ASHARAM AGARWALLA Vs. UMESH CHANDRA BHOWMIK

JUDGEMENT

(1.) This is an appeal by the plaintiff from a decree for sale passed in a suit for enforcement of a mortgage the amount secured by which was payable in instalments. The bond was for a principal amount of Rs. 7,500 and was dated 30 Aswin 1327=16 October 1920. The first instalment was payable in Chaitra 1327 and in default of payment thereof the whole amount was to fall due on 1 Baisakh 1328=14 April 1921. On 28 March 1922 the suit was instituted, the claim being laid at Rs. 7,500 as principal, and Rs. 862-8.0 as interest. The defendants filed a written statement challenging the bond as fraudulent and void for want of consideration and upon other grounds, and also setting up a part payment of Rs. 92. A decree was passed ex parte against defendant 1. On the same day the claim against the other defendants was given up on compromise and as against them the suit was dismissed. On 8th January 1924, defendant 1 applied for setting that decree aside under Order 9, Rule 13, Civil P.C. This application was dismissed for default on 14 June 1924, but was eventually restored and ultimately dismissed on the merits on 27 June 1925. On appeal to the High Court this dismissal was, by an order made on 12 April 1927, set aside and the suit was restored to hearing on condition that defendant 1, appellant, paid to the plaintiff all costs incurred by him in the restoration proceedings in the trial Court as also in the appeal within a given time. The condition was complied with and on 11 August 1928, defendant 1, who was now the sole defendant in the suit and "will hereafter be referred to as the defendant, filed an additional written statement in which it was alleged: (1) That the plaintiff had in execution of the ex parte decree got the mortgaged properties (34 items of jotes) put up to sale and purchased some of them in his own name and others in the benami of other persons; (2) that thereafter the landlord of jotes Nos. 1, 2, 3, 4, 5, 6, 7 and 21 got the said jotes sold up for arrears of rent and the plaintiff deposited the decretal amount and damages, that the landlord raised objection as to the plaintiff's locus standi to make the deposit, and a date was fixed for the hearing of the objection, but the plaintiff in the meantime secretly entered into an arrangement with the result that the sale was not set aside and the plaintiff himself took settlement of the said jotes from the landlord; and (3) that the plaintiff, without the knowledge of the defendant collusively put up jotes Nos. 29 and 32 to auction, and purchased the same himself and was in possession and making large profits out of them.

(2.) The Subordinate Judge found that 13 of the jotes had been sold for arrears of rent, that all of them were sold in execution of decrees for rent obtained by the landlord and shortly thereafter the plaintiff obtained settlements of them from the landlord. He held that in those circumstances it could not be said that the plaintiff was in possession of the jotes as mortgagee and so he overruled the defendant's contention that the plaintiff was bound to render account of the profits that he had taken. He found that the rent sales had taken place on 2 September, 1924 and the plaintiff thereafter purchased the mortgaged property in execution of his ex parte decree on 19 September 1924, and that therefore at the time of the rent sales the mortgage lien was in force. The ex parte decree as well as the sale thereunder were subsequently set aside and with those we are no longer concerned. He held that if the landlord desired to annul the incumbrance it was incumbent on him to issue notices under Section 167, Ben. Ten. Act, but such notices were never issued. He found that the plaintiff fraudulently and in collusion with the landlord gave up his efforts to set aside the rent sales and withdrew the deposit he had made only with a view to get settlement of the jotes from the landlord, which he did in fact obtain thereafter. In these circumstances he held that the most equitable course would be to split up the mortgage and to hold it satisfied to the extent of the properties so taken leases of by the plaintiff.

(3.) As neither party had adduced any evidence to prove the values of the several jotes it was not possible to apportion the mortgage dues amongst the jotes. He directed an inquiry by a Commissioner as regards their values and in the meantime made a decree the terms of which will hereafter be set out. On the question of interest the Subordinate Judge held that the plaintiff was primarily responsible for the protraction of the suit, his view being that the constitution of the suit itself was unwarranted, and that the ex parte decree was not properly obtained, and that therefore for the four years that it took the defendant to get that decree set aside no interest should be allowed. The relevant portion of the decree, in the light of the contentions urged before us, is as follows: The suit is decreed in part for that portion of the claim which may be found due on apportionment between the 13 jotes sold for arrears of rent and taken leases of by the plaintiff. The portion of the principal amount so decreed would carry interest at the bond rate from institution of the suit up to the period of grace minus such interest for four years... defendant 1 is given six months time for payment of the amount found due on apportionment and after the amount is declared. If no such payment is made by the defendant within the period of grace the jotes Nos. 10 to 15 and 17 to 20 and Nos. 22 to 28 and 81 to 34 or a sufficient part thereof would be sold.