BALBHADDRA UPADHYA Vs. SHEOMANGAL

JUDGEMENT

(1.) The suit was for sale on foot of a mortgage of 1 June 1916. Other transactions with respect to the property were a usufructuary mortgage by the mortgagor in favour of the defendant-appellant Balbhaddar dated 27 May 1912, which was prior to the deed in suit and another usufructuary mortgage of 30th August 1921, which was subsequent to the mortgage in suit. There was a dispute in the Subordinate Court as to the second mortgage which was in favour of Balbhaddar; ostensibly it is in favour of his grandsons. There is the finding in favour of the plaintiff that the real mortgagee was Balbhaddar, That is a finding of fact, so it may be assumed for the purposes of this appeal that the second mortgage also was in favour of Balbhaddar. Under the second mortgage out of the entire consideration of Rs. 1425, Rs. 790 was left with the mortgagee to pay to the plaintiff of the present suit, and Rs. 499 towards the 1912 mortgage. Balbhaddar did not pay off the plaintiff, and that is the reason for the plaintiff's present suit. In this case he held up the usufructuary mortgage of 27 May 1912, as a shield and pleaded that the property can be sold only subject to his prior charge of Rs. 499 under the mortgage of 1912. The plaintiff's contention was that having regard to the terms between the mortgagor and Balbhaddar of the transaction of 30 August 1921, the property must be sold in execution of his decree free of encumbrance. The plaintiff prevailed in both the Subordinate Courts and hence Balbhaddar has instituted this second appeal.

(2.) The defendant-appellant's counsel rightly urged that the question was one of intention; his further argument was that in the present case Balbhaddar's intention was to keep the mortgage of 1912. as a shield. The intention however does not depend on the mortgagee's subsequent declaration, but must be gathered from the facts of each individual case at the time the subsequent mortgage was executed. The learned Counsel for the appellant referred to the case of Mahomed Ibrahim Hossain Khan V/s. Ambika Prasad Singh [1912] 39 Cal. 527, where it was pointed out by their Lordships of the Privy Council that a man having a right to act in either of two ways shall be assumed to have acted according to. his interests. This ruling has followed the principle previously enunciated by their Lordships in Mohesh Lal V/s. Mohunt Bawan Das [1883] 9 Cal. 961, and Gopal Das V/s. Rambur Sheochand [1884] 10 Cal. 1035. Whether a mortgage paid off is extinguished or kept alive depends upon the intention of the parties. We may . therefore enquire what the intention of the mortgagor and Balbhaddar must have been when the transaction of 1921, was entered into between the parties. The main object of that transaction was to make a clean sheet of previous transactions of the mortgagor and start a fresh series of mortgages by the mortgagor. The mortgagor received a very small amount of money in cash under this transaction but stipulated that the previous burdens on his property should be wiped out.

(3.) If the mortgagee had wanted to keep his prior mortgage of 1912 as a shield against the plaintiff he would not have consented in 1921, to pay off the full amount due to the plaintiff under the mortgage of 1916, which was subsequent to his mortgage of 1912. Only if the mortgagee intended to wipe out the mortgage of 1912 would the plaintiff be entitled to the full amount of the money due to him without any condition and as the mortgagee stipulated to pay the full amount due to the plaintiff at the time, he must be considered to have intended that there would be no condition made to the payment of the money due to the plaintiff. It was pointed out that there was no contract between the plaintiff and Balbhaddar. There was however a contract between Balbhaddar and, the mortgagor. Under the rules of equity and good conscience the Court must see that the mortgagor does not suffer by the breach of contract on the part of Balbhaddar, if Balbhaddar's claim were allowed to treat the mortgage of 1912 as a shield, the mortgagor would be put to great trouble in clearing himself of his liabilities and would be forced to bring a suit of breach of contract for the damage he may suffer by having to pay interest to the plaintiff from 1921 to the date of the satisfaction of his claim.