Kidar Lall Seal & ANR Vs. Hari
Lall Seal  INSC 59 (18 December 1951)
BOSE, VIVIAN FAZAL ALI, SAIYID
CITATION: 1952 AIR 47 1952 SCR 179
CITATOR INFO :
D 1971 SC2177 (7) RF 1978 SC1329 (28)
Transfer of Property Act (IV of 1882), ss.
82, 92--Indian Contract Act (IX of 1872), s. 43--Mortgage--Contribution between
co-mortgagors--Liability to contribute--Whether proportionate to value of
properties mortgaged, or benefit derived by each mortgager General and special
The right to contribution as between
co-mortgagors is governed by ss. 82 and 92 of the Transfer of Property Act and
not by s. 43 of the Indian Contract Act, inasmuch as s.
43 of the Contract Act deals with contracts
generally, while ss. 82 and 92 of the Transfer of Property Act specifically
deal with the right of contribution between co-mortgagors.
It is an established principle that when
there is a general law, and a special dealing with a particular matter, the
special excludes the general. Consequently, in the absence a contract to the
contrary, co-mortgagors are bound to contribute proportionately to the value of
the shares or parts of the mortgaged property owned by them and not in
proportion to the extent of the benefits derived by each of them.
As ss. 82 and 92 of the Transfer. of Property
Act prescribe the conditions in which contribution is payable in India when
there is a mortgage, it is not proper to introduce into the matter extrinisic
principles based on equitable considerations.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 101 of 1950. Appeal by special leave from the Judgment and Decree dated the
20th September, 1949, of the High Court of Judicature at Calcutta (Hurries
C.J.and Chatterice J.) in Appeal No. 46 of 1949 arising out of Decree dated the
31st August, 1948, of the Hon'ble S.B. Sinha J. of the Calcutta High Court in
Suit No. 343 of 1943 instituted under the Original Jurisdiction of the High
M.C. Setalvad, Attorney-General for India (B.
Sen, with him) for the appellant.
S.C. Isaac (B. Barterice, with him) for the
1951. December 18. The leading judgment was
delivered by Bose J. Fazl Ali J. agreed, 180 Bose J.--This is a defendant's
appeal in a suit for contribution brought by the son of a mortgagor against the
The parties are related as below :-Balai Lall
Seal (died1917) I Megharnala Dassi (died 1945) I I I I I Bejoy Lall Biswa Lall
Tarak Lall Kedar Lall NakuLall (D. 23-5-33) (D. Nov. 1936) Deft 1 Deft. 2 (Born
(Born I I Jugal Lall Hari Lall 22-11-1907) 7-2-1910) (Plff.) The mortgagors
were the plaintiff's father Tarak Lall and Tarak's two brothers Kedar and Naku.
The mortgage was executed on the 12th June, 1936, in favour of one Mst. Gyarsi
for a consideration of Rs. 80,000. For convenience I will call this the suit
mortgage though this is not a suit on the mortgage.
The mortgagee sued in the year 1938 and
obtained a preliminary decree for sale on the 17th of February, 1939, for a sum
of Rs. 89,485-12-9 plus costs. The decree was made final on the 22nd of
In execution the mortgagee proceeded against
the property of the plaintiff alone (as Tarak's son) and, during the pendency
of the execution, assigned her rights in the decree to the Hooghly Flour Mills.
The Mills continued the execution and on the 11th of March, 1943, the claim was
satisfied in this way.
An order of the Court was obtained
sanctioning sale of a part of the mortgaged property, 20 Round Tank Lane (which
belonged exclusively to the plaintiff), to the decree-holder for a sum of Rs.
1,50,000. It was directed that the consideration should first be applied in
payment of the claim and costs and that the decreeholder should execute a
reconveyance of the rest of the mortgaged properties in favour of the mortgagors.
The sanction of the Court was necessary because the judgment-debtor Hari Lall
(present plaintiff) was a minor.
