NANA SAKHARAM Vs. DADAJI RAMCHANDRA

JUDGEMENT

(1.) THIS special second appeal raises a very short but a very interesting point of law. On 19-5-1923, one Mangore mortgaged the property in suit to defendant 1 for Rs. 5000, It was a possessory mortgage and a rent note was executed by Mangore agreeing to pay rent to defendant 1, and under that rent-note Mangore continued to remain in possession of the property, On 31-12-1930, Mangore executed a second mortgage in favour of the plaintiff. The plaintiff then filed a suit to enforce his mortgage. He obtained a decree and in execution of the decree the plaintiff purchased the mortgaged property on 25-10-1937. The mortgagor continued to be in possession of the property from 1923 to 1930 and he did not pay any rent to defendant 1. Therefore in 1928 defendant l filed a suit to recover possession of the property and also arrears of rent A decree was passed in his favour in 1930 under which he obtained possession, but he did not execute the decree for rent. The plaintiff then filed the present suit from which this appeal arises for redemption of defendant 1's mortgage.

(2.) THE contesting defendant is defendant 2 to whom the mortgage was assigned by defendant 1, and the question which we have to consider is whether defendant 2 is entitled to claim from the plaintiff, as part of the mortgage debt which remains payable, the rent for the period 1923 to 1930 during which the mortgagor was in possession of the property. Defendant l being the mortgagee in possession is liable to account and he has to account for all rent recovered by him while he was in possession. The stipulation in the mortgage with regard to payment of interest is that the mortgagor was bound to pay interest at 10 per cent. The mortgage deed further goes on to stipulate that the mortgaged property has been given in possession of the mortgagee for five years for the satisfaction of interest. Then liberty is given to the mortgagee to let out the property to any person and the mortgagee is to recover his interest out of the rent which the property would realise. If the rent received falls short of the amount of interest, then the mortgagor is to make good the deficit. Mr. Kotwal's contention is that a mortgagee in possession is only bound to account for rents actually received. He is also bound to account on the footing of wilful default if owing to his negligence he fails to recover rents which he could have recovered. But according to Mr. Kotwal when the mortgagor himself is the tenant and the mortgagor fails to pay rent to the mortgagee, it could never be said that the mortgagee was in default in not recovering the rent from the mortgagor. The mortgagor cannot make use of his own default to charge the mortgagee with wilful default. That is a perfectly sound proposition of law and in support of that proposition authorities were cited at the bar which, in our opinion, it is unnecessary to consider, because the position is well established both in our country and in England. It has even been said that a mortgagee cannot be deemed to be in possession and liable to account as a mortgagee in possession if the mortgagor continues to be the tenant or if the mortgagor is in control in any sense of the term of the mortgaged property. Therefore, we accept Mr. Kotwal's proposition that in this particular case it cannot be said that the mortgagee is liable to account for rents from 1923 to 1930 because the property was in possession of the mortgagor and in fact no rents was paid by the mortgagor to the mortgagee. The mortgagee would only be liable to account. if in fact he had received rent from the mortgagor.

(3.) BUT, in our opinion, that is not the true or the correct approach to this case. If no rent had been received and nothing more had been done by the mortgagee, then in the redemption suit the mortgagee would be entitled to claim interest without giving any credit for the rent for the period 1923 to 1930. But the mortgagee actually sued the mortgagor for rent and he obtained a judgment in his favour. That judgment at the date of the filing of the redemption suit had become time-barred, and although that judgment was unenforceable, the mortgagee still contends that notwithstanding, the judgment and notwithstanding the fact that the judgment is unenforceable he is entitled to claim the full interest without giving any credit in repeat of the amount covered by the judgment. In our opinion, the true position in law is that when the mortgagee obtained judgment for rent against the mortgagor, the liability of the mortgagor to pay rent came to an end and that liability became merged in the decree of the Court. Therefore, as far as the liability to pay rent was concerned, that liability was satisfied and the claim of the mortgagee against the mortgagor was no longer in respect of rent but was in respect of a judgment debt. It would have been open to the mortgagee be enforce that judgment debt against the mortgaged property because in obtaining judgment what the mortgagee was doing was to recover part of his mortgage debt As the rent was to be credited to interest, in suing for rent he was enforcing his mortgage debt, and therefore when he obtained the judgment, that judgment was in respect of the mortgage debt. As that mortgage debt was secured on the mortgaged property, it would1 have been open to the mortgagee to proceed against the mortgaged property in respect of the judgment-debt. If, therefore, the decree which the mortgagee obtained had been an enforceable decree, it would be open to him. in the redemption suit be say,