JAMNA DAS-BISESAR LAL Vs. MANI RAM HALWAI

JUDGEMENT

(1.) This second appeal arises out of a mortgage suit. The facts necessary for its determination are these There were two firms each consisting of members of a joint Hindu family. One of them was styled as Jamnadas Bisesar Lal, which consisted of Jamnadas and his three sons Bisesar Lal, Purusottam and Madan; and the other was styled as Lalchand Nopechand which consisted of Lalchand, his son Nopechand and his five sons, one of them being Bhagwandas defendant 3. These two firms formed a third partnership firm which was styled as Jamnadas Bhagwandas. According to the finding of the lower appellate Court this partnership of the two firms continued in the years 1911 to 1919. In 1915 defendants 1 and 2 created a usufructuary mortgage of a certain house in Katras in the name of Bhagwandas. There is a concurrent finding by both the Courts below that the mortgage was in fact in favour of the firm Jamnadas Bhagwandas, though it stood in the name of Bhagwandas alone. This mortgage is the subject-matter of the present suit. The firm of Jamnadas Bisesar Lal are the plaintiffs and claim to be the sole mortgagees.

(2.) The plaintiff's case is that the firm Lalchand Nopechand, one of the two partners of the firm Jamnadas Bhagwandas, having withdrawn a large amount out of the assets of the firm, retired from it leaving the remainder of the assets including this usufructuary mortgage in question to the plaintiffs Jamnadas Bisesar Lal and thus the plaintiffs became the sole mortgagees. The firm Lalchand Nopechand was later on declared insolvent by the Calcutta High Court and its assets were vested in the Official Assignee of Bengal. The plaintiffs alleged that defendants 1 and 2 had undertaken to keep the mortgaged premises in good repairs but they did not do so, with the result that the value of the security deteriorated. Defendants 1 and 2 were called upon to repair the house which they did not do and therefore the plaintiffs instituted the present suit for the mortgage money under Section 68, T, P. Act, making Bhagwandas, in whose name the mortgage stood, and the Official Assignee, parties to the suit. Defendant 5 is the purchaser of the equity of redemption in the house in execution of a certificate against defendants 1 and 2. The plaintiffs allege that they are the benamidars of defendants 1 and 2. The suit was resisted by defendants 1, 2 and 5. They raised various pleas such as legal necessity for the mortgage and of the passing of the consideration; but all of them having been decided by both the Courts below in favour of the plaintiffs, need not be considered. The main controversy between the parties, which is the only question to be decided in this second appeal, is as to the plaintiff's right to maintain the suit. The mortgagor defendants denied that the mortgage was in favour of the firm of Jamnadas Bhagwandas, and they further contended that even if it, was so, the plaintiffs wore not entitled to maintain the suit in the absence of a proper deed from the retiring partners, Lalchand Nopechand. The trial Court held that though the mortgage stood in the name of Bhagwandas alone it was the property of the firm of the Jamnadas Bhagwandas, of which the partners were the two firms Jamnadas Bisesar Lal and Lalchand Nopechand. It also held that Lalchand Nopechand retired from the business after having withdrawn a large amount of money and by adjustment of accounts the mortgage in suit became the exclusive property of the plaintiff firm Jamnadas Bisesar Lal and that under the circumstances no registered deed was necessary and even if the title of the plaintiffs was defective, it became good by twelve years possession of the mortgaged property. It further held that at any rate the plaintiffs being the sharers in the mortgage to the extent of half, were entitled to maintain the suit. Having found other necessary issues in favour of the plaintiffs, it gave the plaintiffs a decree for the mortgage money, making it to be a charge upon the mortgaged property. 2. On appeal the learned Subordinate Judge, while agreeing with the trial Court on other issues and holding that the mortgage in fact belonged to the firm of Jamnadas Bhagwandas, though it stood in the name of Bhagwandas alone, has dismissed the suit on two grounds first, that a registered deed was necessary to convey the title of the firm of Lalchand Nopechand, of which Bhagwandas was a member to the firm of Jamnadas Bisesar Lal, and second, that there was no adjustment oil accounts and that Bhagwandas did not withdraw from the partnership, leaving the mortgage in question to Jamnadas Bisesar Lal alone. It has also expressed the opinion that even if plaintiffs were entitled to a decree, no mortgage decree could be passed. The plaintiffs have appealed to this Court. I do not propose to enter into the question of law which has been discussed at an unnecessary length by the learned Subordinate Judge whether a registered deed is necessary in order to vest the interest of a retiring partner in an immoveable property in the remaining partner, or, in other words whether a registered deed is necessary when the assets of a partnership owning immoveable properties are divided and on adjustment of accounts and immoveable property falls into the share of a partner. It is unnecessary to discuss this question, as according to the finding of fact by the learned Subordinate Judge, which is binding on me in second appeal, there has been no adjustment of accounts between the plaintiffs and the firm of Lalchand Nopechand and consequently the plaintiffs are not solely entitled to the benefit of the mortgage. On this finding the question of necessity of a registered document does not arise. Now the case is whether on this finding the plaintiffs are entitled to any decree whatsoever. The facts as found may be summarised thus: (1). That there was a valid usufructuary mortgage in favour of a firm of which the plaintiffs firm called Lal chand Nopechand was a partner which has become insolvent and its assets are now vested in the Official Assignee of Bengal, the mortgage being in the name of Bhagwandas, defendant 3. (2). That there has been no adjustment of accounts as alleged by the plaintiffs and the plaintiffs are not exclusively entitled to the mortgage, though they have an interest in the mortgage. That interest according to the trial Court was half, but there is no clear indication of its extent in the judgment of the learned Subordinate Judge. I see nothing in law which disentitles the plaintiffs to get a decree when all those persons who can possibly have any interest in the mortgage are before the Court. The plaintiffs have an interest in the mortgage as mortgagees whatever its extent may be. Bhagwandas in whose name the mortgage stood whether he gave up his interest or not is a defendant in the suit. The Official Assignee, who represents the estate of the insolvent firm Lalchand Nopechand, is also on the record. Neither Bhagwandas nor the Official Assignee objected to the plaintiffs title. What the law requires is that all the persons interested in a mortgage must be parties to the suit, but it does not lay down that all of them should be arrayed on the same side. In other words, the law does not require that all the mortgagees must be plaintiffs. If this were so, it would have been the easiest thing for a mortgagor to arrange matters with one of the mortgagees whose share may be very small and induce him not to join in the suit and thereby defeat the interest of the remaining mortgagees. In my opinion the plaintiffs are entitled to get a decree and the suit has been wrongly dismissed, of course the interest of the co-mortgagees, if any, has to be safe-guarded.

