Beni Prasad and Others vs Parmeshwar Singh and Others

Ross, J.—Those are appeals by the plaintiff in rent suits for the years 1330 to 1332. The plaintiff claimed produce rents. The defence was that the rents had been commuted to cash rents in 1916 and this defence has been accepted by both the Courts below. It appears that the plaintiff took a mortgage of this village, Kochgaon, in 1914, and in 1919 brought a suit on the mortgage which was decreed, and in execution of the decree the plaintiff purchased the property in 1922. The suit is for the rents of the next three years.

The contention on behalf of the appellant is that the value of the property has been seriously diminished by the commutation, so much so that the property is not now worth what the plaintiff paid for it. The matter was put in this way that the gross rental according to the Record-of-Rights for nakdi land is Rs. 7,000. There are 150 bighas of bhaoli land. The Government revenue is Rs. 2,200 and the road-cess Rs. 600. Therefore the income will be Rs. 4,200 plus the produce rent of 150 bighas. But this has been commuted at rates between Rs. 3 and Rs. 4 so that the total income is about Rs. 4,700, while the plaintiff paid Rs. 1,50,500 for the village. It has been found by the Courts below that if produce rent had been decreed it should have been at the rate of 10 maunds a bigha for paddy and 7 maunds a bigha for bhit lands. And this at the Gazette prices would have been Rs. 15 for paddy lands and Rs. 10 for bhit lands. It is argued that if these be the true values of the produce then the commutation has been dishonestly made in fraud of the mortgagee.

There is another point which is taken in this connexion, namely that the areas have been seriously reduced in every case. The details have been given by comparison of the entries in the khatian with the areas given in the hukumnama and the result is that, whereas the khatian areas are 2374 acres in all that is 38 bighas, the areas given in the hukumnama are 24 bighas 19 kathas and 9 dhurs. The learned District Judge, who seems to have been under the impression that it was only in some cases that the area in the hukumnama did not tally with the settlement area, considered that this point was immaterial. But in my opinion it is a point of very great importance in judging whether this was an honest commutation or not. The plaintiff states his readiness to have the rents commuted by a Revenue Officer.

On behalf of the respondents it is argued that the case is governed by Section 66 T.P. Act, and all that has to be considered is whether the plaintiff''s security was imperilled; and reliance was placed on a decision of this Court in Natho Singh and Others Vs. Lachu Singh and Others, 8. The appellant, on the other hand, relies upon a line of decisions derived from Madan Mohan Singh v. Rajkishori Kumari [1912] 39 I.C. 182, which lay down that in certain circumstances the burden of proof is on the tenant to show that the lease or the commutation is good: Mathura Rai v. Mandil Das [1920] 56 I.C. 805; Anand Ram Marwari v. Dhanpat Singh [1916] 1 Pat. L.J. 563 and Beni Prasad and Others Vs. Gangoo Singh and Others, . The circumstances in these cases were very remote from the circumstances of the present case and their authority has perhaps been shaken by the decision which I have referred to in Natho Singh''s case (1). It will be observed that the decision in Madan Singh''s case [1912] 39 I.C. 182 rests upon a dictum of Romer, L.J., in Reynolds v. Ashby [1903] 1 K.B. 87:

It would be dangerous if anything like a general authority to the mortgagor to deal with or affect the mortgaged property could be implied from the mere fact that the mortgagee has not taken possession of it.

In Natho Singh''s case (1) their Lordships cited with approval a passage from Sir Hari Singh Gour''s Commentary on the Law of Transfer, where evidently, with reference to this case, it was said that

this view follows the English law but ignores the different standpoint from which the law views the mortgagee''s rights in this country.

The justice of this criticism is apparent from the comment made by Fisher on Reynolds v. Ashby [1903] 1 K.B. 87. The learned author is dealing with the question of fixtures and hire-purchase agreements which was the question in Reynolds v. Ashby [1903] 1 K.B. 87 and says:

In such cases, if the mortgage is a legal mortgage and the mortgagee had no notice of the hire-purchase agreement, or the latter was made subsequently to the mortgage, the title of the mortgagee will prevail over that of the manufacturer by virtue of his legal title unless the mortgagee has acquiesced in their removal.

It is evident therefore that the decision in Reynolds v. Ashby [1903] 1 K.B. 87 and the observation of Romar, L.J., rested upon the legal title being in the mortgagee: but that is a conception which is unknown to the Indian law of mortgage and in this matter the Courts must be bound by the definition of a mortgage in Section 58, T.P. Act. This danger was pointed out by Jenkins, C.J., in Balmukund v. Motilal Barman [1915] 32 I.C. 195. The Court was there dealing with a lease granted by a mortgagor after the date of the mortgage and there his Lordship observed as follows:

The relative positions of a mortgagee and of a tenant under a tenancy created by the mortgagor after a legal mortgage is well-settled in England, but it would be a mistake to apply these English rules to the relations resulting from an Indian simple mortgage;

and he followed the decision in Banee Pershad v. Reet Bhunjun Singh [1868] 10 W.R. 325, observing that the propriety of that decision had never been questioned. The principle laid down in that case was that the mortgagor was restrained from alienating the property which he had pledged, but he was not divested of, or restricted in, the management of the property and, as long as nothing took place which impaired the value or impeded the operation of the mortgagee''s lien, the Court thought that the mortgagor, in creating a temporary lease, acted within his powers and that the purchaser had no legitimate cause of complaint. According to this decision therefore the test would be whether the commutation in the present case impaired the value or impeded the operation of the mortgagee''s lien. It is said that the mortgaged property did not fetch the amount of the decree and that the plaintiff had to obtain a personal decree for the balance. This is a fact which evidently has a bearing on the question; but the primary question for decision is whether the commutation was an honest conversion of the produce rent into cash rent at a fair rate. If it was then the plaintiff has no ground of complaint, because there is no guarantee that bhaoli rent will always remain bhaoli. But if it was not an honest commutation, and the security deteriorated in consequence, the commuted rate cannot be made the basis of the decree.

These questions have not been considered from this point of view and the cases must go back. I would therefore allow these appeals and sat aside the decrees of the District Judge and remand the appeals for rehearing. Costs will abide the result.

Chatterji, J.

I agree.