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PETITIONER:

NAMDEV SHRIPATI NALE

Vs.

RESPONDENT:

BAPU GANAPATI JAGTAP & ANR.

DATE OF JUDGMENT: 11/03/1997

BENCH:

B.P. JEEVAN REDDY, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

Paripooran. J.

The plaintiff in Civil Suit No. 40 of 1970 -- Civil

Judge, Junior Division, Vaduj, is the appellant herein. His

father one Shripati executed a possessory mortgage of the

suit property, R.S. No. 244/23 situate at Lalgun Taluka

Khatav, Distt. Satara, by Exhibit 35A dated 3.4.1947 for Rs.

1,200/- in favour of the first respondent, (1st defendant),

Bapu Ganapati Jagtap. Pending this appeal, first respondent

died on 1.6.1985. His three sons Nivruti Bapusaheb Katkar

(Jagtap), Dnyandev Bapusaheb Katkar (Jagtap) and Sahelrao

Bapusaheb Katkar (Jagtap) have been impleaded as his legal

representative. The second respondent Laxmi Devi Shripati

Nale is the appellant' mother. Exhibit 35A mortgage was for

a period of 12 years. The mortgages was to take the income

of the property and appropriate the same towards the

interest due etc. Appellant's father died in 1953. The

appellant was a minor then. The mortgage could not be

redeemed within the period fixed. After the expiry of the

said period, the appellant caused a notice to be sent

agreeing to repay the mortgage amount Rs. 1,200/- and sought

redemption. The first respondent declined to accede to the

request. So, the suit was laid for redemption of the

mortgage, Exhibit 35A. The first respondent pleaded that

transaction Exhibit 35A was really a sale. In the

alternative, he pleaded that the plaint item is an inam and

it was abolished by the Bombay Pargana and Kulkarni Watans

(Abolition) Act, 1950 (Maharashtra Act 60 of 1950)

(hereinafter referred to as the Act). The land was resumed

by the Government and was regranted to the first respondent

(Ext. 26). So, the appellant has no subsisting right to

redeem. The first respondent also pleaded that in case of

redemption he should be paid compensation.

2. The trial court, by order dated 8.12.1971, dismissed

the suit. In appeal the District Judge, Satara, in Civil

Appeal No. 29 of 1972, by order dated 30.1.1974, decreed the

suit and passed a preleminary decree for redemption and

recovery of possession of the property. In second appeal No.

514 of 1974 by order dated 19.11.1979, a learned single

Judge of the High Court of Bombay restored the judgment and

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decree of the trial court. That has resulted in the

appellant's coming in appeal before this Court.

3. The trial court, the lower appellate court and the High

Court have found that the Exhibit 35A is a deeds of mortgage

and not a sale. The trial court found that as per the Act

the land vested in the Government and was regranted to the

first respondent was only a trustee and Section 90 of the

Indian Trust Act, 1882 was attracted, was repelled. In

appeal the, District Judge held that the first respondent-

mortgagee failed to remit the occupancy price as enjoined on

him, and by putting forward the plea that he is tenant, he

obtained the regrant and thus gained an advantage; it should

enure for the benefit of the mortgagor and so, the right to

redeem still vested in the appellant. It is a case where

section 90 of the Indian Trust Act was clearly attracted. In

second appeal, the learned single Judge of the High Court

took the view that (1) due to non-payment of the occupancy

price by the plaintiff within the period of five years(on or

before 25.1.1956) the suit property vested in the Government

and this was not challenged; (2) the first respondent was

taken to be a tenant and the land was regranted to him,

(Ext. 26); and (3) it cannot be said that the first

respondent gained and advantage by availing his position as

mortgagee in getting the regrant. In the above premises, the

suit for redemption was dismissed.

4. We heard counsel. Counsel for the appellant urged

before us that the first respondent-mortgagee was bound to

pay the occupancy price and by failing to do so he brought

about the situation, enabling him to obtain a regrant of the

property in his name by posing himself as a tenant; in other

words, first respondent committed a default or a wrong and

by taking advantage of his position, as one possession of

the property, obtained a benefit or advantage, He has

committed a wrongful act, in not remitting the occupancy

price as contemplated by law. The resultant advantage,

obtained thereby should enure to the benefit of the

appellant or, in other words, the resultant advantage should

be deemed to have been obtained for the benefit of the

appellant. So, the suit for redemption should be decreed. On

the other hand, counsel for the respondents contended that

in view of the failure of the mortgagor to remit the

occupancy price within the time limited by law, the land

vested in the Government; it cannot be said that he

committed any default and obtained any undue advantage in

the subsequent regrant made in his favour. The ******* of

Section 90 of the Indian Trust Act are not attracted.

