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1932 Supreme(SC) 31
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD THANKERTON, SIR JOHN WALLIS, AND SIR GEORGE LOWNDES.
SORABJEE - Appellant
Versus
DWARKADAS RANCHHODDAS (DEFENDANTS) - Respondents
On appeal from the Chief Court of the Judicial Commissioner, Central Provinces.
Decided On : May.
Solicitors for appellant: T. L. Wilson & Co.
Solicitors for respondents Nos. 1, 2, 3: Douglas Grant & Dold.
A mortgagor cannot recover acquisitions made by a mortgagee for the mortgagee's own benefit under Section 63 of the Transfer of Property Act unless the acquisition falls within Section 90 of the Indian Trusts Act, meaning the mortgagee used their position to gain the advantage.
Headnote:(A) Transfer of Property Act, 1882 - Sections 63 and 64 - Indian Trusts Act, 1882 - Section 90 - Redemption of mortgage - Accessions to mortgaged property - Right of mortgagor to recover subordinate tenures acquired by mortgagee - Section 63 of the Transfer of Property Act cannot be read as entitling the mortgagor to recover acquisitions made by the mortgagee for his own benefit in circumstances which do not bring him within the scope of Section 90 of the Indian Trusts Act - Section 90 applies where a mortgagee, by availing himself of his position as such, gains an advantage in derogation of the rights of other persons interested in the property, or represents all persons interested in such property.
(B) Interpretation of "Accession" - The term "accession" under Section 63 of the Transfer of Property Act is not defined, but the section deals with accessions acquired at the expense of the mortgagee. It does not automatically cover all acquisitions made by a mortgagee for his own benefit unless the requirements of Section 90 of the Indian Trusts Act are met.
Facts of the case:
A mortgagor of proprietary rights in certain villages sought to redeem the mortgage. During the subsistence of the mortgage, the mortgagees, who were also co-sharers in the property, acquired occupancy rights in two specific fields. The mortgagor claimed these occupancy rights as accessions to the mortgaged property under the law, seeking their recovery upon redemption.
Findings of Court:
The occupancy rights were acquired by the mortgagees for their own benefit as co-sharers. There was no evidence or plea that the mortgagees availed themselves of their position as mortgagees to gain these advantages in derogation of the mortgagor's rights, nor did they represent all interested persons in acquiring the same.
Issues: Whether occupancy rights acquired by mortgagees during the mortgage period constitute "accessions" recoverable by the mortgagor upon redemption under Section 63 of the Transfer of Property Act, and the legal relationship between Section 63 of the Transfer of Property Act and Section 90 of the Indian Trusts Act.
Ratio Decidendi: Section 63 of the Transfer of Property Act does not grant a mortgagor the right to recover acquisitions made by a mortgagee for the mortgagee's own benefit unless such acquisitions fall under Section 90 of the Indian Trusts Act, which requires the mortgagee to have used their position as a mortgagee to gain the advantage.
Result: Appeal dismissed.
Legal Category Hierarchy
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property law
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mortgage
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redemption
- accessions
- lease renewal
- mortgagee obligations
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redemption
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mortgage
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trusts
- qualified owners
Judgement
Appeal (No. 2 of 1931), by special leave, from a decree of the Court of the Judicial Commissioner, Central Provinces (June 25, 1927), reversing a decree of the District Judge of Nimar (July 22, 1925), which reversed a decree of the Subordinate Judge of Khandwa.
The appeal was in a suit brought by the appellant to redeem a mortgage of a 4 as. share in two villages, Khandwa and Fatehpur, to the predecessors of respondents Nos. 1, 2 and 3. The appellant had acquired a 1 a. share in the mortgaged property in 1918. The respondents Nos. 1 to 3 were co-sharers in Khandwa.
The sole question arising in the appeal was whether occupancy rights in two fields (Nos. 451 and 452) in Khandwa, acquired by the mortgagees in 1915 and 1910 respectively, were recoverable upon redemption as being accessions to the mortgaged property within s. 63 of the Transfer of Property Act.
The facts of the case appear from the judgment of the Judicial Committee.
The Court of the Judicial Commissioner, reversing the decision of the District Judge and restoring that of the trial judge, held that in the circumstances of the case, the occupancy rights in question were not accessions to the mortgaged property.
1932. April 8, 11. De Gruyther K.C. and Parikh for the appellants.
Upjohn K.C. and Hyam for the respondents Nos. 1 to 3.
The arguments were as to the circumstances in which the occupancy rights had been acquired as appearing from the evidence, and as to the construction of s. 63 of the Transfer of Property Act, 1882, in relation to s. 90 of the Indian Trusts Act, 1882, reference being made to the two cases mentioned in the judgment.
May 24. The judgment of their Lordships was delivered by
SIR JOHN WALLIS. This appeal was originally before the Board on February 12, 1932, when, upon a preliminary objection taken by the appearing respondents, their Lordships agreed humbly to advise His Majesty that the certificate of the Court of the Judicial Commissioner of the Central Provinces admitting the appeal was wrongly granted but that special leave to appeal ought to be granted to the appellant upon lodging a petition for that purpose. This petition was duly lodged, and their Lordships report was approved by Order in Council of March 17, 1932.
The case, which comes here on appeal from a judgment and decree in second appeal, raises a question of some importance as to the right under the existing law in India of a mortgagor of proprietary rights to recover on redemption subordinate tenures acquired by the mortgagee during the subsistence of the mortgage. This question came before this Board in Kishendatt Ram v. Mumtaz All Khan (( 1879) L. R. 6 I. A. 145.), before the enactment in 1882 of the Indian Trusts Act and the Transfer of Property Act. In that case the mortgagee of the proprietary rights of a talukdar had acquired during the continuance of the mortgage certain subordinate tenures in the taluq known as birts, and their Lordships found on the facts of that case that the mortgagee, taking advantage of his position as de facto talukdar, had acquired the birts on very favourable terms and allowed them to merge in the taluq, and that it would be inequitable to allow him on redemption to revive the birts for his own benefit. They accordingly held that the mortgagor was entitled to redeem the estate as then enjoyed by the mortgagee on paying the original mortgage money plus the purchase money of the birts. They at the same time made it clear that they were not prepared to affirm the proposition that every purchase of a sub-tenure by the mortgagee must be held to have been made for the benefit of the mortgagor.
The judgment reads " Their Lordships are not prepared to affirm the broad proposition that every purchase by a mortgagee of a sub-tenure existing at the date of the mortgage must be taken to have been made for the benefit of the mortgagor, so as to enhance the value of the mortgaged property, and make the whole, including the sub-tenure, subject to the
