Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment

Judgment:

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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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B.D. Agarwal, J.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
	),
	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
		(int) 0 => '463697',
		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.

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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.

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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'appealno' => 'First Appeal No. 97 of 1972',
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		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'pubs' => 'AIR1987All155',
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			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
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			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'pubs' => 'AIR1987All155',
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			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
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			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'pubs' => 'AIR1987All155',
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			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
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			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
		(int) 0 => '463697',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
	),
	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
		(int) 0 => '463697',
		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'pubs' => 'AIR1987All155',
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			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
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			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.'

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
	),
	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
		(int) 0 => '463697',
		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
			'observations' => null,
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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(ii) interest at the rate of 12% per annum simple.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
	),
	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
		(int) 0 => '463697',
		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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14. The respondent is entitled to the adjustment of the following :

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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
			'observations' => null,
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
		)
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
	'args' => array(
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		(int) 1 => 'munni-lal-vs-phuddi-singh'
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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(b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'casesref' => '',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
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		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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(c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
	'desc' => array(
		'Judgement' => array(
			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
			'caseanalysis' => null,
			'casesref' => '',
			'citingcases' => '',
			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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			'prhistory' => '',
			'pubs' => 'AIR1987All155',
			'ratiodecidendi' => '',
			'respondent' => 'Phuddi Singh',
			'sub' => 'Property',
			'link' => null,
			'circuit' => null
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	'casename_url' => 'munni-lal-vs-phuddi-singh',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
$desc = array(
	'Judgement' => array(
		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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		'pubs' => 'AIR1987All155',
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		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
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		'circuit' => null
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
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The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.

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	'title_for_layout' => 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | ',
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			'id' => '463697',
			'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
			'appealno' => 'First Appeal No. 97 of 1972',
			'appellant' => 'Munni Lal',
			'authreffered' => '',
			'casename' => 'Munni Lal Vs. Phuddi Singh',
			'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
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			'casesref' => '',
