Banarsi Parshad v. Ram Narain BS650517

Banarsi Parshad v. Ram Narain BS650517 PRIVY COUNCIL

Before:-Lord Macnaghten, Lord Lindley, Sir Andrew Scoble, Sir Arthur Wilson and Sir John Bonser.

0 D/d. 6.2/ 25.03.1903.

Banarsi Parshad - Defendant

Versus

Ram Narain - Plaintiff

On Appeal from the High Court at Allahabad.

The respondents did not appear.

Solicitors for Appellant :- Barrow, Rogers & Nevill.

Mortgage Possession

Appeal from a decree of the High Court (Nov. 23, 1899) reversing a decree of the Subordinate Judge of the same place (June 11, 1896).

The plaintiffs alleged that on September 8,1884, they borrowed from the defendant Rs. 1551, and executed, in his favour,a mortgage of certain villages and a house for a term of seven years, with an extension of five years of if so agreed and gave the defendant possession accordingly; that it was stipulated in the mortgage deed that the income of the mortgaged villages should be collected according to the rent-roll, and that from this source the mortgagee should pay (1) the Government revenue; (2) a sum o Rs. 8000 a year to himself, as interest and for the expenses of the mortgaged villages ; and (3) should pay the balance to certain native bankers to whom the mortgagor were indebted. They further alleged that the entire mortgage money had been paid off in the first year of the mortgage, and that they were entitled to redeem without further payment.

They prayed for the following reliefs: that they should be declared to entitled to redeem the mortgaged villages with out paying the mortgage money; that the defendant should be ordered to render accounts to the plaintiffs of the receipts and disbursements of the mortgaged villages from the date of his possession to the date of the plaint; that the defendant should be put them in possession thereof on a date to be fixed by the Court.

The Subordinate Judge held that under the construction of the deed the mortgages was liable, not merely for actual collections, but for sums shewn in the gross rent-roll of the villages, and that accordingly nothing was due to him. The District Judge dismissed the suit, deciding that the mortgage was holding under an unexpired term, and that no notice of redemption had been given; further, that he had not accepted the onerous conditions as to gross rent-roll imputed to him. The High Court upheld the judgment of the First Court. Under the construction of the mortgage deed, the mortgagee is responsible for the rents of the tenants as they are to be found in the jamabandi. He cannot cover himself by denying that he had actually collected the whole amount. He was bound to give the mortgagors credit for the gross rents as the appear in the jamabandi. Upon this construction of the deed it is clear from the judgment of the Court of first instance that the mortgagee had long ago paid himself, and it does not lie in his mount to claim the advantage of notice of redemption.

Ross, for the appellant contended in the first place that the suit was premature, inasmuch as at its date the additional five years of the term allowed had not expires; and under the terms of the deed the respondents were not entitled to redeem except on payment of the mortgage money and on giving notice of their intention to redeem before suing for that purpose. The High Court was wrong in adopting the construction that under the deed the mortgage was liable to account for all rents as specified in the rent-roll, without regard to sums actually or constructively received. Such a construction was unreasonable, and ought not to be resorted to unless the words used plainly required it. On the true construction of the deed there was nothing to alter the ordinary accountability of a mortgagee, or to throw upon him any unusual of extravagant liability; and see Shah Mukhun Lall v. Sreekishen Singh (1868) 12 Moore's Moore's Ind. Ap. Ca. 157. as to the onus probandi upon the issue whether mortgagees in possession have been paid in full. The suit should be remanded for the usual accounts to be taken.

Case Referred :-

Shah Mukhun Lall v. Sreekishen Singh (1868) 12 Moore's Moore's Ind. Ap. Ca. 157.

JUDGMENT

The Judgment of their Lordships was delivered by

25.3.1903

Lord Macnaghten:- This is an appeal ex parte from a decree of the High Court at Allahabad reversing a decree of the District Judge of Bareilly and restoring the decree of the Subordinate Judge.

The Plaintiffs, who are now represented by the Respondents, claimed to redeem without payment a mortgage held by the Appellant over certain villages and a shop which belonged to them.

The mortgage was dated the 8th of September 1884. It was expressed to be for a term of seven years, with an extension of five years more if both parties agreed. On the execution of the mortgage the mortgagee entered into possession of the mortgaged premises, and continued in possession until apparently a receiver was appointed in the suit. The mortgage-deed is a very obscure document, confused throughout and in places contradictory. It partakes of the character of an agency or receivership deed as well as of the character of a usufructuary mortgage. The two purposes of the deed are so mixed up together that it is difficult, if not impossible, to determine the rights of the parties with anything like certainty. The Subordinate Judge and the High Court both came to the conclusion that the meaning of the deed was that the amount of the gross rental as shown in the jamabandi or rent-roll, whether actually realised or not, was to be taken as the income for which the mortgagee in possession was to be responsible.

This view does not seem to have been presented by the Plaintiffs themselves. Indeed, the point was not taken in the pleadings at all. It appears to have been an inference drawn by the Subordinate Judge from certain expressions found in the mortgage deed, which are by no means clear. On this footing the Subordinate Judge determined that the mortgage had been discharged and gave the Plaintiffs a decree without determining the issues raised in the suit. The District Judge, on the other hand, thought that was not the meaning of the document, and went so far as to say that no sane man of business would have assented to such an arrangement. He dismissed the plaint with costs on the ground that the mortgagee was entitled to hold the mortgaged property for the extended term under an agreement alleged but not proved, and the subject of one of the issues on which no finding was pronounced. He further held that during that extended term the mortgagors were not entitled to any accounts.

Their Lordships are unable to agree either with the District Judge or the High Court. They do not think that the mortgagee was intended to be responsible for the rent-roll in the jamabandi under all circumstances. On the other hand, they cannot doubt that under such a deed as that on which the suit is founded the principal must be entitled to call upon his agent to furnish accounts of receipts and payments.

Possibly if the evidence which appears to have been before the Subordinate Judge had been available on the appeal, their Lordships might have been able to arrive at a decision on the merits. As it is, there is no evidence before their Lordships on which it is possible to come to any conclusion--all their Lordships can do is to express their dissent from the judgment of the High Court as well as from the judgment of the District Judge and to remit the case to the Subordinate Judge with such directions as seem to them to be necessary under the circumstances.

In their Lordships' opinion the proper order will be as follows :-

Order the Appellant to bear his own costs of this appeal.

Discharge the decrees of the High Court and of the District Judge without costs.

Discharge the decree of the Subordinate Judge, the costs of the hearing before him to be costs in the cause.

Remit the suit to the Subordinate Judge.

Declare that according to the true construction of the mortgage-deed of the 8th of September 1884, the Defendant, the mortgagee, is not responsible for the amount of the gross rental as shown in the jamabandi, but only for such sums as were actually received by him or on his behalf, and such sums if any, as might have been received by him but for his own neglect or fault.

Take an account of the Defendant's receipts and payments under the said mortgage-deed, and let the ultimate balance due to or from the Defendant be certified.

Enquire what, if anything, was due to or from the Defendant in respect of the said mortgage at the date of the commencement of the suit, and what was the amount, if any, in the hands of the Defendant at that time.

Let the ultimate balance be paid to the party to whom it shall appear to be due within such time as the Judge shall direct, and let the costs of the suit be borne and paid by the Defendant if it shall appear that nothing was due to him in respect of the said mortgage at the date of the commencement of the said suit, but if it shall appear that at that time anything was due to the Defendant in respect of the said mortgage, let the costs of the suit be borne and paid by the Respondents.

Their Lordships will humbly advise His Majesty accordingly.