DIGAMBAR DAS Vs. HARENDRA NARAIN PANDEY

JUDGEMENT

(1.) The substantial question of law which calls for decision in this appeal relates to the precise limits of the right of subrogation of one of several joint mortgagors who has discharged the entire mortgage-debt. The events which have given rise to the controversy between the contesting claimants are matters of record and do not admit of any doubt or dispute. On the 18 July 1898, the respondent along with 4 other persons borrowed Rs. 6,500 from the appellant Digambar Das and another person by name Ram Ratan Tewari and executed usufructuary mortgage in their favour. Under the mortgage instrument, the principal amount was to carry interest at the rate of 24 per cent, per annum, but the mortgagees were to be placed in possession and were to receive the profits in lieu of the interest. No particular time was fixed for the repayment of the loan, but option was reserved to the mortgagors to pay or deposit in Court the entire principal in the month of Ashar in any year. On the 12 July 1902, the plaintiff deposited the entire amount of the principal in Court under Section 83 of the Transfer of Property Act, and on the 24 September 1904 commenced the action, the decree made wherein is now under execution. In this suit, he alleged that the mortgagees had purchased from one of the mortgagors his one-third share in the equity of redemption. The plaintiff consequently prayed for declaration that he had satisfied the entire mortgage debt, he had been subrogated to the rights of the mortgagees and was consequently entitled to a charge upon the shares of his co-mortgagors (one of them now represented by the mortgagees) and that till such charge was extinguished by repayment of the sum paid by him and interest thereon and costs, he was entitled to be placed in possession of the mortgaged properties. On the 30 December 1905, the Subordinate Judge made his decree in the suit in which he declared that the plaintiff had a charge to the extent of one third of the amount deposited by him upon the one-third share of the properties purchased by the mortgagees and that upon the failure of the latter to repay such sum within a specified time, the plaintiff was entitled to be placed in possession of that share. The Court further directed the mortgagees defendants in their character as representatives of one of the mortgagors to pay the plaintiff his costs of the suit. But the Court disallowed the claim of the plaintiff to interest upon the principal sum deposited by him and decreed in his favour. This decree was not actually signed till the fir February, 1906; but on the 27 January the defendant deposited in Court the decretal amount, and the Court directed notice of the deposit to issue on the plaintiff. The plaintiff subsequently appealed to this Court and on the 30 January 1908 a Division Bench (Sir Francis Maclean, C.J., and Mr. Justice Coxe) varied the decree so far as the question of interest was concerned. It was declared that the plaintiff was entitled to interest upon one- third share of the amount deposited by him at the rate of 24 per cent, per annum, as stipulated in the mortgage. It will be observed that neither the decree nor the judgment, whereon it was based, defines the point of time from which the interest was to run, nor the period during which it was to continue. On the 16 June 1908, the plaintiff applied for execution of the decree. He prayed that the defendant might be directed to pay him an one- third share of the amount deposited by him together with interest from the date of deposit to the date of realization, as also the cost of the litigation. He completely ignored in substance the amount brought by the defendant into Court on the 27 January 1906 and asked that the properties might be sold upon failure of the defendant to pay the decretal amount. It is not disputed that the prayer for sale is not authorised by the decree but the question is of no practical importance as the defendant has brought into Court whatever is alleged by the plaintiff to be due to him. The defendant, however, contests the right of the plaintiff to get any interest after the 27 January 1906, that is, after the date on which he paid, into Court the sum adjudged by the Subordinate Judge to be due to the plaintiff and this is the point in controversy between the parties. The District Judge has held on this question in favour of the plaintiff decree-holder. The defendant judgment debtor has now appealed to this Court, and on his behalf it has been argued that as the decree does not specify the period for which interest is to be allowed, it is vague and incapable of execution, and that, in any event, interest ought not to be allowed at the rate specified in the mortgage contract after the date of the deposit in the Court below which ought to be treated as a valid payment in partial satisfaction of the decree.

(2.) With regard to the first branch of this contention, we are of opinion that there is considerable force in it. It cannot be disputed that the decree of this Court is indefinite, inasmuch as it does not specify the period, during which the interest is to be allowed. It has been contended on behalf of the respondent that as the plaintiff claimed interest at the mortgage rate from the date of the payment made by him to the date of realization, the decree should be interpreted, in the light of the plaint and it ought to be held that the Court intended to decree interest for the period mentioned therein. We are unable however, to adopt this contention as sound, because, as observed in the judgment of the Subordinate Judge in the original suit, the plaintiff based his claim, not on the case as stated in the plaint but on general principles of law and especially on the doctrine embodied in Section 95 of the Transfer of Property Act. The decree, therefore, must be treated as indefinite, and up an a strict view of the law, the judgment-debtor would perhaps be entitled to succeed in his contention that the execution proceedings ought to be discharged on that ground alone. In our opinion, however, it would not be right in this case to adopt such a course, for it was conceded by the appellant that if his contention prevailed, it would be open to the decree-holder to apply at-once to this Court for review of the previous judgment, and as neither of the two learned Judges who originally heard the appeal is now a member of this Court, the application would, in ordinary course, be heard by this Bench as at present constituted. Under such circumstances, the litigation between the parties should not be needlessly protracted and we must consequently proceed to consider the precise extent of the right of subrogation of the respondent.

(3.) On behalf of the appellant judgment-debtor, it has been contended that although a co- mortgagor who redeems the mortgaged property acquires thereby a charge on the share of each of the other co-mortgagors in the property for his proportion of the expenses properly incurred in so redeeming, he is not entitled as a matter of right to claim interest either at the mortgage rate upon the amount of his deposit or from the date of his deposit to the date of realization of his dues from his co-mortgagors. In support of this argument reliance has been placed upon the decision of the Judicial Committee in the case of Malik Ahmad V/s. Samsi Jahan Begam 33 I.A. 81 : 28 A. 482 :10 C.W.N. 626 : 3 A.L.J. 360 : 3 C.L.J. 481 : 1 M.L.T. 143 : 16 M.L.J. 269 : 8 Bom. L.R. 397. It has further been argued on behalf of the appellant that the amount deposited on the 27 January 1905 ought to be treated as part payment of the sum determined as due under the decree of the High Court; and that whatever the rate of interest allowed by the Court may be, it ought, after that date, to run only upon the balance. In answer to these contentions, it has been argued on behalf of the decree-holder respondent, that as the co-mortgagor who redeems the mortgaged property is subrogated to the rights of the original mortgagee, he is entitled as a matter of right to interest at the mortgage rate from the date of deposit to the date of realization, and that as the whole amount determined as due upon this principle was admittedly not deposited in Court, he was not bound to accept such partial payment, especially as the acceptance of the smaller amount might be deemed a waiver on his part of the claim for interest and might thus practically frustrate his appeal to this Court. In support of this contention, reliance has been placed on the decisions of the Judicial Committee in Hewanchal Singh V/s. Jawahir Singh 16 C. 307 and Ram Chandra Marwari V/s. Rani Keshabati Kumari 36 C. 810 : 2 Ind. Cas. 935 : 19 M.L.J. 435 : 6 M.L.T. 1011 Bom. L.R. 765, 13 C.W.N. 1102 : 36 I.A. 85 : 6 A.L.J. 617 : 10 C.L.J. 1. To determine which of these contentions ought to prevail, it is necessary to examine the nature of the right of subrogation obtained by one of several joint mortgagors who redeems the mortgaged property by repayment of the entire debt.