MATHEVI BHARGAVI Vs. AYYAPPAN KOCHAN

JUDGEMENT

(1.) This Second Appeal is by the first defendant and it arises out of a suit for redemption of a mortgage, Ext. A dated 6-10-1006. Out of the total consideration of 13300 fanams under Ext. A, a sum of 3500 fanams was reserved with the mortgagee to be paid to the mortgagor later. It was provided in the mortgage deed that the mortgagee should pay to the mortgagor interest at the rate of 10 1/2 per cent per annum on this sum till it was paid. The mortgage right vested in defendants 1 and 2 on the date of suit. There was a partition in the mortgagors family and the plaintiff acquired under Exts. B, C and E to K the equity of redemption from the several members who got the same. According to the plaintiff, neither the principal nor interest on the sum of 3500 fanams was paid by the mortgagees and he claimed that interest on the unpaid mortgage money being in excess of the amount actually paid under the mortgage, he was entitled to redeem and obtain possession without making any payment to the defendants. He also claimed mesne profits at the rate of 200 paras of paddy per annum. The first defendant resisted the suit denying the plaintiffs title to redeem and contending that interest on 3500 fanams was being regularly paid and that the plaintiff was liable to pay 9800 fanams as mortgage money in addition to the value of improvements effected by the mortgagees. The right to set off interest on 3500 fanams against the mortgage money was also repudiated. The Trial Court upheld the defendants contention except as regards payment of interest and allowed the plaintiff to redeem the mortgage on payment of 9800 fanams as mortgage money and Rs. 324-12-0 as value of improvements. The plaintiff preferred an appeal to the District Court and the learned District Judge held that the plaintiff was entitled to set off interest on 3500 fanams against the mortgage money actually paid and value of improvements. The plaintiff was accordingly given a decree for redemption without payment of any sum. The plaintiff was also allowed to recover interest on 3500 fanams at 6 per cent per annum from 27-7-1953, the date on which the mortgage money and value of improvements were extinguished in full by setting off the interest. The first defendant has therefore preferred this Second Appeal.

(2.) The only question raised in Second Appeal is whether the plaintiff is entitled to set off interest on the sum of 3500 fanams against the sum due to the mortgagees The Trial Court found that the defence plea that interest was being paid on this sum was not true and that finding has become final. It was urged on behalf of the appellant that the unpaid mortgage money and interest should have been treated as an independent transaction which could not be taken in the accounting and further that it was a personal right of the mortgagor which could not and was not conveyed to the plaintiff.

(3.) The nature of the mortgage transaction shows that the profits of the mortgaged properties were to be appropriated by the mortgagee towards interest on the sum of 13300 fanams and that so long as the sum of 3500 fanams remained unpaid, the mortgagee was to pay interest thereon at 10 1/2 per cent per annum. Thus the arrangement was that out of the profits of the properties interest on 3500 fanams was to be paid to the mortgagor until the said sum was paid and that till then the mortgagee was to be satisfied with the rest of the profits of the properties. It has been found that the sum of 3500 fanams has not been paid by the mortgagee. This case is thus analogous to eases in which the mortgagee is directed by the contract of mortgage to pay a fixed sum out of the profits to the mortgagor. The decisions relied on by the appellant in support of his contentions do not apply to the facts of this case. Raghubar Narayanan v. Mohit Narayanan (AIR 1929 Patna 37) was a case in which the question was whether the mortgagee was liable to account tor Malikana which he was directed to pay to strangers and which he had not paid. It was held that he was not. It was also pointed out that the position would have been different if the Malikana was payable to the mortgagors. The same view was held by the Travancore-Cochin High Court in Kochukunju v. Sankara Pillai (AIR 1954 T-C 53) and by the Madras High court in Paru Amma v. Kelu Kurup ( AIR 1941 Mad. 549 ). What was held in Wahid Ali v. Biptu Chamar (AIR 1935 Patna 125) was that in the case of usufructuary mortgage, if the mortgagor has not received full consideration, he cannot if he has parted with possession claim a return of the proportionate extent of land and mesne profits accruing thereon. Another decision relied on by the appellant is Sundaram Aiyar v. Mannadiar ( AIR 1947 Mad. 197 ). The mortgage in that case was not fully supported by consideration and the plaintiff who sued for redemption contended that in taking of accounts the mortgagee should be compelled to credit towards the principal the proportionate share of the rents and profits in view of the fact that the whole consideration under the mortgage had not been paid. No rate of interest was mentioned in the mortgage deed and it was held that it was not possible to say that any particular sum was due as interest. It was further held that the transaction was one under S.77 and not S.76 of the T. P. Act. The case was however decided on another point, namely, that the plaintiff who had purchased the equity of redemption in court sale could not be deemed to have acquired the rights of the mortgagor to recover damages for non payment of the mortgage money in full. The learned Judges observed: