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Gauhati High Court · body

1990 DIGILAW 63 (GAU)

Binapani Purkayastha v. Narendra Kumar Purkayastha

1990-04-02

R.K.MANISANA SINGH

body1990
This appeal arises from the judgment and decree passed by the Assis­tant District Judge (2) Gauhati in T.A. No.11 of 1975 from the judgment and decree passed by the Munsiff (II) Gauhati in T. S. No. 2 of 1972. 2. Facts giving rise to this appeal, in, brief are as follows. The plaintiffs instituted the suit in the Court of the Munsiff for fore­closure of mortgaged property (suit land) having an area of 12 Bighas. The case of the plaintiffs is thus. Three sister, namely Sabitri Bala, Basanti Bala and Binapani (since deceased) mortgaged the suit land to the plaintiff-1 and the plaintiff-2's father by executing a registered mortgage deed dated 18. 6. 51 for a loan of Rs. 1350/-advanced to them with interest @ 12%. The mortgagors delivered possession of the mortgaged property on 18. 6. 51 to the mortgagees and authorised them to receive profits from the suit land and appropriate the same towards interest. It was also stipulated in the mortgage that the sum of Rs. 1350/- would be paid by the mortgagors within three (3) years, and that if the mortgagors failed to pay the mortgaged-money, or mortgagors failed to redeem the property within the stipulated period of three (3) years, the mortgagees would be entitled to a sale deed executed in respect of the mortgaged property through Court for Rs.1350/ -which had already been paid. The mortgagors failed to pay the debt within the time as was stipulated and, therefore, the mortgagees filed the suit. The mortgagor Binapani (defendant-2) contested the suit. Her case is that the mortgage was an usufructuary mortgage. The plaintiff have been in possession of the suit land till date and the plaintiffs had already received profits of Rs. 54, 506.50 from the mortgaged property in excess of the mortgage money. Therefore, the mortgagors were not entitled to any relief. She also claimed, inter alia, delivery of possession of the mortgaged property along with relevant documents. 3. The trial Court held that the mortgage was not usufructuary mortgage, but it was an anomalous mortgage, and that the mortgagors had failed to pay the debt. Thereafter the trial Court decreed the suit in the following terms. The defendants were directed to deposit the sum of Rs. I350/-with interest at 5% per annum from 18. 6. 51 to 18.6.54 and costs of the litigation within 16. 1. Thereafter the trial Court decreed the suit in the following terms. The defendants were directed to deposit the sum of Rs. I350/-with interest at 5% per annum from 18. 6. 51 to 18.6.54 and costs of the litigation within 16. 1. 75 and the plaintiffs were directed to deliver the possession of the mortgaged property to the defendants along with the relevant documents and to retransfer the mortgaged property. In the event of defendants' failing to deposit, a final decree shall be prepared debarring defendants from all rights to redeem the mortgaged property. The lower appellate Court passed a decree for foreclosure of the mortgaged property. Hence this appeal. 4. Mr. S. K. Senapati, the learned counsel for the appellants, has contended that it was an usufructuary mortgage and therefore, the suit for foreclosure is not maintainable. 5. The question which, therefore, arises for consideration is whether the mortgage was an usufructuary mortgage. 6. Section 58 (d) of the T. P. Act defines usufructuary mortgage in the following words : "Where the mortgagor delivers possession (or expressly or by implication binds himself to deliver possession) of the mortg­aged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage money, and to receive the rents and profits accruing from the property (or any part of such rents and profits and to appropriate the same) in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest (or) partly in payment of the mortgage money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee." The use of the expression "until payment of the mortgaged money" in section 58 (d) indicates that the mortgagee is entitled to remain in possession of the mortgaged property until payment of the mortgage money and the rents and profits of the mortgaged property are to be set off against interest or principal or both. Therefore, where there is stipulation that the mortgage is for a definite period, it is no longer an usufructuary mortgage as such a stipulation is inconsistent with the incidents of an usufructuary mortgage. In the present case, there was a stipulation that the debt would be paid within three (3) years and, therefore, it was not an usufructuary mortgage. 7. Therefore, where there is stipulation that the mortgage is for a definite period, it is no longer an usufructuary mortgage as such a stipulation is inconsistent with the incidents of an usufructuary mortgage. In the present case, there was a stipulation that the debt would be paid within three (3) years and, therefore, it was not an usufructuary mortgage. 