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1962 Supreme(Pat) 59
PATNA HIGH COURT
Kanhaiya Singh and Ramratna Singh JJ.
Shivajee Prasad Sahu
Versus
Mahanth Darsan Das
Appeal from Original Decree No. 146 of 1957 ;
Decided On : MAY 11, 1962
Non-payment of rent by a mortgagor-tenant amounts to dispossession of the mortgagee and the mortgagee is entitled to sue for the mortgage money.
Headnote:
MORTGAGE - Usufructuary mortgage - Lease back - Whether relationship of mortgagor and mortgagee merged into that of landlord and tenant - Non-payment of rent - Whether amounts to dispossession of mortgagee - Order 2, Rule 2 of the Civil Procedure Code - Whether a bar to a subsequent suit for mortgage money.
Fact of the Case:
The appellant and respondents 2 to 4 executed a usufructuary mortgage bond in favor of the plaintiff-respondent No. 1 on the 19th June, 1942 for Rs. 20,000.00 bearing interest at the rate of eight annas per cent per mensem, and in lieu of interest they put the mortgagee in possession of a house situated in the town of Muzaffar-pur which they hypothecated as security for the loan. Each of the four mortgagors had one-fourth share in this property; and it was stipulated in the bond that even one of the mortgagors would be entitled to get his share in the house released on payment of his quota of the mortgage money, that is, Rs. 5,000/-. The due date of payment of the mortgage dues was the 3Oth Baisakh 1352 Fasli, which expired long before the institution of the suit.
Finding of the Court:
The court held that the usufructuary mortgage bond and the lease back formed part of one and the same transaction and that the dominant intention underlying these documents was to provide a security for the mortgage loan and not to merge the relationship of the mortgagor and the mortgagee into that of landlord and tenant. The court further held that the non-payment of rent by the appellant amounted to dispossession of the mortgagee and that the claim for mortgage money was not barred by Order 2, Rule 2 of the Civil Procedure Code.
Issues: 1. Whether the relationship of mortgagor and mortgagee merged into that of landlord and tenant? 2. Whether non-payment of rent amounts to dispossession of mortgagee? 3. Whether the claim for mortgage money is barred by Order 2, Rule 2 of the Civil Procedure Code?
Ratio Decidendi: 1. The court held that the usufructuary mortgage bond and the lease back formed part of one and the same transaction and that the dominant intention underlying these documents was to provide a security for the mortgage loan and not to merge the relationship of the mortgagor and the mortgagee into that of landlord and tenant. The court relied on the recitals in the mortgage bond and the Keraiyanama to conclude that the two transactions were part of one and the same transaction. 2. The court held that the non-payment of rent by the appellant amounted to dispossession of the mortgagee. The court relied on the fact that the rent was payable in lieu of interest on the mortgage loan and that the mortgagee was entitled to possession of the mortgaged property until the mortgage debt was discharged. 3. The court held that the claim for mortgage money was not barred by Order 2, Rule 2 of the Civil Procedure Code. The court held that the cause of action for recovery of rent arose every month on the basis of the karaiyanama when the rent was in arrear, whereas the cause of action to sue for the mortgage money on account of dispossession arose whenever there was default in payment of rent for three consecutive months.
Final Decision: The appeal was dismissed and the cross-objection was allowed. The decree of the lower Court was confirmed with the modification that it will be a mortgage decree for the amount decreed. The appellant was directed to pay the decretal dues within a period of six months from the date of the judgment and, on his failure to do so, the dues will be realized by sale of the appellant's one-fourth share of the mortgaged property.
Ramratna Singh, J.
1. This appeal is by one of the defendants in a mortgage suit. The appellant and respondents 2 to 4 executed a usufructuary mortgage bond in favour of plaintiff-respondent No. 1 on the 19th June, 1942 for Rs. 20,000.00 bearing interest at the rate of eight annas per cent per mensem, and in lieu of interest they put the mortgagee in possession of a house situated in the town of Muzaffar-pur which they hypothecated as security for the loan. Each of the four mortgagors had one-fourth share in this property; and it was stipulated in the bond that even one of the mortgagors would be entitled to get his share in the house released on payment of his quota of the mortgage money, that is, Rs. 5,000/-. The due date of payment of the mortgage dues was the 3Oth Baisakh 1352 Fasli, which expired long before the institution of the suit.
The mortgagors took a lease back of the house for three years from the 19th Asarh 1349 Fasli, corresponding to the 17th July, 1942, A. D. and a Keraiyanama was executed by them on the 24th September 1942. The rent payable was Rs. 100.00 per month, Rs. 25/- being the quota of each of the mortgagors. Even after the expiry of the term of the lease, the defendants continued to occupy the house and paid rent to the plaintiff-respondent at the stipulated rate. Three of the mortgagors, namely, defendants 1, 3 and 4, who are respondents 2 to 4 paid off their quotas of the mortgage money as well as of the rent; and thereafter only defendant No. 2, who is the appellant, has been holding over his share in the house, as he has not yet paid his quota of the mortgage dues.
A suit for arrears of rent from April 1953, to August 1954 was instituted against the appellant in the first Court of the Munsif at Muzaffarpur, and it was pending on the date the present suit was filed. The rent had not been paid by him even thereafter and in the present suit rent at the rate of Rs. 25/- per month from September 1954 to February 1955 with interest at one per cent, per month has been claimed, the stipulated rate of interest payable on the rent being two annas per rupee per month. A further relief was sought for recovery of the unpaid balance of the mortgage money on the ground that non-payment of rent amounted to dispossession of the mortgagee, by sale of the entire mortgaged property in view of the stipulation in the bond that, for any outstanding balance of the mortgage dues, the entire mortgage property would remain mortgaged to the mortgagee.
2. Each of the defendants filed a separate written statement; but their defence was substantially the same. It was alleged that the shares of the defendants 1, 3 and 4 in the house could not be held liable for the dues against defendant No. 2, the appellant. Another defence was that the plaintiff could not sue for the mortgage money, inasmuch as non-payment of arrears of rent does not amount to dispossession. The last plea taken was that the claim for the mortgage money was barred by the provisions of Order 2 Rule 2 of the Civil Procedure Code, because it was not included in the previous suit for arrears of rent.
3. The learned Subordinate Judge dismissed the suit against defendants 1, 3 and 4 and granted a decree for money in respect of the mortgage clues and the arrears of rent against the appellant alone. Though he found that according to the stipulation in the mortgage bond, the plaintiff was entitled to enforce the charge against the entire mortgaged property for realisation of the balance mortgage money, a mortgage decree for sale could not be passed inasmuch as there was no such stipulation.
4. The learned advocate for the appellant challenged the judgment and the decree of the trial Court on the ground that the mortgage money could not be recovered in the present suit, firstly, because the non-payment of rent by the appellant did not amount to dispossession of the mortgagee and, secondly, because the claim nor mortgage money is barred by the provisions of Orde
