, Rs. 540 per year on the principal sum of Rs. 6,000 in favour of the respondent. The appellant then preferred a second appeal. It was numbered as 757 of 1959. The appeal was allowed on the ground that the suit for realisation of Hunda rent was not maintainable and the decree passed by the courts below on the footing that the decree for realisation of interest only could be passed was baa. Thereafter the respondent instituted the present suit claiming a mortgage decree for Rs. 10,838, 6,000 being the principal, and 4838 interest from 1361 Fs. till the date of the institution of the suit @ 9% per annum with a direction for sale of the mortgage property for realisation of the said decree. In the alternative the respondent also claimed relief for recovery of Khas possession over the mortgaged land together with the past and future mesne profits. till the date of the institution of the suit @ 9% per annum with a direction for sale of the mortgage property for realisation of the said decree. In the alternative the respondent also claimed relief for recovery of Khas possession over the mortgaged land together with the past and future mesne profits. According to the respondent the transaction in question was a casual advance made by him to accommodate his friend, the appellant. 3. The appellant in his written Statement admitted the advance of the money to him on the basis of exhibit 2, but his defence was that the suit was not maintainable being barred under the provisions of Sec. 4 of the Bihar Money Lenders Act and by the law of limitation. He denied that he was a friend of the appellant and the transaction in question was a casual advance by the respondent to accommodate him. According to him the respondent was a professional money lender and had no money lending licence on the date of the advance. The money was not advanced by the respondent but by the joint family of which Ambika Singh, the father of the respondent was the Karta and as he was not made a party to the suit it was bad for his non-joinder. He claimed that the suit was barred under the provisions of Order 2, Rule 2 of the Code of Civil Procedure. His case further was that out of the mortgaged money a sum of Rs. 3,500 was adjusted towards the consideration of a sale deed, exhibit "1" dated the 10th of August, 1951, which he and his wife executed in favour of the joint family in the name of the son of the respondent and that he further paid in cash Rs. 612/8/- and Rs. 65 on two different occasions to the father of the respondent. A schedule was appended to the written statement, according to which only a sum of Rs. 3698/14/- was due from the appellant on the basis of the mortgage deed. 4. The Court below held that there was no separation between the respondent and his father and the father of the respondent was the Karta of the joint family but it further found that the amount of loan under Rehan deed was advanced by the respondent and the loan had nothing to do with the joint family. 4. The Court below held that there was no separation between the respondent and his father and the father of the respondent was the Karta of the joint family but it further found that the amount of loan under Rehan deed was advanced by the respondent and the loan had nothing to do with the joint family. It accepted the case of the respondent that the loan advanced was a casual one and as such the suit for its realisation was not hit by Sec. 4 of the Bihar Money Lenders Act. It also negatived the pleas of payment, bar under Order 2, Rule 2 of the Code of Civil Procedure and the limitation set up by the appellant. It accordingly decreed the suit for the principal amount with interest @ 9% per annum from the date of the execution of the Zarpeshgi deed till the date of the preliminary decree. It further directed that there would be no order for future interest. 5. In the appeal, the appellant has challenged the findings of the Court below, which are against him. The respondent has filed a cross-objection challenging that part of the decree of the Court below by which it has refused future interest. 6. Mr. Mitra, learned counsel for the appellant, has urged the following points in support of the appeal:- - (i) The transaction being an usufructuary mortgage no decree for sale could be passed under Sec. 67 of the Transfer of Property Act; (ii) Even if such a decree could be passed, as the respondent never came in possession of the mortgaged property the limitation was to be counted from the date of the mortgage deed and not from the due date and as such the suit was barred. (iii) The claim for money decree under Sec. 68 of the Transfer of Property Act was also barred by limitation; (iv) The suit was barred by Order 2, Rule 2 of the Code of Civil Procedure as the cause of action for the present suit and of the suit for Hunda rent for the years 1361 and 1362 Fs. (iii) The claim for money decree under Sec. 68 of the Transfer of Property Act was also barred by limitation; (iv) The suit was barred by Order 2, Rule 2 of the Code of Civil Procedure as the cause of action for the present suit and of the suit for Hunda rent for the years 1361 and 1362 Fs. was the same; (v) As the money was advanced by the joint family which had money lending business and no licence for money lending has been produced the suit is barred by Sec. 4 of the Bihar Money Lenders Act; (vi) The Court below has erred in rejecting the plea of payment; (vii) The respondent having claimed interest only from 1361 Fs. the Court below has erred in ordering a decree for interest in his favour from the date of the execution of the mortgage deed; (viii) No decree for interest for the years 1361 and 1362 Fs. could be passed in favour of the respondent as his earlier suit in respect thereof was dismissed. 7. Mr. S. Mustafi, appearing on behalf of the respondent has submitted that there was no substance in any of the contentions of Mr. Mitra. In support of the cross-objection he has contended that the Court below ought to have passed a decree for future interest at the bond rate till the date of the drawing of the final decree and at a rate which appeared reasonable to it till its realisation. 8. I propose to take up first the points urged by Mr. Mitra in seriatim. The question whether a decree for sale can be passed in favour of the respondent or not depends on the decision of the question whether the mortgage in his favour is an usufructuary or an anomalous mortgage. Mr. Mitra had to concede that if the mortgage was an anomalous mortgage, a decree for sale could be passed in favour of the respondent. In support of his contention that the mortgage exhibit 2 was an usufructuary mortgage and not anomalous mortgage, he has placed strong reliance on the decision of Judicial Committee in K. S. Mian Feroz Shah V/s. Sohbat Khan, AIR 1933 PC 178. In that case a mortgage executed by A in favour of B was for a term of 10 years and was in form a mortgage with possession. In that case a mortgage executed by A in favour of B was for a term of 10 years and was in form a mortgage with possession. Possession was not in fact taken by the mortgage, but by a second document of even date, the mortgage-land was leased to A for the same term at a rent which may be taken to represent yearly in the Government records on the basis of the mortgage in the names of the mortgagees. It was contended before their Lordships of the Judicial Committee that there had been previous transactions between the parties of similar character and from that it could be shown that the mortgage was in reality a simple mortgage according to the intention of the parties. It was held that 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 previous transactions. On the facts of that case it was further hold that their Lordships found no reason to construe the mortgage as other than a possessory mortgage and the term of the lease having expired, the appellant was entitled to possession. It was observed that the reality of a transaction that it was a possessory mortgage was supported by the fact of the mutation of the mortgagees name in the Government records. 9. At this stage it may be necessary to refer to another decision of their Lordships of the Judicial Committee in P. Ramarayanimgar V/s. Govinda Krishna, AIR 1927 PC 32, which was relied upon by learned counsel for the respondent. In that case the deed for redemption of which the suit was brought purported to be a deed of mortgage with possession of immovable properties described in four schedules for a sum of eleven lakhs of rupees with certain rate of interest to be recovered from the rents and profits. If the money was not paid by a certain date, the entire amount then due was to carry interest at 1% per mensem. At the same time another deed called a counterpart lease was executed by which the mortgagor took a lease from the mortgagee of the properties of one of the Schedules for the mortgage period. If the money was not paid by a certain date, the entire amount then due was to carry interest at 1% per mensem. At the same time another deed called a counterpart lease was executed by which the mortgagor took a lease from the mortgagee of the properties of one of the Schedules for the mortgage period. The lessee was to pay a fixed yearly rent which was equivalent to interest at the stipulated rate on 21/2 lakhs of rupees. There were three mortgage decrees for this amount of 21/2 lakhs of rupees against the properties of that schedule and the mortgage deed recited that the amount of money was taken for payment of those decrees. In default of payment of the rent reserved, the amount was to be recovered from the incoe of the Izara villages and by means of the lessees other properties besides the properties which Were mortgaged with possession. It was held that the mortgage was an anomalous mortgage or at least a combination of simple mortgage and an usufructuary mortgage. Mr. Mitra has attempted to distinguish this decision on the ground that in the deed there was also a recital that in default of payment of the rent reserved the amount could be recovered also from the other properties which were not mortgaged of the mortgagor. In cases where there is a mortgage purporting to be a usufructuary one and there is also a lease back the question whether it is usufructuary pure and simple or not has to be