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			'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
			'counseldef' => 'Rajeshwari Prasad, Adv.',
			'court' => 'Allahabad',
			'court_type' => 'HC',
			'decidedon' => '1986-03-12',
			'deposition' => 'Appeal allowed',
			'favorof' => null,
			'findings' => null,
			'judge' => 'B.D. Agarwal, J.',
			'judgement' => '<p style="text-align: justify;">B.D. Agarwal, J. </p><p style="text-align: justify;">1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p style="text-align: justify;">2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p style="text-align: justify;">3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p style="text-align: justify;">4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p style="text-align: justify;">5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p style="text-align: justify;">6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p style="text-align: justify;">7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p style="text-align: justify;">8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p style="text-align: justify;">Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p style="text-align: justify;">Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p style="text-align: justify;">Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p style="text-align: justify;">9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p style="text-align: justify;">10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p style="text-align: justify;">11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p style="text-align: justify;">The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p style="text-align: justify;">12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p style="text-align: justify;">'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p style="text-align: justify;"> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p style="text-align: justify;">13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p style="text-align: justify;">(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p style="text-align: justify;"> (ii) interest at the rate of 12% per annum simple. </p><p style="text-align: justify;">14. The respondent is entitled to the adjustment of the following :</p><p style="text-align: justify;">(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p style="text-align: justify;"> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p style="text-align: justify;"> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p style="text-align: justify;">The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
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$title_for_layout = 'Munni Lal Vs Phuddi Singh - Citation 463697 - Court Judgment | '
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		'id' => '463697',
		'acts' => '<a href="/act/51778/transfer-of-property-act-1882-complete-act">Transfer of Property Act, 1882</a> - Sections 58, 60 and 76; <a href="/act/51117/code-of-civil-procedure-1908-complete-act">Code of Civil Procedure (CPC) , 1908</a> - Order 34, Rules 2(1), 4 and 4(1)',
		'appealno' => 'First Appeal No. 97 of 1972',
		'appellant' => 'Munni Lal',
		'authreffered' => '',
		'casename' => 'Munni Lal Vs. Phuddi Singh',
		'casenote' => 'Property - suit for recovery of mortgage amount - Sections 58 (g), 60 (b) and 76 (g) of Transfer of Property Act, 1882 and Order 34 Rules 4 (1) and 2 (1) (e) (i) of Code of Civil Procedure, 1908 - anomalous mortgage is mixture of simple and usufructuary mortgage - suit by mortgagee in anomalous mortgage to recover mortgage amount - mortgagee in possession of property - mortgagor entitled to claim delivery of possession of property on payment of mortgage amount - mortgagee entitled to fair rent in case of non maintenance of accounts.<br> -  -  The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. The entire amount including the principal was to be satisfied by the usufruct. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. 457 of 1963 failed and the other suit No. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v.',
		'caseanalysis' => null,
		'casesref' => '',
		'citingcases' => '',
		'counselplain' => 'S.R. Misra and ;J. Swarup, Advs.',
		'counseldef' => 'Rajeshwari Prasad, Adv.',
		'court' => 'Allahabad',
		'court_type' => 'HC',
		'decidedon' => '1986-03-12',
		'deposition' => 'Appeal allowed',
		'favorof' => null,
		'findings' => null,
		'judge' => 'B.D. Agarwal, J.',
