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Judgment
Somayya, J.—There are two appeals, A.S. Nos. 328 of 1939 and 372 of 1940, both arising out of O.S. No. 12 of 1939 which was a suit
for redemption of a mortgage executed by defendants 2 to 5 in favour of the first defendant under Ex. B, dated the 26th January, 1934.
Defendants 2 to 5 executed a subsequent mortgage in favour of the plaintiffs under Ex. A, on the 27th August, 1937 and the plaintiffs filed the suit
out of which the appeals arise for redeeming the prior mortgage in favour of the first defendant. Before filing the suit the plaintiffs deposited the
amount which they considered to be due under the mortgage Ex. B in O. P. No. 45 of 1938. This was on the 29th October, 1938. They made the
present first defendant the prior mortgagee alone a party and asked for the usual reliefs grantable u/s 83 of the Transfer of Property Act. To this a
statement of objections was filed by the respondent and two reasons were given by him for not accepting the amount deposited in Court. One is
that -the mortgagors who executed Ex. B to him and Ex. A to the plaintiffs (who were the petitioners therein) were disputing the right of the
plaintiffs-petitioners and therefore it would be unsafe for him to receive the amount and hand over possession, in the absence of the mortgagors.
Therefore he said that unless the mortgagors were made parties to that petition, it would not be safe for him to receive the amount and to hand
over possession to the applicants. It appears that the mortgagors refused to register the mortgage in favour of the plaintiffs and resort was had to
proceedings by way of compulsory registration. The document was compulsorily registered in February, 1938. The petition u/s 83 of the Transfer
of Property Act was filed on the 29th October, 1938 and notice thereof was given 1o the mortgagee-respondent on the 18th November, 1938.
The respondent gave another reason for not accepting the amount and that is that there were crops on the land which he had raised, He said ""The
property which is under mortgage has been cultivated by the respondent and in a short while crops would be harvested"". It is now found by the
Subordinate Judge that the crops were five months old at the time of the petition and that they were harvested in February of the next year. As the
mortgagor was not made a party to the application the Court passed an Order Ex. C, dated the 29th November, 1938, closing the petition on the
ground that the respondent was not willing for the reasons stated by him in his counter affidavit to receive the amount and to give, up possession.
The present suit was filed on the 12th January, 1939. The prior mortgagee is the first defendant and the mortgagors are defendants 2 to 5. The
lower Court has decreed redemption and to that extent there is no objection by any party. The first defendant is the appellant in A.S. No. 328 of
1939 and he objects to the order made by the lower Court as regards costs and as regards mesne profits prior to the date of suit. As regards the
costs, the appellant objects to his being made liable to pay the costs of the plaintiffs which is the direction made by the lower Court. Issue 2 was
raised regarding the liability of the first defendant for costs of the suit and on that issue the lower Court states thus:
As regards costs, since the deposit u/s 83 was good and since first defendant refused to receive the money and be redeemed he is liable to pay the
costs.
The rule as to costs in a redemption action is laid down in Order 34, Rule 10 of the Code of Civil Procedure:
In finally adjusting the amount to be paid to a mortgagee in case of a foreclosure, sale or redemption, the Court shall, unless in the case of costs of
the suit the conduct of the mortgagee has been such as to disentitle him thereto, add to the mortgage-money such costs of the suit and other costs.
So the Court is bound to give the mortgagee his costs of the suit unless the Court is of opinion that his conduct has been such as to disentitle him
thereto. The law is stated in Fisher on the ''Law of Mortgage'' (7th edition) at page 752 thus:
Rule as to Costs op Suit.-The mortgagee is entitled as of right to the costs properly incurred by him in an action of foreclosure, or redemption, and
this right extends to an equitable mortgagee including a mortgagee by deposit whether with or without a. memorandum of deposit. But he may
forfeit these costs by misconduct, or may even have to pay the costs of such an action in a case where he has acted vexatiously or unreasonably.