7. The question then is,-Was it a simple mortgage for the reasons that there was a personal covenant to pay the mortgage debt within three (3) years. In the present case, although there was a personal covenant to pay the mortgaged debt within three (3) years, there was delivery of possession of the mortgaged property to the mortgagees. In a simple mortgage, the mortgagor, without delivering possession of the mortgaged property, binds himself personally to pay the mortgage-money, and agrees expressly or impliedly that in the event of his falling to pay according to his contract, mortgagee shall have a right to cause the mortgaged property to be sold. In the instant case, there was delivery of possession of the mortgaged property and therefore, the mortgage was not a simple mortgage. 8. In my judgment, the mortgage in question was an anomalous mortgage for the following reasons. Section 58 (g) of the T. P. Act defines anomalous mortgage. Under that section, an anomalous mortgage is 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. As the mortgage in the present suit was not a simple mortgage nor was an usufructuary mortgage, it falls within the scope, purport and meaning of anomalous mortgage. 9. As regards the agreement in the mortgage that if the mortgagors failed to pay the debt within the stipulated period of three (3) years, the mortgagees were entitled to a sale deed in respect of the mortgaged property through Court for Rs. 1350/-. The agreement shows that in default of payment of mortgage-money on due date, the mortgagors would sell the mortgaged property at the price fixed. The agreement is to prevent the mortgagor from his right of redemption which continues although he fails to pay the debt in due date. 1350/-. The agreement shows that in default of payment of mortgage-money on due date, the mortgagors would sell the mortgaged property at the price fixed. The agreement is to prevent the mortgagor from his right of redemption which continues although he fails to pay the debt in due date. It is settled that the right of redemption cannot be controlled by any agreement made as a part of the transaction of mortgage, i. e. the right of redemption of mortgagor is not subjected to any contract to the contrary. Therefore, an agreement in the mortgage that in default of payment of mortgage money oil the due date, the mortgagor will sell the mortgaged property to the mortgagee at the price fixed constitutes a fetter on equity of redemption and is, therefore, a clog on redemption. For these reasons, the agreement is unenforceable. 10. The next question which arises for consideration is what would be the nature of the decree to be passed. The relevant portion of section 67 of the T.P. Act runs as follows : "Right to foreclosure or sale : In the absence of contract to the contrary, the mortgagee has, at any time after the mortgage money has become (due) to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court (a decree) that the mortgagor shall be absolutely debarred of his right to redeem the property, or (a decree) that the property to be sold. A suit to obtain (a decree) that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure. Nothing in this section shall be deemed - (a) to authorise any mortgagee, other than a mortgagee by: conditional sale or a mortgagee under an anomalous mortgage by the terms of which he Is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgage as such or a mortgagee by conditional sale as such to institute a suit for sale; or ... ..." (emphasis added) A reading of section67indicates that, in the case of anomalous mortgage, the remedy available to a mortgagee is - foreclosure, if it is provided by the terms of the mortgage, or sale, if there is no contract to the contrary. ..." (emphasis added) A reading of section67indicates that, in the case of anomalous mortgage, the remedy available to a mortgagee is - foreclosure, if it is provided by the terms of the mortgage, or sale, if there is no contract to the contrary. The contract or term may be expressed or implied. la the instant case, as already stated, there was a clause in the mort­gage in question that in default of the payment of the mortgage money within three (3) years, the mortgagee would be entitled to get the sale deed in respect of the mortgaged property executed through Court for Rs.1350/-, Although it has been concluded that the clause is unenforceable, the clause reveals that there was an implied contract that the mortgagors did not intend to cause the mortgage property to be sold, or to foreclose. A mortgagee is to be protected against the operation, but the mortgagor not being in the need of the same protection may curtail his right of foreclosure or sale by contract. Therefore, the plaintiffs have no right to foreclose or sale by contract. In such a circumstances, I am of the view that if a simple money decree is awarded, it would meet the ends of justice. I do so accordingly. 