		'judgement' => '<p>B.D. Agarwal, J. </p><p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.</p><p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.</p><p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.</p><p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.</p><p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.</p><p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.</p><p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.</p><p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.</p><p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.</p><p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.</p><p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.</p><p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.</p><p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.</p><p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.</p><p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.</p><p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :</p><p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.</p><p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' </p><p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :</p><p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.</p><p> (ii) interest at the rate of 12% per annum simple. </p><p>14. The respondent is entitled to the adjustment of the following :</p><p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.</p><p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.</p><p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. </p><p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.</p>',
		'observations' => null,
		'overruledby' => null,
		'prhistory' => '',
		'pubs' => 'AIR1987All155',
		'ratiodecidendi' => '',
		'respondent' => 'Phuddi Singh',
		'sub' => 'Property',
		'link' => null,
		'circuit' => null
	)
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	(int) 0 => '<p>B.D. Agarwal, J. ',
	(int) 1 => '<p>1. This is plaintiff's appeal directed against the trial court's decree dt. Jan. 1, 1972 passed under Order 34, Rule 4, Civil P.C. in original Suit No. 152 of 1969.',
	(int) 2 => '<p>2. The defendant executed a mortgage under registered instrument in plaintiffs favour on Jan. 7, 1961 in respect of the property detailed at the foot of the plaint. The consideration was Rs. 23,000,00 repayable with interest at the rate of 12% per annum within a period of four years. For the payment of interest the mortgage stipulates that the mortgagee would be entitled to realise Rs. 102/- per month being the rent from three tenants in the shops referred to as Items 1, 2 and 3 respectively in the Schedule 'A' appended to the deed of mortgage. In case the mortgagee is put in possession over the land referred to in Schedules 'B' and 'C, he was to be deemed to be a tenant in respect thereof on rent at the rate of Rs. 58/- and 40/-respectively. A sum of Rs. 128/- per month was thus to be set off towards interest. The contention of the plaintiff is that he was not put in possession over the land in Schedules 'B' and 'C. The defendant, according to him, obstructed in the realisation of rent regarding the property in Schedule 'A' as well. Over the shop mentioned as Item 1 in Schedule 'A' the plaintiff got possession in July 21, 1964 in Original Suit No. 639 of 1962 filed by him against the tenant and over the shop mentioned as Item 2 in this Schedule he could obtain possession only in May 1965. He did not get possession over any land in respect of Item 3 of this Schedule. The relief claimed in the suit is the recovery of sum of Rs. 69,222.65 (including Rs. 4,000/- claimed to be spent in litigation concerning the property mortgaged) and, tf necessary, sale of the mortgaged property for realisation of the amount.',
	(int) 3 => '<p>3. In defence it is asserted that the mortgage was usufructuary. The entire amount including the principal was to be satisfied by the usufruct. The mortgagee was not entitled to compound interest It is refuted that the defendant at any stage obstructed in the realisation of the rent. The plaintiff mortgagee obtained possession over Items I and 2 of Schedule 'A' and the defendant is entitled to be recompensed by occupation rent in respect thereof in addition to the accounting for the rent realised or which could not have been realised in the ordinary course by the plaintiff as mortgagee.',
	(int) 4 => '<p>4. The trial court found that this was an anomalous mortgage. There was no fraud or undue influence brought to bear in the execution thereof. The mortgagee is not entitled to compound interest claimed by him. The property referred in Schedule 'C to the mortgage is in possession of one Mahadeo Prasad while the possession over the property referred in Schedule 'B' is of the mortgagor himself. The plaintiff is not entitled to recover Rs. 4,000/-or any other amount by way of litigation expenses. The plaintiff mortgagee has to render accounts and it is incumbent upon him to hand over possession to the mortgagor in respect of Items 1 and 2 of Schedule 'A'. After making adjustment in respect of fair occupation rent etc. the court below has passed a decree for Rs. 32,054/-and also directed that an account be taken of what was due to the plaintiff on the date of the decree both towards the principal and the interest. In case the defendant pays up the amount within six months from the date of the decree, the mortgagee shall deliver possession of the shops mentioned as items 1 and 2 of Schedule 'A' to the defendant. Upon failure of the defendant to pay up the amount under the decree and as ascertained upon accounting, the plaintiff could get the property sold in satisfaction thereof.',
	(int) 5 => '<p>5. Aggrieved, the plaintiff has preferred this appeal claiming recovery of the balance in respect whereof the suit has not been decreed. I have heard learned counsel for the parties and perused the record.',
