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SUPREME COURT OF INDIA
S.M. SIKRI, V. BHARGAVA AND G.K. MITTER, JJ.
Mathuralal, Appellant
Versus
Keshar Bai and another, Respondents.
Civil Appeal No. 774 of 1967, D/-20-2-1970.
Advocate appeared
D. N. Mukherjee, Advocate, for Appellant; Janardan Sharma, Advocate, for Respondents.
The right under the Limitation Act of 1908 was to ensure for 60 years from the date of the mortgage and the mortgagor had not lost his right to redeem notwithstanding the passing of the preliminary decree in the mortgage suit. The mortgage security continued even after the passing of the said decree, if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did not apply for a final decree, he would only lose his right to recover the mortgage money by sale of the property unless he applied for that purpose within the period of limitation fixed by the Limitation Act. After the mortgagee had lost his right to apply for a final decree for sale, he did not lose his status as a mortgagee, he only lost his remedy to recover the mortgage money by sale. The mortgagor did not lose his right to redeem. [Para 8
(2) Transfer of Property Act, 1882 - Ss.58 & 105 - mortgage and lease back-right to get a final decree barred by limitation--mortgagee landlord's right to get back possession on the basis of lease deed not extinguished-Limitation Act, 1908 - S.28 - Civil P.C., 1908 - O.34, R.4.
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. Having secured the possession of the mortgage, the mortgagee, is, further entitled to lease it out even to the mortgagor. It is in the interest of the mortgagor that the property is leased out to him as he can better look after it There is nothing objectionable in this, nor is there any statutory prohibition for such transactions. Now if the parties do this by executing proper documents, it is the duty of the Court of law to give effect to them. [Para 14
In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened whereas in this case the interest on the amount of the mortgage is not the same as the rental fixed. If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it. Under the provisions of Order 34, rule 4 he cannot deprive the mortgager of his right to redeem except by proceeding on his mortgage. [Para 15
(1) Transfer of Property Act, 1882 - S.60 - suit by mortgagee for redemption-after preliminary decree application filed for final decree becoming time barred-mortgagor does not lose his right to redeem- right of mortgagee in possession after the application becoming time barred - Civil P. C., 1908 - O. 34, R. 4.
The right under the Limitation Act of 1908 was to ensure for 60 years from the date of the mortgage and the mortgagor had not lost his right to redeem notwithstanding the passing of the preliminary decree in the mortgage suit. The mortgage security continued even after the passing of the said decree, if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did not apply for a final decree, he would only lose his right to recover the mortgage money by sale of the property unless he applied for that purpose within the period of limitation fixed by the Limitation Act. After the mortgagee had lost his right to apply for a final decree for sale, he did not lose his status as a mortgagee, he only lost his remedy to recover the mortgage money by sale. The mortgagor did not lose his right to redeem. [Para 8
(2) Transfer of Property Act, 1882 - Ss.58 & 105 - mortgage and lease back-right to get a final decree barred by limitation--mortgagee landlord's right to get back possession on the basis of lease deed not extinguished-Limitation Act, 1908 - S.28 - Civil P.C., 1908 - O.34, R.4.
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. Having secured the possession of the mortgage, the mortgagee, is, further entitled to lease it out even to the mortgagor. It is in the interest of the mortgagor that the property is leased out to him as he can better look after it There is nothing objectionable in this, nor is there any statutory prohibition for such transactions. Now if the parties do this by executing proper documents, it is the duty of the Court of law to give effect to them. [Para 14
In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened whereas in this case the interest on the amount of the mortgage is not the same as the rental fixed. If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it. Under the provisions of Order 34, rule 4 he cannot deprive the mortgager of his right to redeem except by proceeding on his mortgage. [Para 15
Judgement
MITTER, J.:- This is an appeal by special leave from a judgment of the Madhya Pradesh High Court dated 6th February 1967 dismissing a Second Appeal by the appellant before this Court against a decree passed by the Additional District Judge of Ratlam for ejectment of the appellant from a house mortgaged by the predecessor-in-interest of the appellant to one Kesharimal for Rs. 3,100/- and further decreeing a claim for arrears of rent amounting to Rs. 731-35 and mesne profits at the rate of Rs. 20/- per month until eviction.
2. The relevant facts are as follows. On July, 29, 1945 Mathuralal, predecessor-in-interest of the appellant, mortgaged his house in Ratlam to Kesharimal for a sum of Rs 3,100/ with possession. The deed of mortgage contained the following terms :-
1. That interest would run on Rs, 3,100/- at Re. 0-10-0 per cent per mensem till realisation.
2. The period of redemption would be two years.
3. During the period of mortgage. "the tenant as may be shall execute the rent notes in favour of the mortgage and whatever rent shall be realised will be credited in lieu of interest and if the amount of rent shall exceed the amount of interest, the difference shall be deducted from the original sum due, but if the amount of interest shall exceed the amount of interest, the difference shall be deducted from the original sum due". But if the amount of interest shall exceed the amount of rent, then the mortgagor shall pay it.
4. Notwithstanding any vacancy during the period of the mortgage the rent would continue.
5. During the period of the mortgage an account of the rent and interest shall be settled after every six months.
6. The mortgagor undertook to keep the house in repairs during the period of the mortgage and in default of repairs by him the mortgagee was to be entitled to execute the necessary repairs and add the cost to his dues.
7. "The burden of the mortgage money shall be on the mortgaged house. In case the amount is not realised from the house, the mortgagee shall have a right to take steps to realise his money" from the mortgagor and his property of every kind.
3. On the same day the mortgagor executed another document in favour of the mortgagee reciting that his house in Ratlam was mortgaged with possession to the creditor who was "having its possession" and the mortgagor had taken the same on rent at Rs. 20 Per month on the following terms :-
1. The executant would pay the rent every month regularly and in default of payment of two months rent the mortgagee would be entitled to get him evicted.
2. The executant would white-wash and repair the house and keep it in good condition.
3. Kesharimal would be entitled to increase or decrease the rent.
4. The executant would vacate the house whenever asked to do so.
5. The executant would hand over possession of the house in the same condition in which he had received it.
4. Kesharimal filed a suit on his mortgage in 1954 and a preliminary decree for sale for the amount of Rs. 5,637-6-0 besides interest at the rate of Re. 0-10-0 per cent per mensem for six months on the sum of Rs. 3,600 was duly passed. The defendant was directed to pay the full amount of the decree before the 24th May 1955 and in case of his doing so the property was to be released from the mortgage and the plaintiffs were to hand over all the documents which they had in their possession, but in case of failure to pay the plaintiffs would be entitled to file an application for the execution of the decree and get the property auctioned; and in case of non-satisfaction of the decree by the sale, the plaintiffs were to be at liberty to recover the balance of the decretal claim by a personal decree against the defendant.
5. It appears that Kesharimal had died during the pendency of the suit and his legal representatives were brought on record and the preliminary decree passed in their favour. Whatever be the reason no application for a final decree for sale of the property was made within the period fixed under
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