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1940 Supreme(Cal) 137
CALCUTTA HIGH COURT
Nasim Ali, J., Narsing Rau, J.
Panchanan Mandal & Anr. - Appellant
Versus
Sashi Bhusan Pradhan & Ors. - Respondent
Decided On : 15-02-1940
The main legal point established in the judgment is the interpretation of a usufructuary mortgage and the impact of additional covenants on its nature, as well as the constitutional validity of Section 26G in relation to existing Indian law.
Headnote:
usufructuary mortgage - Ben. Ten. Act, Section 26G - [Section 26G] - The court discussed the definition of a usufructuary mortgage and its elements, including the intention to extinguish both principal and interest, possession and authorization to receive rents and profits. The court also considered additional covenants in the mortgage and their impact on the nature of the mortgage. The judgment referenced previous cases to support its interpretation of the mortgage type and its elements.
Fact of the Case:
The petitioners executed a usufructuary mortgage for a loan, and after more than fifteen years, they applied to be restored to possession of the holdings. The Munsiff dismissed the application, leading to the present rule against this order.
Finding of the Court:
The court found that the mortgage in question was a usufructuary mortgage, despite certain additional covenants, and upheld the petitioners' application for restoration of possession.
Issues: The issues involved the interpretation of the nature of the mortgage, the impact of additional covenants, and the validity of Section 26G as an enactment of the Provincial Legislature.
Ratio Decidendi: The court interpreted the elements of a usufructuary mortgage and considered the impact of additional covenants on its nature. It also analyzed the constitutional validity of Section 26G in relation to existing Indian law.
Final Decision: The court made the rule absolute, granted the petitioners' application, and restored their possession of the mortgaged holdings.
JUDGMENT
Narsing Rau, J. - The petitioners executed a usufructuary mortgage of certain occupancy holdings in favour of the predecessor in interest of the opposite parties on 5th March 1923 by way of security for a loan of Rupees 1750, the stipulation being that the mortgagee should enjoy the usufruct in lieu of interest. The deed was registered on 6th March 1923. On 10th March 1939 they applied to the Munsiff of the second Court at Contai u/s 26G, Ben. Ten. Act, to be restored to possession of the holdings, more than fifteen years having elapsed since the registration of the mortgage. The Munsiff dismissed the application of 12th July 1939. The present rule is directed against this order. Sub-section (5) of Section 26G, under which the application was made, runs thus:
Notwithstanding anything contained in this Act or in any other law or in any contract, the consideration (with all interest thereon) for a complete usufructuary mortgage or for another form of usufructuary mortgage deemed under Sub-section (1a) to have taken effect as a complete usufructuary mortgage, entered into by an occupancy raiyat in respect of his holding or a portion or share thereof, shall be deemed to have been extinguished on the expiry of the period (a) mentioned in the instrument of the mortgage, or (b) of fifteen years, whichever is less, from the date of the registration of the instrument, or where there is no registered instrument, from the date of the mortgagee's entry into possession, and the mortgagor shall thereupon become entitled to possession of the mortgaged holding, and he may, if he is not forthwith given possession, apply to the Court or to a revenue-officer to be restored thereto:
Provided that, if in the case of such mortgage subsisting, on or after the first day of August 1987 the said period has, on the date of the commencement of the Bengal Tenancy (Amendment) Act 1938, already expired, the mortgagor shall, immediately on the commencement of the said Act, become entitled to possession of the mortgaged holding, but he shall not be entitled to, nor shall the mortgagee be liable for, any compensation in respect of the mortgagee's possession from the date of the expiry of the said period to the date of the commencement of the said Act.
2. The mortgage in the present case was not a "complete usufructuary mortgage," as defined in Section 3(3), Ben. Ten. Act, because the usufruct was not intended to extinguish both principal and interest, but only the interest. We have however to take into account Sub-section (1a) of Section 26G, which provides that
every usufructuary mortgage subsisting on or after the first day of August 1937, which was so entered into before the commencement of the Bengal Tenancy (Amendment) Act 1938, shall be deemed to have taken effect as a complete usufructuary mortgage for the period mentioned in the instrument OE for fifteen years whichever is less.
3. We have therefore to consider whether the mortgage in this case was a usufructuary mortgage within the meaning of this sub-section. There is no special definition of a usufructuary mortgage in the Bengal Tenancy Act and we may accordingly assume that the term is to be understood in. the sense defined in Section 58(d), T.P. Acts. The relevant part of this definition runs:
Where the mortgagor delivers possession...of the mortgaged property to the mortgagee and authorizes him to retain such possession until payment of the mortgage money and to receive the rents and profits accruing from the property...and to appropriate the same in lieu of interest...the transaction is called a usufructuary mortgage.
4. All these elements are present in the mortgage now under consideration, but the Munsiff has taken the view that, as certain additional elements are also present, the mortgage is an anomalous mortgage and not a usufructuary mortgage. These additional elements are : (a) a covenant that the mortgagor would pay the rent of the mortgaged land and that if on any occasion the mortga