	(int) 6 => '<p>6. Let us at the outset analyse the terms and conditions of the mortgage dt. Jan. 7, 1961 the execution-whereof is not in dispute, vide Ex. 29. The appellant is the mortgagee. The consideration for the mortgage was a sum of Rs. 23,000/-. The interest stipulated therein is 12% per annum simple. There is no provision for compound interest in the instrument. The property mortgaged is comprised in Schedules 'A', 'B' and 'C' of the mortgage deed. Schedule 'A' consists of three items being shops in Gorakhpur city. These were in occupation of Bishram, Inderdeo Singh and Daya Ram on rent at the rate of Rs. 42/-30/- and 30/- per month respectively. The stipulation is that the mortgagee shall be entitled to realise Rs. 102/- per month and set it off towards interest due on the deed of mortgage. The property referred to in Schedules 'B' and 'C' comprises of land. The provision made is that in case the mortgagee is put in possession over this property, he shall be deemed to be tenant in respect thereof for and on behalf of the mortgagor on rent at the rate of Rs. 58/- and Rs. 40/- per month and in that situation the sum of Rs. 128/-per month was also to be set off towards interest. In case the mortgagee does not get possession over these items of property, the mortgagor shall be bound to pay that much of amount in cash towards interest. The period for repayment was stipulated as four years. Adding that, in the event of the failure, on the part of the mortgagor to pay up, the plaintiff shall be entitled to realise the same by sale of the mortgaged property.',
	(int) 7 => '<p>7. Controversy raised before me is also in regard to the true character of this transaction in the eye of law. Sri Jagdish Swarup, learned counsel for the appellant, argued that the mortgage is simple. For the respondent, Sri Rajeshwari Prasad, submits, on the other hand, that it is usufructuary and, in the alternative, even if this be anomalous, there is no material difference in law. Upon a close scrutiny of the terms and conditions of the transaction in its entirety, it appears clear to me that the mortgage may not be classed either as usufructuary or simple. The mortgage stipulates that, in the event of failure on the part of the mortgagor to pay up the amount due under the mortgage within the specified period of four years, it shall be open to the mortgagee to make realisation of the same by sale of the property mortgaged. This evidently construes characteristical feature of a simple mortgage, defined in Section 58(b) of the T.P. Act. And yet the mortgage is not purely simple either. The reason is that under the mortgage deed the mortgagee is given constructive, if not actual, possession over the shops mentioned in Schedule 'A' with the right to realise Rs. 102/- per month being the rent thereof from the respective tenants. It is further provided, as mentioned above, that the mortgagee shall be entitled to be in possession over the land mentioned in. Schedules 'B' and 'C. According to the definition of 'usufructuary mortgage' in Section 58(b), T.P. Act, where the mortgagor delivers possession expressly or by implication binds 'himself to deliver possession of the mortgaged property to the mortgagee and authorises him to retain such possession until the payment of the mortgage and to receive the rent or any part of such rent and to appropriate the same in lieu of interest even if it be partly in lieu of interest and partly in payment of mortgage-money, the transaction is a usufructuary mortgage. These terms, therefore, partake the features of a usufructuary mortgage. The mortgage in question being neither purely simple nor usufructuary exclusively, but a mixture of the two, it is an anomalous mortgage within the meaning of Clause (g) of Section 58 as the court below also rightly found.',
	(int) 8 => '<p>8. Now, it is not in dispute that the appellant was at no stage put in possession over the land in Schedules 'B' and 'C'. The respondent admits this in paras 21 and 22 of the written statement and in his statement made on oath. No question of set off towards interest on this account consequently arises. In regard to the property in Schedule 'A', the story, however, is different and I propose to deal with the three items separately.',
	(int) 9 => '<p>Item I. The shop referred to against this item was admittedly in occupation of one Bishram as tenant for and on behalf of the mortgagor on rent at the rate of Rs. 42/-per month when the deed of mortgage was executed. The appellant was given a right under the transaction to realise rent from the tenant and to appropriate the same towards interest. For rent up to the period of Aug. 1961 the appellant, the mortgagee, instituted original Suit No. 414 of 1961 in the court of Small Causes against Bishram, the tenant and this was decreed in his favour vide para 5 of Ex. A-7. For the period of Sept. to Dec. 1961 the rent was paid to the appellant by Bishram and for Jan. 1962 onwards there was decree passed for a sum of Rs. 336/- on July, 15, 1963 in Original Suit No. 639 of 1962 brought by the mortgagee in the civil court, vide Ex. A-5. Therefore, in regard to this item of the property, the plaintiff mortgagee would be entitled to account for rent realised at the rate of Rs. 42/- per month for the period of Jan. to Dec. 1961 and Rs. 336/- covered under the decree towards the rent from the month of Jan. 1962 and onwards. The mortgagee obtained possession over this item of property on July 21, 1964 vide Ex. A-6 and from that date onwards he would be liable for fair occupation rent as will presently appear.',