5. The following statutory provisions are relevant to

adjudicate the controversy in this case. They are:-

(I) Section 2(1)(b), 3 and 4 of

the Bombay Pargana and Kulkarni

Watans (Abolition) Act, 1950

(Maharastra Act 60 of 1950):-

2. Definitions - (1) In this Act

unless there is anything repugnant

in the subject or context, --

(a)..........

(b) "code" means the Bombay Land

Revenue Code, 1879:"

"3. Abolition of certain watans

together with the right to office

and incidents. -- With effect from

and on the appointed day,

notwithstanding anything contained

in any law, usage, settlement,

grant, sanad or order --

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(1) all Paraganas and Kulkarni

watans shall be deemed to have been

abolished;

(2) all rights to hold office and

any liability to render service

appertaining to the said watans are

hereby extinguished;

(3) subject to the provisions of

section 4, all watan land is hereby

resumed and shall be deemed to be

subject to the payment of land

revenue under the provisions of the

Code and the rules made thereunder

if it were an unalienated land;

Provided that such resumption shall

not affect the validity of any

alienation such watan land made in

accordance with the provisions of

section 5 of the Watan Act or the

rights of an alienee thereof or any

person claiming under or through

him;

(4) all incidents appertaining to

the said watans are hereby

extinguished."

"4. Holder of watan land to be

occupant. -- (1) A watan land

resumed under the provisions of

this Act shall subject to the

provisions of section 4-A, be

regranted to the holder of the

watan to which it appertained price

equal to twelve time of the amount

of the full assessment of such land

within five year from the date of

the coming into force of this Act

and the holder shall be deemed to

be an occupant within the meaning

of the Code in respect of such land

and shall primarily be liable to

pay land revenue to the State

Government in accordance with the

provisions of the Code and the

rules made thereunder; all the

provisions of the Code and rules

relating to unalienated land shall,

subject to the provision of this

Act, apply to the said land:

Provided that in respect of

the watan land which has not been

assigned towards the emoluments of

the officiator, occupancy price

equal to six times of the amount of

the full assessment of such land

shall be paid by the holder of the

land for its regrant:

Provided further that if the

holder fails to pay the occupancy

price within the period of five

years as provided in this section,

he shall be deemed to be

unauthorisedly occupying the land

and shall be liable to be summarily

ejected in accordance with the

provisions of the Code.

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(2) The occupancy of the land

regranted under sub-section (1)

shall not be transferable or

partible by metes and bounds

without the previous sanction of

the Collector and except on payment

of such amount as the State

Government may be general or

special order determine.

(3) Nothing in sub-section (1) and

(2) shall apply to any land --

(a) the commutation settlement in

respect of which provides expressly

that the land appertaining to the

watan shall be alienable without

the sanction of the State

Government; or

(b) which has been validly

alienated with the sanction of the

State Government under section 5 of

the Watan Act.

Explanation -- For the purposes of

this section the expression

"holder" shall include --

(i) all persons who on the

appointed day are the watandars of

the same watan to which the land

appertained, and

(ii) in the case of a watan the

commutation settlement in respect

of which permits the transfer of

the land appertaining thereto, a

person in whom the ownership of

such land for the time being

vests."

(emphasis supplied)

(II) Sections 65(c) and 76(c) of

the Transfer of Property Act are to

the following effect :-

"65. In the absence of a contract

to the contrary, the mortgagor

shall be deemed to contract with

the mortgagee--

(c) that the mortgagor will, so

long as the mortgagee is not in

possession of the mortgaged

property, pay all public charges

accruing due in respect of the

property;

"76. When, during the continuance

of the mortgage, the mortgagee

takes possession of the mortgaged

property,--

(c) he must, in the absence of a

contract to the contrary, out of

the income of the property, pay

Government revenue, all other

charges of a public nature and all

rent accruing due in respect

thereof during such possession and

any arrears of rent in default of

payment of which the property may

be summarily sold."

(emphasis supplied)

(III) Section 90 of the Indian

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Trust Act, 1882 :-

"90. Advantage gained by qualified

owner.-- Where a tenant for life,

co-owner, mortgagee or other

qualified owner of any property, by

availing himself of his position as

such, gains an advantage in

derogation of the rights of the

other persons interested in the

property, or where any such owner,

interested in such property, gains

any advantage, he must hold, for

the benefit of all persons so

interested, the advantage so

gained, but subject to repayment by

such persons of their due share of

the expenses properly incurred, and

to and indemnity by the same

persons against liabilities

properly contracted in gaining such

advantage."