The appellant only asks that he should be relieved of the liability to pay costs of the plaintiffs in this action. In the lower Court he no doubt asked
for costs of the suit to be paid to him. But in valuing the memorandum of appeal he has confined it to the costs which he was asked to pay the
plaintiffs, and we are therefore not concerned with his right to get costs from the plaintiffs. Hence the only question is whether he has been rightly
made to pay the costs of the plaintiffs. We have therefore to see whether his conduct has been vexatious or unreasonable. In this case having
regard to the fact that the mortgagors did not submit to registering the document without resort to compulsory registration and to the fact that even
after the petition was filed on the 29th October, 1938, by the present plaintiffs u/s 83 of the Transfer of Property Act, a notice was issued by the
mortgagors under Ex. J, dated 14th November, 1938, disputing the right of the present plaintiffs, at any rate to get redemption of the prior
mortgage unconditionally, we do not think that there was anything unreasonable in the conduct of the mortgagee in insisting upon the mortgagors
being made parties to the petition before submitting to redemption. It is unnecessary to consider whether strictly the mortgagors are necessary
parties to an application u/s 83 of the Act. ""What we are concerned with is whether the conduct of the mortgagee in the circumstances of this case
is such as to be properly characterised as vexatious or unreasonable. Far from being vexatious or unreasonable, we think there was every
justification for him to make the request which he did that the mortgagors should also be made parties before any further orders are passed on that
application. Since the plaintiffs did not take any steps to implead the mortgagors, the Court had no option but to pass an order which it did,
namely, closing the application. The word ''closed'' is really not proper. The petition should have been formally dismissed. We are clearly of
opinion that there is nothing vexatious or unreasonable in the conduct of the mortgagee in refusing to accept the amount in the absence of the
mortgagors.
This is enough to dispose of the appeal filed by the first defendant in so far as it relates to costs. He ought not to have been made liable to pay
the costs of the plaintiffs. The next question is whether the plaintiffs are entitled to any mesne profits prior to the date of suit. The lower Court has
found that the mortgagee was entitled to the income, from the property up to the date when he got notice of the application u/s 83. This comes to a
few hundreds of rupees. The amount which the plaintiffs deposited u/s 83 did not admittedly include this amount. The deposit u/s 83 is therefore
open to this objection as well, that the amount which was deposited is not the full amount due under the mortgage. It is argued by the learned
advocate for the respondents that the mortgagee may be entitled to a portion of the income from the date of the commencement of the cultivation
up to the date of the notice to him, but that his clients, the plaintiffs were bound only to deposit Rs. 5,728. His argument is that it is not as a
mortgagee that he is entitled to the income during this period. We are unable to accept this contention. After the mortgagee accepts the tender u/s
83 of the Transfer of Property Act he is not entitled to claim any further relief as against the mortgagors or the person making the deposit. He is
bound to accept the deposit in full settlement of all his claims. If he is not prepared to do it, then he ought to decline to accept the amount
deposited and that is the course which the first defendant adopted in this case. We think that he adopted the right course. In fact, there was no
other alternative for him to pursue. If the lower Court''s finding is correct that the prior mortgagee, the first defendant, was entitled to the income up
to the date of his receiving the notice of the petition u/s 83 and he was entitled to it only in his character as a mortgagee there being no tender of
that amount, the deposit is not proper. We therefore set aside the decree for mesne profits up to the date of the suit. We think however that the
plaintiffs are entitled to the mesne profits from the date of suit up to the date when the harvest was completed. The harvest was completed,
according to the evidence of D.W. 1, on the 23rd February, 1939. The plaintiffs will therefore be entitled to mesne profits from the 12th January,
1939, the date of the plaint, up to the 23rd February of ""that year.
Mr. Ramaswami Aiyangar, the learned advocate for the respondents, then urges that if he is not to get the costs of the action from the first
defendant the prior mortgagee, he is at least entitled to do so from the mortgagors or that he is entitled to add, the costs to his mortgage amount u/s
72 (d) of the Transfer of Property Act. The. mortgagors did not recognise the right of the plaintiffs prior to the suit. They would not register the
document which they executed. They issued the notice Ex. J. on the 14th November, 1938. The plaintiffs were therefore justified in filing this suit
and the suit is really one for making good their own title to the property as against the mortgagors. The case is therefore covered by the language of
Section 72 (d) and we consider that they should be allowed to add the amount which is spent for the suit to the principal money secured by their
mortgage and to recover it under the provisions of Section 72 of the Act. But they will not be entitled to so add the costs of this Court.
In A.S. No. 328 of 1939 there is also an objection as to the rate of the mesne profits granted by the lower Court. It is said that during the year
in question there was scarcity of water and that the first defendant did not realise as much as ten bags of paddy per acre from the tenants. The
lower Court has pointed out that apart from the interested statement of the first defendant there is nothing to show that the full amount was not
realised by him. We accept the finding of the lower Court on this question.
The result is that A.S. No. 328 of 1939 is allowed except as to the quantum of mesne profits and A.S. No. 372 of 1940 also succeeds. In A.S.
No. 328 of 1939 the plaintiffs-respondents will pay the costs of the appellant therein. Otherwise the parties will bear their own costs of this appeal.
In A.S. No. 372 of 1940 the respondents will pay the costs of the appellants. The amounts paid to the Court guardians in each case will be added
to the costs of the appellants in the respective appeals.
Order.-The amount of costs as amended by the lower Court will be added to the mortgage amount.