decided with reference to the facts of each case. It has been observed in Umeshwar Prasad Sinha V/s. Dwarika Prasad, AIR 1944 Pat 5 that no hard and fast rule can he laid down for determining the question as to whether apparently separate transactions are or not parts of a single transaction and that each case must be judged on its own facts as disclosed in the transactions between the parties, evidenced by one or more than one documents. It was further observed that- "... It was further observed that- "... .But one test may generally be applied to enable the Court to say that the two documents form part 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 sudhbharna (usufructuary mortgage) 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 mortgaged properties, but in reality the second document whereby possession 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 properties, it may generally be said that they are parts of the same transaction ......", In another decision of this Court in Smt. Savitri Devi V/s. Smt. Beni Devi, AIR 1968 Pat 222 a transaction where there was an usufructuary mortgage in form and a lease back was held to be an anomalous mortgage. A large number of authorities on the question have been discussed in that judgment. 10. It was contended by Mr. Mitra that the view taken by this High Court in Umeshwar Prasad Sinhas case, AIR 1944 Pat 5 and other cases following it have been overruled by the Supreme Court and not found correct in Mathuralal V/s. Keshar Bai, AIR 1971 SC 310 . Learned counsel is not correct in his submission that the decision of this Court in Umeshwar Prasad Sinhas case and other decisions following it have not been overruled or dissented from by the Supreme Court on the question of the nature of the mortgage. The Supreme Court has merely laid down that in cases of a mortgage and lease back separate suit for the rent due under the lease is maintainable. The view taken by this Court in the aforesaid decision can be said to have been overruled by the Supreme Court only to that extent. As it appears from the facts of the case before the Supreme Court, the deed under consideration could not be held to be a mortgage of any other type than usufructuary. Their Lordships of the Supreme Court expressly approved the view taken by Rajasthan High Court in Lalchand V/s. Menuram, AIR 1963 Raj 69. As it appears from the facts of the case before the Supreme Court, the deed under consideration could not be held to be a mortgage of any other type than usufructuary. Their Lordships of the Supreme Court expressly approved the view taken by Rajasthan High Court in Lalchand V/s. Menuram, AIR 1963 Raj 69. Bhandari J. of Rajasthan High Court in that case observed as follows:- - "Whether the two documents represent one transaction or two different transactions, a Court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them. In law mortgages of various forms are recognised and a mortgagor may Secure himself not only the possession of the property but also stipulate payment of interest at a particular rate of interest. The interest may be made realizable from the usufruct of one mortgaged property. Such a transaction is a well recognised form of transaction and is known as anomalous mortgage. .-....". The view that such a mortgage is an anomalous mortgage appears to have been approved by the Supreme Court in the aforesaid case. 11 Coming now to the facts of the present case I find that the Hunda executed by the appellant has not been brought on the record. But what were its terms can he gathered from the pleadings. Paragraphs 3 and 4 of the plaint are as follows:- - "3. That the defendant agreed to pay interest at 1% per month on the same; the defendant agreed to execute a Rehan Bond for the sum of Rs. 6,000 agreeing to put the plaintiff in possession of the lands mentioned in Schedule 2 of the plaint below and he agreed to pay Rs. 720 in lieu of interest and he agreed to execute Hunda for the same and the due date of payment as fixed, by the end of Baisakh 1357 Fs. 4. That defendant received Rs. 6,000 and executed a Rehan Bond dated 21-7-49 and a Hunda on 25-7-49 in favour of the plaintiff." Then paragraph 6 of the plaint states that the defendant paid interest in the shape of Hunda rent up to 1360 Fs. These averments in the plaint are not denied in the written statement, rather, paragraph 9 of the written statement expressly says that the statements made in paragraphs 3 and 4 of the plaint are not denied. These averments in the plaint are not denied in the written statement, rather, paragraph 9 of the written statement expressly says that the statements made in paragraphs 3 and 4 of the plaint are not denied. On the leadings of the parties itself, therefore, it as to be held that the mortgage and the lease back to the mortgagor were parts of the same transaction and intention of the parties to the transaction was that the mortgagee should not get possession of the mortgage properties but would only get interest on the amount advanced by him at stipulated rate every year and the mortgage and the lease back was nothing of merely a device to ensure regular payment of the interest. Such