RAJ KUMAR BHARTHI Vs. SURAJDEO SAHI

JUDGEMENT

(1.) This matter was referred to a Division Bench as the point appeared to me at the time to be one of considerable importance and upon which there were a number of authorities which from one point of view might have been taken as conflicting. In the first place I want to make an observation with regard to the words appearing in the order I made while referring the case to a Divisional Court. I stated there as follows: And if it can be held that there was no implied covenant to repay and that the plaintiff's right to recover the principal depended upon Section 68, that is to say that he was entitled to that relief only in the circumstances that he had been dispossessed, it would mean that although there has been a loan, the creditor can never get repayment.

(2.) I had never intended laying down in that judgment that if there was implied agreement to repay, the plaintiffs would have the right under Section 68, T.P. Act, to recover the principal. In the judgment, which in this case I am about to express, it would appear that to decide that point is unnecessary. I have no doubt as to the proper meaning of Section 68, T.P. Act. The appellant was the usufructuary mortgagee who was in possession of the property as a security for the loan advanced. On the terms of the bond he was to repay himself, so far as interest was concerned, out of the rents and profits. I presume that the reason for that arrangement was that the rent and profits were insufficient to meet more than the interest, but the fact remains that the plaintiff was to recoup himself for the interest only from the rents and profits. Now, it stands to reason that, unless the mortgagee has a right either to sell the property or sue for the mortgage money, the mortgagor would, in the circumstances of the case, be entitled to keep the money so long as he pleases, indeed to keep it for such period as would bar the plaintiff's (mortgagee s) right to recover the same.

(3.) The only question that we have to decide in this case is whether the plaintiff- mortgagee is entitled to recover the mortgage money, because, for reasons best known to himself, he does not ask for a decree for the sale of the mortgaged property. The matter that falls to be determined is whether on the construction of the deed there is a covenant to repay the mortgage money. Before dealing with that point, I would refer to some of the Secs.of the Transfer of Property Act. Section 58(d) provides: Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage money, and to receive the rents and profits accruing from the property, or any part of such rents and profits, and to appropriate the same in lieu of interest or in payment of the mortgage money, or partly in lieu of interest and partly in payment of the mortgage money, the transaction is called a usufructuary mortgage, etc.