Sayyid Mansur Ali Khan v. Babu Sarju Parshad BS651491

Sayyid Mansur Ali Khan v. Babu Sarju Parshad BS651491 PRIVY COUNCIL

Before:-Lord Watson, Lord Hobhouse, Sir Barnes Peacock and Sir Richard Couch.

0 D/d. 13.07.1886

Sayyid Mansur Ali Khan - Plaintiff

Versus

Babu Sarju Parshad - Defendant

On Appeal from the High Court at Allahabad.

For the Respondents :- Raikes, and Dunlop Hill, were not called upon.

Solicitors for Appellant :- T.L. Wilson & Co.

Solicitors for Respondents :- Oehme & Summerhays.

Regulation XVII of 1806, Sections 7 & 8 - Right to redeem - Regulation must be strictly followed.

[Para ]

In those parts of India where Bengal Regulation XVII of 1806 is in force the right to redeem a mortgage by conditional sale is governed entirely by the Regulation and not by the terms of the condition.

Where within a year after service of the notification of a foreclosure petition the mortgagor deposited the principal debt and interest for the last year, alleging that interest for the previous years was according to the condition to be recovered by separate suit:-

Held, that his suit for redemption must be dismissed. There had been default in payment of the interest due, and by sect. 8 the mortgage, notwithstanding the condition relied upon, had been finally foreclosed.

Appeal from a decree of the High Court (Jan. 23, 1883) reversing a decree of the Subordinate Judge of Gorakhpur (April 9, 1881).

The suit was for redemption of certain villages belonging to the Plaintiff which had been mortgaged by way of conditional sale without possession given to the Defendant, by the Plaintiff's deceased brother and predecessor in estate on the 14th of March, 1868.

There was no dispute as to facts, and the only question was as to whether on the due construction of the instrument of mortgage or conditional sale, it should be held that the deposit in Court made by the Plaintiff during the year of grace allowed by Regulation XVII of 1806, section 8, of a sum equal to the principal debt, and one year's interest was sufficient to entitle the Plaintiff to redeem, or whether he was not bound to deposit also the interest due for two preceding years, together with interest thereon.

The Subordinate Judge held the deposit made by the Plaintiff to be sufficient and gave him a decree accordingly for redemption.

The High Court held it was insufficient, and allowing the appeal, directed the suit to be dismissed with costs of both Courts.

Cowie, Q.C., and Doyne, contended that the deposit was sufficient to prevent foreclosure, according to the true construction of the instrument. The High Court was not justified, the Regulation did not authorise them, in adding to the terms of that instrument, and thus varying the conditions upon which the mortgage had been effected. Reference was made to Forbes v. Ameerunnissa Begum 10 Moore, Ind. App. Ca. 340-348, where the general law on the subject is stated.

Case Referred :-

Forbes v. Ameerunnissa Begum 10 Moore, Ind. App. Ca. 340-348.

JUDGMENT

The judgment of their Lordships was delivered by

Sir Richard Couch :- The suit which is the subject of this appeal was brought by the Appellant for the redemption of a mortgage made by his deceased brother, Sayyid Zahur Ali Khan, to whose estate the Appellant had succeeded by inheritance. The mortgage was by a conditional sale to the Respondent, dated the 14th of March, 1868, to secure the payment of Rs. 11,200 which had been borrowed by the mortgagor, and interest thereon at the rate of Rs. 1 4a. per cent, per mensem, being Rs. 1680. The condition was, that the interest should be paid annually for seven years, with compound interest if it was not paid at the stipulated periods, to be realised from the person and property of the mortgagor, and the principal sum of Rs. 11,200 and Rs. 1680 on account of interest for the last year was to be paid on the 6th Badi Chait (March 28, 1875). On the 23rd of April, 1875, after the expiration of the time fixed, the mortgagee filed a petition under the Bengal Regulation XVII of 1806, in which he claimed Rs. 17,304 7a. as due for principal and interest, being the principal sum and three years' interest and compound interest thereon. A notification was thereupon issued by the Judge according to the Regulation, but the service of it was not effected till the 20th of January, 1880. On the 17th of January, 1881, the mortgagor deposited in the Judge's Court Rs. 12,881, the principal sum and interest for the last year, with a petition alleging that the interest for the previous years was, according to the condition, to be recovered by a separate suit, and on the 20th of January, 1881, he brought this suit.

The Lower Courts have given judgments at considerable length upon the construction of the mortgage deed, the Subordinate Judge holding that the Appellant was entitled to redeem, and the High Court reversing that decision and dismissing the suit. It does not appear to their Lordships to be necessary to consider the construction of the deed. In the part of India where the Regulation is in force, the right to redeem depends entirely upon it. The words of Section 7 are, that where the mortgagee has not been put in possession of the mortgaged property (which was the case in this mortgage), the payment or established tender of the principal sum lent, with any interest due thereupon, shall entitle the mortgagor to the redemption of his property before the mortgage is finally foreclosed in the manner provided by the 8th section. That section gives the mortgagor one year from the date of the notification to redeem the property, and says that if lie does not do so in the manner provided by the 7th section, the mortgage will be finally foreclosed and the conditional sale will become conclusive. It could not be denied by the Appellant's counsel that much more than one year's interest was due. Indeed the arrear of interest had continued to increase from the 23rd of April, 1875, till the date of the deposit. The mortgagor had clearly not done what was necessary by the terms of the Regulation to entitle him to the redemption and for that reason their Lordships will humbly advise Her Majesty to affirm the decree of the High Court and to dismiss the appeal. The Appellant will pay the costs of it.