Judgement

Appeal (No. 51 of 1937) from two decrees of the High Court (May 20, 1935) reversing a decree of the Additional Subordinate Judge of Asansol (April 20, 1931).

The appellants were the successors in title to the grantees of a patta or lease for 999 years in respect of certain mining rights. This lease contained a clause giving the grantees liberty to alienate the property by making gifts, sales, sub-leases or any other kind of transfer.

The grantees sub-demised their rights to one Martin.

By various subsequent assignments Martins interest under the sub-lease became vested in Patel, one of the present respondents.

Patel executed two mortgages of his leasehold interest, (1.) of an undivided moiety of his underground rights, which mortgage was transferred to the second and third respondents and (2.) of the whole of his underground rights, subject to the first mortgage, to the first respondent. Both the mortgages were in the form of English mortgages.

[The material terms of these mortgages are stated in the judgment of the Board.]

None of the mortgagees entered into possession, but, the rent reserved by the sub-lease to Martin having fallen into arrears and the covenants of the sub-lease remaining unperformed, the present suit was instituted by the predecessors of the appellants against Patel and a receiver of the mine, who had been appointed receiver in another suit for recovery of the sums due under the sub-lease. Patels mortgagees, respondents 1 to 3, were added as defendants and claims were made against all for the performance of the terms of the sub-lease for at any rate such periods as they had interests in the leasehold. The main question in the suit and in the appeal was whether there was any privity between the grantees of the patta as lessors and the mortgagees.

The Subordinate Judge of Asansol, who tried the suit, held there was.

The High Court reversed his judgment.

1938. Oct. 31; Nov. 1. Cyril Radcliffe K.C. and J. M. Pringle for the appellants. In our submission the most important element in the case is that, by the instruments which determine the rights of the parties, there has been in the most unqualified terms a transfer by the mortgagor of a half-share of the lease in the first mortgage and, subject to the first mortgage, the whole interest in the lease in the second mortgage to the mortgagees. The consequence of this would, in English law, be plain the mortgagees would become by assignment the owners of the lease and as such they would be liable for the rent directly to the lessor.

The question is whether there is anything in the Indian law to take the case out of this position. It is, I submit, immaterial whether the mortgages are English mortgages as defined in s. 58 of the Transfer of Property Act or not, if they have the result, whatever they are, of making the mortgagees the owners of the leasehold interest. [Reference was made to ss, 5, 58, 60 to 67, 98, 105, 108 and 109 of the Transfer of Property Act, to Mullas Transfer of Property Act ( 1933 ed.), p. 562, note on s. 108, cl. (j), and the following cases Kunhanujan v. Anjelu (( 1889) I. L. R. 17 Mad. 296.); Monica v. Subraya Hebbara (( 1907) I. L. R. 30 Mad. 410.) ; Kannye Loll Sett v. Nistoriny (( 1884) I. L. R. 10 Cal. 443.); Lala Bharub Chandra Kapur v. Lalit Mohun Singh (( 1885) I. L. R. 12 Cal. 185.); Vithal Narayan v. Shriram Savant (( 1905) I. L. R. 29 Bom. 391.); Tethalan v. The Eralpad Raja (( 1917) I.

L. R. 40 Mad. 1111.); Bengal National Bank, Ld. v. Janaki (( 1927) I. L. R. 54 Cal. 813.); Falakrishna Pal v. Jagannath Marwari (( 1932) I. L. R. 59 Cal. 1314.); Bank of Upper India v. Administrator General of Bengal (( 1917) I. L. R. 45 Cal. 653.) ; Hunsraj v. Bejoy Lal Seal (( 1929)

L. R. 57 I. A 110 ; I. L. R. 57 Cal. 1176.) ; and to Fisher on Mortgage (7th ed.), p. 376.]

Law. Rep. 66 Ind. App. 50 ( 1938- 1939) Ram Kinkar Banerjee V. Satya Charan Srimani

182

One must look for the owner of the lease. The mortgagor here has assigned his r