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1929 Supreme(SC) 58
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BLANESBURGH, LORD TOMLIN, AND SIR BINOD MITTER.
SHIB CHANDRA - Appellant
Versus
LACHMI NARAIN - Respondents
On Appeal from the High Court at Allahabad.
Decided On : June 21. 1929.
Solicitor for appellants : H. S. L. Polak.
Solicitors for respondents: Douglas Grant & Dold.
Purchasers of the equity of redemption during pending litigation are bound by subsequent decrees under the principle of lis pendens. Additionally, mortgagees are entitled to include government revenue paid and interest thereon when calculating the total amount due for redemption.
Headnote:(A) Transfer of Property Act, 1882 - Section 83 - Redemption of mortgage - Sufficiency of deposit - Section 52 - Lis pendens - Purchasers of equity of redemption bound by subsequent decree in litigation pending at the time of purchase - Purchasers cannot acquire rights superior to those of their vendors.
(B) Mortgage - Government revenue - Mortgagees are entitled to add government revenue paid and interest thereon to the total dues for the purpose of ascertaining the amount required for redemption.
(C) Mortgage - Principal amount - Where the actual amount advanced is less than the amount stated in the mortgage deed, the reduction of the principal should be distributed proportionately over each item of property specified for redemption.
Facts of the case:
A mortgage was executed for a stated principal sum. A suit for recovery of interest and lease money was filed, resulting in a decree. While an appeal against this decree was pending, the mortgagors sold the equity of redemption in certain properties to the respondents. The purchasers deposited a sum in court under Section 83 of the Transfer of Property Act to redeem the properties. The dispute centered on whether this deposit was sufficient, given that the appellate court subsequently increased the decretal amount and it was found that the actual principal advanced was less than the amount stated in the mortgage deed.
Findings of Court:
The court held that the purchasers were bound by the appellate court's increase in the decree because the sale took place during the active prosecution of litigation, invoking the principle of lis pendens. It further determined that the mortgagees were entitled to include government revenue and interest thereon in the total dues. Although the court agreed that the principal sum should be reduced proportionately across the properties, the final calculation revealed that the deposit made by the purchasers was insufficient.
Issues: Whether the deposit made by the purchasers under Section 83 of the Transfer of Property Act was sufficient for redemption, specifically considering the impact of a subsequent appellate decree, the proportionate reduction of the principal, and the inclusion of government revenue.
Ratio Decidendi: Purchasers of the equity of redemption during the pendency of litigation are bound by the result of such litigation and cannot have higher rights than their vendors. Additionally, under the general law of mortgage, mortgagees who pay government revenue are entitled to add such sums and interest thereon to the total amount due for redemption.
Result: Decrees of the High Court set aside and cases remitted for the ascertainment of the sum due to the mortgagees.
Legal Category Hierarchy
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property law
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mortgage
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redemption
- sufficiency of tender
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transfer of property act
- lis pendens
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redemption
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mortgage
Judgement
Consolidated Appeals (Nos. 126 and 127 of 1926) from two decrees of the High Court (December 11, 1923) reversing two decrees of the Subordinate Judge, Moradabad.
The two suits giving rise to the appeals were brought by the respondents to redeem two separate properties which with other properties were the subject of a mortgage dated March 25, 1905. The plaintiffs-respondents had purchased the properties in suit in 1912 from the mortgagors. The issue arising was whether a deposit made by the plaintiffs under the Transfer of Property Act, 1882, s. 83, was sufficient.
The trial judge held that the deposit was sufficient, but the High Court reversed that decision.
The facts appear from the judgment of the Judicial Committee.
1929. May 13, 14. Dunne K.C. and Dube for the appellants.
De Gruyther K.C. and Parikh for the respondents.
June 21. The judgment of their Lordships was delivered by
SIR BINOD MITTER. These are two consolidated appeals against two decrees dated December 11, 1923, of the High Court of Judicature at Allahabad, setting aside two decrees dated January 18, 1921, of the Court of the Subordinate Judge, Moradabad.
The two suits in which the decrees of the High Court were passed were brought by the plaintiffs-respondents separately against the appellants to redeem two items of properties covered by a mortgage dated March 23, 1905—namely, 13 biswas of the village Sadat Bari and the whole village Rudain, respectively, and the question for determination now is whether the deposit made by the plaintiffs under s. 83 of the Transfer of Property Act on June 29, 1912, was sufficient.
On March 23, 1905, the original mortgagors executed a mortgage deed in favour of the appellant Shib Chandra and another who, on the same day executed a lease in favour of the mortgagors in respect of the mortgaged premises and under that lease the mortgagors agreed to pay Rs. 2325 in two instalments per annum (which also was the agreed amount of interest under the mortgage deed), together with the sum of Rs. 1526 as Government revenue on the properties. It was agreed that if there was any deficiency in the payment of interest or lease money then the amount should carry compound interest at the rate of 1 Re. percent, per mensem. It was provided by the mortgage deed that each property could be separately redeemed in the month of June of any year on payment of the amount entered against it in the deed provided always that the interest on the whole mortgage money had been paid or tendered at the time of such redemption. The consideration stated in the mortgage deed was Rs. 35,000. The only sum the mortgagors ever repaid was Rs. 1000 in January, 1907.
On January 14, 1910, the mortgagees brought a suit in the Court of the Subordinate Judge of Moradabad (hereinafter referred to as the original suit) against the mortgagors for recovery of Rs. 12,327-5, being the interest or lease money up to June, 1909, together with compound interest at 12 per cent, per annum as provided for in the mortgage deed and in the lease. The mortgagees further claimed interest pendente lite and interest up to realization, and they also prayed for sale of the mortgaged properties in default of the payment of the amount that might be decreed in their favour and claimed possession of the mortgaged premises. The mortgagors contended that the whole of the Rs. 35,000 mentioned in the mortgage deed had not been advanced, but that a sum of Rs. 30,984 was only advanced and that the interest payable on the mortgage or the lease money should be proportionately reduced.
On February 23, 1912, the Subordinate Judge decided that the sum actually advanced was Rs. 30,984, and that, therefore, the amount of annual interest or lease money was Rs. 2058-3-6 and not Rs. 2325, as stated in the mortgage deed and the lease. He accordingly passed a decree for Rs. 10,720-10-4 and interest thereon at the rate of 6 per cent, per annum until realization with costs amounting to Rs. 1770-2-8. He also g
