The main legal point established in the judgment is the requirement for mortgagees to maintain proper accounts as per the provisions of the Transfer of Property Act, and the need for reliable evidence to support such accounts.

Odgers, J.

1. This is an appeal against the final decree of the Subordinate Judge of Salem in a mortgage suit. By Ex. A, dated 24th August 1886, one Jules Sice, who was a coffee planter in the Shevaroy Hills mortgaged certain property, namely, 1/2 of the Tanny Pandal Estate and the whole of the St. Josephs Estate, to one Lob Levyt. In 1892 Jules Sice, the mortgagor, died. His widow, sons and daughters are the defendants in this case. On the 31st July 1908, Madame Sice, the widow of Jules Sice entered into a contract, Ex. B, with one Mr. Fritz Gaebele, by which the latter undertook to work the coffee estate and to furnish the necessary money for it, which latter should bear interest at 8 per cent. Mr. Fritz Gaebele was to be treated as the first mortgagee of the estate for Rs. 24,000 and was to work the plantation without any interference from the defendants. The agreement provided that an account and inventory should be taken on the 1st March every year and that after providing for certain charges the profits should be divided by allotting 60 per cent. to the hypothecation debt 25 per cent. to Madame Sice, and her heirs and 15 per cent. for management. The contract was to last for ten years i.e., up to 1918. In 1909 Fritz Gaebele paid off Levyt and took an assignment of the latters mortgage rights by Ex. C, and on the 22nd June 1910, an English mortgage was entered into by Madame Sice in , favour of Gaebele. This deed recited that Gaebele had advanced Rs. 15,200 making with the sum Rs. 13,200 paid to Levyt Rs. 28,400. It is, however, conceded that the sum of Rs. 15,200 was never in fact paid. Now it is admitted by both sides that Fritz Gaebele is in the position of a mortgagee in possession and the suit was brought for a sum of Rs. 49,877 on the footing of Ex. D. The plaintiff prayed that there might be a decree for foreclosure and that the defendants be directed to put the plaintiff in possession of the properties, the defendants having, according to the plaintiff, taken possession of the properties after the agreed period which expired on 30th October 1918 the suit having been filed on 14th December 1918.

2. In the preliminary judgment the Subordinate Judge held that Ex. D was not supported by consideration to a larger extent than Rs. 13,200, that the plaintiff under Ex. D, was in the position of a mortgagee in possession and that he was bound to account for the income of the properties ; further that the defendants are entitled to re-open the settlement of accounts of the plaintiffs management. There was a decree for foreclosure and an account to be taken of what was due to the plaintiff for principal and interest on the mortgage. In giving directions for the account the learned Subordinate Judge directed that the principal due on the mortgage would be taken at Rs. 13,200 and accounts taken and usual adjustments made out of the profits according to Ex. K till the date of Ex. D, i.e., 22nd June 1910, and thereafter under the terms of Ex. D with due regard to Section 76 of the Transfer of Property Act. The accounts were referred to a commissioner from whose report it is seen that the plaintiff produced certain books of account; that he summoned two witnesses who were not examined ; that books, Exs. P and Q were written from subsidiary books not produced ; that the entries in Exs. P and Q could not, therefore, be verified ; and the entries gradually dwindled into one or two entries a month and practically became a monthly extract. The produce-accounts, Exs. N and O, did not contain any explicable abstracts as to the disposals and balance in stock at the end of each year. It was, therefore, not possible to arrive at the balance of coffee in stock at the end of each year. Ex. M, the cash account, up to 1915 does not help in this respect and there is no cash account from 1915 to 1918. Again management is entered in the ledger at 20 per cent. instead of 15 per cent. as per Ex. K. The advances made by Fritz Gaebele and the am