a transaction cannot be held to be an usufructuary mortgage and as held in Smt. Savitri Devis case, AIR 1968 Pat 222 , referred to above, it is an anomalous mortgage. The correctness of the aforesaid Bench decision of this Court has not been shaken in the least by the decision of the Supreme Court in Mathura Lals case, AIR 1971 SC 310 . I would accordingly hold that the transaction which is the basis of the present suit was an anomalous mortgage. It was also held in Smt. Savitri Devis case that unless there is a covenant to the contrary a decree for sale of the mortgage property can be passed in accordance with the provisions of Sec. 67 of the Transfer of Property Act In the circumstances of the present case, therefore, the decree for sale passed by the Court below cannot be held to be bad in law. 12. There is also no substance in the contention of Mr. Mitra that the starting point of limitation in the present suit should be the date of the mortgage itself and not the due date. Had the mortgage been a usufructuary mortgage, possibly something could have been said in support of that argument, but as held above, the mortgage is an anomalous mortgage and in this case, therefore, the limitation of twelve years will start from the due date i.e. 13th May, 1950. The suit was instituted on 2nd May, 1962 and therefore was within twelve years from that date and thus not barred. 13. The suit was instituted on 2nd May, 1962 and therefore was within twelve years from that date and thus not barred. 13. As the respondent has been entitled to a decree for sale under Sec. 67 of the Transfer of Property Act the contention of Mr. Mitra that if he would have claimed a decree under Sec. 68 of that Act, the claim would have been barred, Deed not be considered. 14. The plaint of the suit for arrears of rent for the years 1361 and 1362 Fs. has not been brought on the record by the appellant. In the circumstances as held in Jichhu Ram V/s. Pearey Pasi, AIR 1967 Pat 423 (FB) and Gurubux Singh V/s. Bhooralal AIR 1964 SC 1810 the defence as to bar of Order 2, Rule 2 of the Code of Civil Procedure cannot be entertained. Mr. Mitra has contended that the Full Bench decision of this Court in Jichhu Rams case is not correct inasmuch as the Supreme Court in Gumbux Singhs case did not make a general statement as assumed by this court. According to Mr. Mitra the observations of the Supreme Court were related only to Order 2, Rule 2 (3) of the Code of Civil Procedure and not to Order 2, Rule 2 (1) of the Code of Civil Procedure. I am not inclined to agree with this contention of Mr. Mitra. The Supreme Court observed- ".... Just as in the case of a plea of res judicata which cannot be established in the decree which is pleaded as estoppel, we consider that a plea under Order 2, Rule 2, Civil Procedure Code cannot be made out except on proof of the plaint in the previous suit the filing of which is said to create the bar......" In my opinion, the Court below has rightly rejected the case of the appellant that the suit was barred by Order 2, Rule 2 of the Code of Civil Procedure. 14A. On the question whether the money was advanced by the joint family, I am also inclined to agree with the view taken by the Court below. The respondent who examined himself as P.W. 6 stated that the money which he advanced was his Koshal money. His father Ambika Singh was examined as P.W. 5. He too said that the money was Koshal money of his son. The respondent who examined himself as P.W. 6 stated that the money which he advanced was his Koshal money. His father Ambika Singh was examined as P.W. 5. He too said that the money was Koshal money of his son. Merely because the Court below has found that the respondent and his father constituted a joint family of which the father was the Karta, it cannot be held that the said money was not the personal money of the respondent. Mr. Mitra relied upon the statement of P.W. 6 in his cross-examination that he had with him about Rs. 9,000 of koshal which was at his house and was with him for about 20 years. Mr. Mitra wanted us to draw an inference from this statement that whatever Koshal money the respondent had that was with him and the money which was advanced on mortgage to the appellant would not be his Koshal money. The respondent merely meant to say that on the date he was deposing he had Rs. 9,000 with him as his personal money and that money was with him for about 20 years. It cannot be said because of this statement that he admitted that never within 20 years he had with him more than Rs. 9,000 as his personal money. The appellant who examined himself as D.W. 4 alone said that the money was paid to him by Ambika Singh, the father of the respondent He has not examined any other witness in support of it. If really the money would have been paid by Ambika Singh, the appellant could have examined other witnesses in support of that fact. In his examination-in-chief, the appellant said that the respondent had no koshal money but in his cross-examination he admitted that the respondent was a rich man. On the evidence on the record it is not possible for me to take a view different from one taken by the Court