M SH MUHAMMAD SADIQ Vs. HARAKH NARAIN

JUDGEMENT

(1.) This is a redemption suit in which the mortgagor plaintiffs are a Mahomedan family and the mortgage is in the form of a zurpeshgi. It is dated in the year 1880. The amount secured thereby is Rs. 10,500. The mortgagees covenant to pay certain specified sums annually to the proper authorities in respect of taxes and cesses subject to the condition that if such taxes or cesses are remitted or reduced the amount by which the provided fixed payments shall exceed the new and reduced amount shall be paid to the mortgagors. A fixed annual sum of Rs. 82 is also to be paid to the mortgagors; the mortgagees are to enter into possession and are to appropriate the whole of the rents and profits of the mortgaged property until the whole advance of Rs. 10,500 shall be repaid in one lump sum.

(2.) In accordance with the historical custom in such cases there is expressed to be a "fixed and consolidated jama of Rs. 984-8-3" which after deducting therefrom the fixed payments above mentioned and Rs. 31-7-9 as "establishment charges is to leave a sum of Rs. 708-12-0 as the mortgagees profit on account of the peshgi money." But in spite of this form it is conceded that the contract as a whole, and, having regard to the later clauses, (subject to the matter of the cross-objection to be mentioned hereinafter) provides that the entire rent and profits of the estate are to be appropriated by the mortgagees and the mortgagees are to enter into possession of the mortgaged property and to hold it as security for the entire peshgi money. The mention of the "fixed and consolidated jama" is merely a relic of the device by which the sin of usury might be avoided, for it is curious that most religions provide means for satisfying the deity with forms while withholding substance. The phrase in general has no legal significance and in this document at any rate no significance whatever. The contract is therefore a usufructuary mortgage. It is true that it was executed before the Transfer of Property Act came into operation, but the principles of Secs.76 and 77 of that Act with regard to the liability of the mortgagee to account are applicable since they are a mere codification of the law in existence before the Act.

(3.) Now the mortgagees failed to carry out certain terms of the contract: (a) They did not pay to the mortgagors the annual payment of Rs. 82 as stipulated and the whole aggregation of those payments is in arrears. (b) One of the specified payments to be made by the mortgagee was the Dak cess payable at the time when the contract was made, but that cess was abolished in 1907 and the mortgagees should have paid the stipulated sum over annually to the mortgagors and this they failed to do. It was the contention of the mortgagor plaintiffs that as the mortgagees retained in their hands annually sums which they should have paid to the mortgagors these sums should be deemed to have been applied annually in the reduction of the capital sum advanced. They also contended that this should have brought about a corresponding reductions in the annual interest, and for this purpose (notwithstanding that the mortgagees had the right to appropriate the whole of the rents and profits) they claimed to treat the fictitious annual sum of Rupees 708-12-0 mentioned as the "profit on account of the peshgi money" as the interest on the loans and at the rate of 9 as per 100 rupees. In other words they claimed that the mortgagees must account for the moneys coming into their hands from the property (or at least, as Mr. Husnain on their behalf put it, to the extent of the fixed and consolidated jama of Rs. 984-8 3) and as to moneys which they should have handed over to the mortgagors they should account for the same with yearly rests.