	(int) 10 => '<p>Item 2 : The shop referred to against this item was held on rent by one Inder Deo Singh for and on behalf of the mortgagor when the deed of mortgage came into being. The rent was Rs. 30/- per month. It was up to the appellant to have taken the requisite steps for the realisation of the rent. From para 6 of the plaint in Original Suit No. 413 of 1961 filed in the court of the Small Causes, vide Ex. A3, it is clear on the mortgagee's own showing that no steps were taken by him towards realisation of rent for the period of Jan. to Apr. 1961 from this tenant. The suit suit brought was for the period of May, 1961 covering a sum of Rs. 120/- for rent alone. The respondent did not contest the suit. It may not be said consequently that there was obstruction created by him towards the realisation of this rent. The suit was decided in favour of the mortgagee on Nov. 23, 1961 vide copy of the decree Ex. A.4 and the mortgagee came in possession over this item of the property in the month of May, 1965. Accordingly the rent adjustable towards this item shall be Rs. 30/- per month from Jan. 1, ' 1961 to Apr. 1965 and thereafter beginning from May, 1965 the liability of the mortgagee would be accounted for the fair occupation rent.',
	(int) 11 => '<p>Item No. 3 : -- The shop referred to against this item was held by Daya Ram as tenant at the rate of Rs. 30/- per month. The plaintiffs contention is that no amount of pent could be recovered by him regarding this item despite best efforts made by him nor could he obtain actual possession over this shop. The record bears this out as well. He instituted Original Suit No. 457 of 1963 to recover rent from Daya Ram for the period of May to Aug. 1961 being a sum of Rs. 120/-. He also filed Original Suit No. 456 of 1963 for rent from Sept. 1961 to Aug. 1962 against this tenant. To both these suits Smt. Ram Piari, wife of Phuddi Singh, respondent No. 1 put in contest. She filed her written statements disputing the right of the appellant to recover any rent in respect of this shop and pleaded that the rent had been paid to her by the tenant up to the period of 31st Mar. 1963. In the result, Original Suit No. 457 of 1963 failed and the other suit No. 456 of 1963 came to be withdrawn. In face of this state of pleadings of Smt. Ram Piari and the ultimate result of these two suits, it may not be urged reasonably that the appellant came in possession or realised any rent of the shop from Daya Ram. No adjustment may, therefore, be claimed so far as this item of property is concerned.',
	(int) 12 => '<p>9. Sri Jagdish Swaroop, learned counsel for the appellant, contends that the respondent may not claim possession over any item of the property mortgaged in the suit instituted by the appellant plaintiff for recovery of the mortgage-amount by sale thereof. The argument advanced is that the possession of the appellant over Items 1 and 2 of Schedule 'A' is not in capacity as the mortgagee. Even if his possession is taken to be wrongful or that of a trespasser or obtained in pursuance of a decree wrongfully passed, the mortgagor may not be entitled to get possession of the same as a condition for the repayment of the amount due. The contention, in my opinion cannot be sustained. It is true that in the mortgage deed there is no stipulation to the effect that the mortgagee shall be placed in actual possession over the three items of Schedule A, but it is provided nonetheless that he shall be entitled to realise the rent from the tenants of the plaintiff and it is on the basis of this stipulation contained in the mortgage deed as also of taking advantage of this transaction that the mortgagee could get possession over items 1 and 2. In all the suits which he filed against the respective tenants, the reliance placed was upon the mortgage transaction and there was the relationship of landlord and tenant claimed on the footing thereof. Order 34, Rule 4, C.P.C. relating to preliminary decree in suit for sale provides as well that if the plaintiff succeeds in such a suit, the Court shall pass a preliminary decree to the effect mentioned in Rule 2(1) directing, inter alia, that if the defendant pays into Court the amount found or declared due on or before the date as the court may fix within six months, the plaintiff shall put the defendant in possession of the property. Rule 4(1) has in this connection to be read along with Rule 2(1)(c)(i) as the: respondent's counsel rightly points out. Form 5A of Appendix D of the Code relating to preliminary decree for sale under Order 34, R. 4 is also to the same effect. It is not of material consequence, therefore, that the suit giving rise to the appeal is not by the mortgagor for redemption but instead by the mortgagee for recovery of the amount due. A reference to