11. As regards the mortgaged property, it is in possession of the mortgagees. The case of the plaintiffs is that the mortgagors authorised the mortgagees to receive profits of from land and to appropriate the same in lieu of interest. The case of the defendant is that the profits were to set off against the interest and mortgage money, and that the mortgagee had received profits more than which was to be paid to them. But the trial Court has held that no mention had been made in the mortgage deed that the mortgagees would enjoy the usufruct in lieu of the interest or mortgaged debt. As regards the claims of the defendants, the trial Court has held that, the mortgage being not an usufrcutuary mortgage, the claim of the defendant was not tenable under the law. The appellate Court has not given any finding in this regard. The question then is,-What for the mortgagees were allowed to remain in possession and to receive the profits from the mortgaged property. Mortgage is security for the repayment of the debt. The appellate Court has not given any finding in this regard. The question then is,-What for the mortgagees were allowed to remain in possession and to receive the profits from the mortgaged property. Mortgage is security for the repayment of the debt. But it has already been held_ that the mortgagees had no right of foreclosure or sale by contract or agreement. The mortgage-deed is silent about the-mode of appropriation. Therefore, the factual position is that the mortgaged property was secured for the repayment of the debt (principal and interest). On the other hand, the mortgagee cannot, follow the property. In such a situation, in this case equity inter­venes or equity comes into play. In the mortgage deed, the interest of l2%, but it has not been mentioned in the mortgage deed whether it is 12% per month or per annum or for the three-year. The trial Court has awarded interest at 5% par annum for three (3) years, as already stated. These findings were not challenged before the lower appellate Court as well as before this Court. On the facts and in the circumstances of the case, the interest at 5% per annum is accepted. The transaction took place on 18. 6. 51. The suit was instituted on 16.7.70 and it was decreed by the Munsiff on 15 7.74. Therefore, if interest is awarded at the rate of 5% per annum from the date of transaction i. e. 18.6.51 to date of institution of the suit (16.7.70) and further interest at the rate of 5% from the date of institution of the suit till the decree was passed by the Munsiff on 15.7.74, it will meet the ends of justice. The total amount of interest for twenty three (23) years and one (1) month is Rs. 1558.50. therefore, the total amount payable by the defendants comes to Rs. 2908.50 (1350+1558.50=2908.50). 12. As regards the possession of the mortgaged property, the mortgagees have been possessing and enjoying the usufruct for more than 39 (thirty nine) years. I am of the tentative view that the mortgagees might have received profits more than what was required to be paid by the mortgagors. In the circumstance of the case the mortgagees shall deliver the possession of the mortgaged property to the defendants along with the relevant documents within six (6) months from the date of judgment (2.4.90). I am of the tentative view that the mortgagees might have received profits more than what was required to be paid by the mortgagors. In the circumstance of the case the mortgagees shall deliver the possession of the mortgaged property to the defendants along with the relevant documents within six (6) months from the date of judgment (2.4.90). If the mortgagees do not deliver the possession of the mortgaged property, the defendants is entitled to execute the decree. As regards the payment of mortgage debt and interest, namely Rs. 2905.50, the mortgagees shall render account before the Munsiff concerned and the learned Munsiff after settlement of the account of the parties, the excess money, if any, shall be given to the defendants and, if there is no excess, the mortgagees are entitled to execute the decree as provided under the law for execution of simple money decree for the remaining sum payable to them. 13. In the result, the appeal is disposed of in terms of the following orders : a) the defendants shall pay a suit of Rs. 2908.50 to the plaintiffs; b) the plaintiffs shall deliver the possession of the suit land (mortgaged property) to the defendants within six (6) months from the date of judgment (2.4.90) c) if the plaintiffs do not deliver the possession of the mort­gaged property (suit land) as directed, the defendants are entitled to execute the decree as provided under O 21, CPC for delivery of possession ; and d) the mortgagors shall render account of the profits from the land before the concerned Munsiff and after settlement of the account of the parties the excess, if any, shall be given to the defendants and, if there is no excess, the mort­gagees are entitled to execute the decree as provided under the law for the remaining sum for execution of the simple money decree. This is mode of payment of Rs 2908,50 by the defendants to the plaintiffs. With the above observations and direction, the appeal is partly allowed. The decrees of the Courts below are modified to the extent indicated above. No costs.