below, who had the opportunity of seeing the witnesses. It is not disputed that the respondent and the appellant are known to each other for a considerable period. In the circumstances, if the respondent would have advanced money to any one else, that fact would have been known to the appellant and he could have adduced evidence in support of that. It is not disputed that the respondent and the appellant are known to each other for a considerable period. In the circumstances, if the respondent would have advanced money to any one else, that fact would have been known to the appellant and he could have adduced evidence in support of that. There is no evidence at all on the record to show that the respondent ever advanced money to any one else. The respondent, therefore, cannot be said to be doing business of money lending and, was not required to have a house (sic) for money lending. The suit cannot, therefore, be held to be barred under Sec. 4 of the Money Lenders Act or for non-joinder of the father of the respondent as a party to it. 15. The appellant was not able to produce any documentary evidence in support of the payment of Rs. 612/8/- or Rs. 65 to the respondent or his father. The Court below has rightly, therefore, disbelieved the oral evidence of D.Ws. 3 and 4 on this point. The case of the appellant that a sum of Rs. 3500 was ad justed towards the consideration of the sale deed, exhibit 1, cannot be also accepted. Had that been fact it would have been mentioned in the sale deed itself. Secondly it appears highly improbable that part of the mortgage money would be adjusted towards consideration of another deed without executing another document of mortgage getting the former one cancelled. The only evidence in support of this adjustment is of the appellant himself. He being highly interested in the result of the suit, his oral evidence on this point cannot be accepted. True it is that in the judgment the Court below has ordered for a decree for interest from the date of the execution of the mortgage deed itself, though the claim in the plaint was from 1361 Fs. only. Rut the decree does not follow that direction. The claim of the respondent only to the extent made out in the plaint has been allowed by the decree. The direction of the Court below for a decree for interest from the date of the execution of Zarpesgi deed in the circumstances has rightly not been given effect to in the decree and cannot be given effect to. 16. There appears substance in the submissions of Mr. The direction of the Court below for a decree for interest from the date of the execution of Zarpesgi deed in the circumstances has rightly not been given effect to in the decree and cannot be given effect to. 16. There appears substance in the submissions of Mr. Mitra that the Court below should not have passed a decree for interest for the years 1361 and 1362 Fs. as the suit of the respondent for rent of those years was dismissed. Though the claim in that suit was for rent, the Courts below passed a decree for interest and that was set aside by this Court (vide Ext. 3). Exhibit 3 operates as res judicata as against the claim for interest in respect of years 1361 and 1362 Fs. It was submitted by learned counsel for the respondent that such a plea was not expressly taken in the written statement. In my opinion averments in the written statement are wide enough to include the plea. Further the respondent having admitted payment of Hunda rent up to 1360 Fs. a sum of Rs. 720 every year till 1360 Fs. shall have to be adjusted towards the interest @ 9% per annum and principal. The balance of principal duo at the end of 1360 Fs. cannot be Rs. 6,000 as claimed by the respondent. 17. Coming now to the cross-objection, I find that there is substance in it. As required by Order 34, Rule 11 of the Code of Civil Procedure the Court below ought to have passed a decree for interest @ 9% per annum up to the date on or before which the payment of the amount found or declared due under the preliminary decree was to be made by mortgagor or other person redeeming the mortgage. It was also not correct in disallowing future interest on the ground that the respondent narrowly escaped the mischief of Order 2, Rule 2 of the Code of Civil Procedure. In my opinion the respondent is entitled to future interest from the date fixed for payment in the preliminary decree till the date of realisation @ 4% per annum on the amount decreed. 18. In the result, both the appeal and the cross-objection are allowed in part. The respondent is held entitled to a decree for principal and interest as indicated in the preceding paragraphs. 18. In the result, both the appeal and the cross-objection are allowed in part. The respondent is held entitled to a decree for principal and interest as indicated in the preceding paragraphs. As a matter of grace three months time from the date of the signing of the decree of this Court is allowed to the appellant to pay the dues under the decree passed by this Court. Failing that the Court below will pass a final decree for sale. In the circumstances, the parties shall bear their own cost of this Court. Kanhaiyaji, J. 19 I agree.