Section 60(b), Transfer of Property Act also suggests that, in the event of the amount due under the mortgage being paid, the mortgagee may be required to deliver to the mortgagor possession over the property mortgaged. The mortgagor may thus claim back possession even where the mortgage is not usufructuary pure and simple in character and the decree passed in for sale of the property in the event of the amount due being not repaid. But for the transaction of the mortgage coming into being, the plaintiff appellant would not have been in a position to get possession, as he did, over any of the items of the property in dispute. It is by mere availing of his position as the mortgagee that he got possession over items 1 and 2 as is revealed also from the averments made by him in the plaints of the suits which he brought against the respective tenants and in all fairness upon the amount due being cleared, it does not remain open to him to contend that his possession is not in capacity as the mortgagee or that' he is not obliged to deliver' back the same to the mortgagor.',
	(int) 13 => '<p>10. A mortgagee in possession may be either in actual possession of the property or in receipt of rents and profits, thus depriving the mortgagor of control. So far as these rents are payable under leases already existed at the date of the mortgage, or made subsequently thereto by the authority of the mortgagee; the mortgagee is entitled to the benefit of the leases, and on taking possession can enforce payment of all future rent and all arrears due at the time. The existing lease has the same effect as if the mortgagee had concurred therein. The position of the mortgagee thus gaining possession over the items of the property mortgaged and of affecting the respective tenants would be akin to that of a trustee. The Supreme Court in Dahya Lala v. Rasul Mohomed Abdul Rahim : [1963]3SCR1 observed that a mortgagee in possession is excluded from the class of deemed tenants on grounds of public policy. To confer that status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. In C. Vencatachariar v. Srinivasa Aiyanger, (1909) 4 Ind Cas 357 the Madras High Court took the view that where the mortgagee is not entitled to include the lands acquired from tenant in his patta or to make any disposition of the mortgaged property in his own favour and of such a kind as to give rise to a possible conflict between his interest and his duty, the mortgagee occupies the position of trustee to the mortgagors and is bound to deliver to the mortgagor the same at redemption. The Privy Council ruled in Sri Rajah Papamma Rao Bahadur v. Sri Vira Pratapa Korkonda H. V. Ramchandra Raju, (1896) 23 Ind App 32 that where under decree upon a 'simple mortgage' a mortgagee obtains possession of the mortgaged property instead of a judicial sale, such decree does not import foreclosure. The possession obtained thereunder is to be considered as that of mortgagee and it involves liability to account and to be redeemed. In Janki Singh v. Devi Nandan Prasad, (1910) 17 Ind Cas 772 a Division Bench of the Calcutta High Court was of the view that in certain respects and for certain purposes the mortgagee in possession is a trustee for the mortgagor and cannot take advantage of that position to the detriment of the mortgagor. In equity also the appellant being in possession virtually as a trustee vis-a-vis the respondent mortgagor may not decline to deliver possession over the property in his possession in the event of the mortgage amount being satisfied.',
	(int) 14 => '<p>11. The submission made next for the appellant is that Section 76(g), Transfer of Property Act, applies to a case of usufructuary mortgage only and the respondent may not, therefore, seek to eject the tenant thereof. I am unable to agree. The provision so far relevant under Section 76 is that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property, he must keep clear, full and accurate accounts. It is the duty of the mortgagee when he takes possession of the mortgaged property to maintain it as if it were his own. The duty is similar to a care-taker or a trustee.',
	(int) 15 => '<p>The law treats his position as that of a mortgagee, as explained above, on the ground that by a wrongful act a man may acquire no right and yet become subject to the responsibility of possession wrongfully assumed by such act. Statutory obligation is cast by Section 76(g) to maintain the accounts and to show that they are supported by requisite vouchers. The provisions of Section 76, it has been held, are not limited to usufructuary mortgagee or to a mortgagee who is entitled to claim possession on the basis of the terms of the mortgage bond. The opening words of Section 76 are 'quite general and they include a mortgagee who obtains possession of the mortgaged property. Although, therefore, a mortgagee may not be entitled to claim possession on. ihe basis of the covenant contained in the mortgage bond and if for any other reason he enters into possession as a mortgagee he would still be liable to fulfil the conditions laid down in Section 76. Fair occupation rent may be credited towards income where he has failed to keep or maintain