(Emphasis supplied)

6. The relevant portions of

Exhibit 35A, deed of mortgage dated

3.4.1947 are as follows :-

"For repaying the loan mentioned

above and for the house expenses

(the amount mentioned above) I give

my land (as mentioned below) as

Mudat Kharadi. I have given the

land in your possession for the

period 12 years to-day. So till the

period of sale you should pay the

assessment and cultivate the land

and should take the income of the

land. At the expiry of the term of

the deed, (I) will pay the Rupaya

and will take back the land by

("Sadavun") redeeming the same. If

the amount will not be paid within

the time then this should be

treated as permanent sale and you

should enjoy the suit land absolute

for yourself and by your heirs.

Hence neither myself nor my heirs

shall have any right of claim in

respect of suit property. You will

be full owner of the suit

property."

(emphasis supplied)

The document is a possessory mortgage. The mortgagee is

permitted to appropriate the income of the land.(towards

interest due). It is stated that the income from the

interest due). It is stated that the income from the

property will be Rs. 500-600 per annum. Admittedly, the

property is an inam land. By Maharashtra Act 60 of 1950, the

land was resumed by the Government (Ext. 26). There was a

provision to regrant it to the holder of the land on payment

of the occupancy price equal to 12 times of the amount of

the amount of the full assessment of such land within five

years from the date of coming into force of the Act. The Act

came into force on 25.1.1951. So the occupancy price should

be paid on or before 25.1.1956. The mortgagor did not pay

the occupancy price till then. The lower appellate court has

found that the first respondent was taken to be a tenant of

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the land. He paid the occupancy price (on his own) and

obtained the regrant from the Government. We are of the view

that the occupancy price payable under Section 4 of the Act

to obtain a regrant, will be covered by the expression all

public charges accruing due in respect of the property, all

other charges of public nature as specified in Section 65(c)

and 76(c) of the Transfer of Property Act respectively. In

the absence of a contract to the contrary, during the

pendency of the mortgage, when the mortgagee is in

possession of the mortgaged property, he was bound to pay or

remit the occupancy price under Section 4 of the Act for and

on behalf of the mortgagor, so as to prevent the happening

of the consequence stated in the proviso. The first

respondent-mortgagee failed to comply the aforesaid

statutory obligation. He committed a wrong or a default.

Whether the default/wrong committed has as its basis a

contractual obligation or a statutory obligation, makes no

difference. He was taken, to be a tenant by the authorities,

which enabled him to get the regrant in his favour. That was

only because the first respondent, as a possessory

mortgagee, was in possession of the property. He took

advantage of his position as a possessory mortgagee. In so

doing he faulted. So, on facts, it is clear that the first

respondent obtained regrant in his favour or obtained an

advantage in his favour, by availing himself of his position

as a mortgagee. In law, the advantage obtained by the first

respondent, the qualified owner, must be held to be for the

benefit of the person interested -- the mortgagor -

appellant. We are of the view that in the totality of the

facts and circumstances the provisions of Section 90 of the

Indian Trust Act are attracted. The first respondent-

mortgagee gained an advantage by availing himself of his

position as a possessory mortgagee and obtained the regrant.

This he did by committing a wrong. He committed a default in

not paying the occupancy price within the time limited by

law for and on behalf of the mortgagor. The regrant was

obtained in his name by posing himself as a tenant, which

was possible only because he was in possession of the land

(as a possessory mortgagee). The advantage so gained by him

in derogation of the right of the mortgagor should attract

the penal consequences of Section 90 of the Indian Trust

Act. We hold that the default committed by a possessory

mortgagee, in the performance of a statutory obligation or a

contractual obligation, which entails a sale or forfeiture

of right in the property, to the mortgagor, will attract the

provisions of Section 90 of the Indian Trust Act. In such

cases any benefit obtained by the qualified owner, the

mortgagee, will enure to or for the benefit of the

mortgagor. The right to redeem will subsist notwithstanding

any sale or forfeiture of the right of the mortgagor. We are

of the view that the law on this point has been laid down

with admirable clarity by this Court in Mritunjoy Pani and

anr. vs. Narmanda Bala Sasmal and anr. (1962 (1) SCR 290)

and by K.K. Mathew, J. (as his lordship then was) in Nabia

Yathu Ummal vs. Muhammed Mytheen & ors. (1963 KLJ 1177). The

said decisions have our respectful concurrence.

7. We, therefore, set aside the judgment of the learned

single Judge of the Bombay High Court rendered in S.A.No.

514 of 1974 dated 19.11.1979 and restore the judgment and

decree of the District Judge, Satara, rendered in C.A. No.29

of 1972 dated 30.1.1974. The appeal is allowed with costs

throughout. The payment ordered by the District Judge,

Satara, in his judgement dated 30.1.1974 inclusive of the

amount remitted by the 1st respondent for obtaining the

occupancy right, shall be remitted within six months from

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today and thereupon the appellant shall recover from the

respondents possession of the suit property.