Judgement

Appeal (No. 112 of 1927) from a decree of the Chief Court of Oudh (October 12, 1926) varying a decree of the Subordinate Judge of Rai Bareli.

The appellant brought a suit to enforce a mortgage of April 8, 1923, by sale of the mortgaged property, or for a money decree for the amount owing. The Subordinate Judge made a decree in the usual form for the payment of the mortgage money by sale. He held that the mortgage in question was a combination of a simple mortgage and an usufructuary mortgage so that it was governed by s. 68 of the Transfer of Property Act (Act IV. of 1882). The Chief Court, differing from the Subordinate Judge, held that the mortgage was an anomalous mortgage governed by its own terms by virtue of the provisions contained in s. 98 of the Act, so that the only remedy to which the mortgagee was entitled was for possession of the mortgaged property under the terms of the mortgage deed.

The terms of the mortgage appear from the judgment of the Judicial Committee.

1929. Feb. 22. Dunne K.C. and S. Hyam for the appellant.

The respondents did not appear.

March 15. The judgment of their Lordships was delivered by

LORD TOMLIN. This is an appeal by the plaintiff in the suit from a decree dated October 26, 1926, of the Chief Court of Oudh which varied a decree dated August 13, 1925, of the Court of the Subordinate Judge at Rai Bareli.

On April 8, 1923, a mortgage, which was duly registered, was executed by the first two defendants in favour of the third defendant to secure an advance of Rs. 30,000 carrying interest at the rate of 5 annas and 1 pie per cent, per month.

By clause 2 of this mortgage it was stated that an 8 annas share in certain villages had been hypothecated in lieu of the principal mortgage money and interest and in order to pay the annual interest on the mortgage money possession over the hypothecated property had been delivered to the mortgagee, who, after paying the revenue, should appropriate the surplus profits to the extent of the annual interest.

By clause 3 the mortgage money was promised to be repaid within thirty-five years ; and at the stipulated time when in Khali fasl in the month of Jeth, or at any other time, the mortgagors should pay money to the mortgagee the mortgaged property should become redeemed.

The fourth clause of the mortgage contained a further provision that the mortgagors should remain entitled to eject tenants, to enhance rent, to cultivate land, and to issue leases and after enhancement and payment of interest if there be left any surplus, or if the mortgagors pay any year or each year any amount of money, then that money should be deemed to have been paid towards the principal and interest on the money paid should be deducted; and that the mortgagee like the mortgagors, should possess all the remaining powers during the period of his possession.

By clause 5 it was provided that if the mortgagors fail to pay the mortgage money and fail to redeem the mortgage at the appointed time, then the mortgagee should have power to realize the money due to him by sale of the mortgaged property; and that if the mortgaged property should be found to be insufficient to satisfy the full demand then the mortgagee should be entitled to recover the balance from the other properties of the mortgagors. Clause 7 provided that if on the claim of any person any part or whole of the mortgaged property were to go out of the mortgagees possession, or if there were to arise any disturbance in the mortgagees possession, then the liability therefor should rest with the mortgagors.

The money was duly advanced, but the two first defendants failed to deliver possession of the mortgaged property to the third defendant. By a deed of transfer dated April 17, 1924, and registered on April 22, 1924, the third defendant transferred the mortgage and her rights thereunder to the plaintiff.

On May 14, 1924, the plaintiff filed a petition of plaint against the three defendants in the Court of the Subordinate