the accounts vide Suratsing Chandanmal v. Nomanbhai Abdulhussein Bohar (AlR 1961 Bom 43) (Division Bench). I am in respectful agreement with this view. A Full Bench of this Court also ruled in Mohammed Ishaq v. Rup Narain Singh : AIR1931All562 that the liability of mortgagee in possession under Section 76(h) to give credit for the receipts after deducting the expenses and interest in the account is absolute unless the case comes within the purview of Section 77. The liability is in respect of the rent actually realised and extends also to such rent as the mortgagee could have with due diligence and bona fide realised from the respective tenants. Except for the obstruction which Smt. Ram Piari, respondent's wife, placed in relation to Daya Ram, as discussed above, it is not disclosed that the respondent has, in any manner, interfered in realisation of rent due by the appellant. The appellant admits in his deposition that the respondent had given notice to the tenants to attorn to him and as I have mentioned above the respondent did not put any contest to the suits brought by the appellant for recovery of rent due. The appellant may not consequently escape the liability in respect of the rent not realised by him in the ordinary course, see also Mahadeo Tamoli v. Mohd. Sidiq AIR 1949 All 189.',
	(int) 16 => '<p>12. A reference may in this connection be appropriately made to the following observations appearing in Snell's Principles of Equity (27th ed.) at pages 393-94 :',
	(int) 17 => '<p>'A mortgagee jn possession is liable to account to the mortgagor for the rents and profits, and his liability to account does not cease because he in fact abandons possession, for he has no right to give up possession whenever he likes. He also cont-inues accountable even after transferring the mortgage, and is still liable for any default made by the transferee, unless the transfer is made by order of the Court, or with the mortgagor's concurrence. But he 'will be relieved from liability to account if the Court appoints a receiver,' as in special cases it will do, or if he himself appoints a receiver under the statutory power.',
	(int) 18 => '<p> 2. 'Wilful Default'. A mortgagee in possession is liable to account on the footing of 'wilful default' that is, he must account not only for sums actually received by him but also for sums which, but for his own default, he might have received. Thus a mortgagee of a public-house who takes possession of his security and lets it as a tied house (e.g. subject to a covenant to take only the mortgagee's own beers) will be accountable for the rent he might have obtained had he let the house as a free house (i.e. without restriction as to the purchase of beer), and not merely for the rent he actually obtains. He is also liable to account for rent if he could have let the property but did not, or if he fails to recover the rent in full from tenants able to pay it. And if the mortgagee himself occupies the mortgaged premises, he will be liable for an occupation rent based on' the highest possible rental value of the premises. But the mortgagee, is not accountable for purely collateral advantages which do not affect the mortgagor, such as the profits made by him in supplying beer to a public house of which he has taken possession under the mortgage.' ',
	(int) 19 => '<p>13. For the discussion made in the above, the appeal succeeds in part only. The plaintiff-appellant shall be entitled to recover :',
	(int) 20 => '<p>(i) a sum of Rs. 23,000/- being the principal under the mortgage.',
	(int) 21 => '<p> (ii) interest at the rate of 12% per annum simple. ',
	(int) 22 => '<p>14. The respondent is entitled to the adjustment of the following :',
	(int) 23 => '<p>(a) rent for the period of Jan. to Dec. 1961 at the rate of Rs. 42/- per month and Rs. 336/-towards rent from Jan. 1962 onwards, in addition to the fair occupation rent at the rate of Rs. 75/- per month calculated from July 21, 1964 in respect of Item 1 of Schedule 'A'.',
	(int) 24 => '<p> (b) rent at the rate of Rs. 30/- per month for the period of Jan. 1961 to Apr. 30, 1965 and in addition fair occupation rent from May 1, 1965 at the rate of Rs. 75/- per month in regard to Item 2 of Schedule A.',
	(int) 25 => '<p> (c) The respondent shall be entitled also to the delivery of possession in respect of Items 1 and 2 of Schedule A upon the balance of the mortgage amount if any being repaid within a period of three months from this date. ',
	(int) 26 => '<p>The preliminary decree passed by the Court below shall stand modified accordingly. Costs of this appeal shall be borne by the parties.',
	(int) 27 => ''
)
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Subject	Property
Court	Allahabad High Court
Decided On	Mar-12-1986
Case Number	First Appeal No. 97 of 1972
Judge	B.D. Agarwal, J.
Reported in	AIR1987All155
Acts	Transfer of Property Act, 1882 - Sections 58, 60 and 76; Code of Civil Procedure (CPC) , 1908 - Order 34, Rules 2(1), 4 and 4(1)
Appellant	Munni Lal
Respondent	Phuddi Singh
Appellant Advocate	S.R. Misra and ;J. Swarup, Advs.
Respondent Advocate	Rajeshwari Prasad, Adv.
Disposition	Appeal allowed

Munni Lal Vs. Phuddi Singh - Court Judgment