(3.) The next question is whether mortgage decree for sale can be passed. The learned Munsif passed a decree which was in a sense a mortgage decree, that is, a decree for money declaring it to be a charge upon the mortgaged property. The learned Subordinate Judge has expressed a view that the plaintiffs are entitled only to a money decree. I have not been able to understand the reasonings of the learned Subordinate Judge. He was referred by the plaintiffs to a Full Bench decision of the Madras High Court in Marturu Subbamma V/s. Godda Narayya 1919 Mad 1164, which was to the effect that if a mortgagor fails to deliver possession to his mortgagee, the mortgage is not a usufructuary one and the mortgagee in entitled to bring a suit for sale. The learned Subordinate Judge seems to have been of opinion that this decision is no longer good law since the Act has been amended. But I do not find anything in the amended Section 67 T.P. Act, which in any way overrules the principle of that decision. Section 68, T.P. Act, enumerates cases in which a usufructuary mortgagee is entitled to sue for the mortgage money, but there is nothing in this section to show that the mortgagee can only get a simple money decree, and not a mortgage decree. Rather Sub-section (2) makes it clear that in case a suit is instituted under Clause (a) or Clause (b), of Sub-section (1), the Court may stay the suit for money till the mortgagee has exhausted all his remedies against the mortgaged property, or what remains of it, unless the mortgagee abandons his security and, if necessary, re-transfers the mortgaged property. This clearly shows that by instituting a suit for mortgage money under the circumstances enumerated in Section 68, T.P. Act, a mortgagee does not lose his right to proceed against the security. I cannot imagine that the legislature could have ever intended that if a mortgagor by his own default brings about deterioration of the mortgaged property and thereby forces the mortgagee to bring a suit for money, he can thereby deprive the mortgagee of what little security he has. The situation which this view will create will be apparent from the facts of this very case where the mortgagors interest has been sold in a sale certificate and purchased by defendant 5. It is obvious that if the mortgagors had no property the mortgage money cannot be realised at all.