181 This was done and 20, Round Tank Lane,
was conveyed by the present plaintiff to the Hooghly Flour Mills on the 18th of
March, 1943. Out of the consideration a sum of Rs. 97,116-11-0 was paid to the
Mills in lull satisfaction of the claim and costs then outstanding. The Mills
executed a reconveyance of the rest of the properties to the mortgagors in
release of the mortgage on the same day.
In addition to this Rs. 97, 116-11-0, further
sums of Rs. 14,400 and Rs. 8,100 had also been paid before the dates of these
transactions. These sums were paid by a Receiver who had been appointed by the
Court pendente lite. These sums came out of the rents which the Receiver
obtained from the plaintiff's property, 20 Round Tank Lane.
The plaintiff says that in this way he paid a
total of Rs. 1,19,116-11-0 in satisfaction of the mortgage. His onethird share
in this comes to Rs. 39,872-3-8. He claims that he is entitled to receive the
balance of Rs. 79,744-7-4 from the two defendants and that each of them is
liable for a half of that sum namely, Rs. 39,872-3-8.
In addition to this the plaintiff had
incurred costs amounting to Rs. 1,144-8-6 in resisting Mst. Gyarsi's claim and
in connection with the reconveyance. He also claims one-third of this sum,
namely Rs. 381-8-2, from each of the defendants. The total claim against each
defendant accordingly comes to Rs. 40,253-11-10. In addition to this the
plaintiff asked for(1) "a declaration that the properties mentioned in
Schedule 'A'...belonging to the defendants stand charged with the repayment of
the sum of Rs. 80,507-7-8 being the aggregate amount due and payable by the two
defendants," and (2) "Decree under Order XXXIV of the Civil Procedure
Code in proper form." Schedule A contains a list of the rest of the
mortgaged properties which belong exclusively to the defendants, 24 182 It will
be seen that the plaintiff claims on the basis that each of the three mortgagors
is liable to contribute in equal shares towards payment of the mortgage debt.
The defendants did not deny their liability
They only challenged the basis on which it
was to be computed. They ,pleaded a special agreement between Tarak Lal and
themselves under which their liabilities were to be calculated in the following
way. According to them, the bulk of the Rs. 80,000 was borrowed on what I have
called the suit mortgage to pay off previous debts which had been incurred by
the parties on earlier mortgages. The amount which went towards satisfaction of
the defendant's portion of these earlier liabilities was only Rs. 13,259-2-4.
Therefore, the only benefit they got out of this Rs. 80,000 was to that extent.
The plaintiff's father Tarak on the other hand benefitted to the extent of Rs.
53,481-11-4. They therefore agreed at the date of the suit mortgage that their
respective liabilities as between themselves should be proportionate to the
benefit derived by each as above.
Sinha J., who tried the suit on the Original
Side of the Calcutta High Court, held that the agreement was proved.
On appeal the learned Chief Justice of the
High Court and Chatterjee J. disagreed and held that it was not. As I agree
with the learned appellate Judges for reasons which I shall give hereafter, it
will be necessary to set out the further facts. But I need not do so in any
detail as they are given in full in the two judgments of the High Court. We are
only concerned here with the question of principle; so it will be more
convenient to reduce the problem to its simplest terms.
We are concerned here with four items of
property which I shall term Chittaranjan Avenue, Strand Road, No. 16 Round Tank
Lane and 20 Round Tank Lane. These properties were originally joint family
properties, but in the year 1932 there was a partition which was compelled by
reason of a suit filed by Tarak 183 against his brothers and mother. The upshot
was that the properties were divided as follows: (1) Bejoy, Kedar, Naku and the
mother Meghamala obtained Chittaranj an Avenue.
(2) Tarak (plaintiff's father) obtained 16
Round Tank Lane and 20 Round Tank Lane.
(3) Kedar, Naku and Biswa Lall obtained
Before this partition there were three
mortgages: The first of these was executed on the 16th of June, 1925. All five
brothers joined in it and they mortgaged the Strand Road property for Rs.
10,000. This was in favour of Bhuvan Chandra Bhur.
The second was on the 11th of October, 1926.
In this Bejoy and Tarak mortgaged their 2/5 share in Chittaranjan, Strand, Dum
Dum and 20 Round Tank Lane for Rs. 5,000. The mortgagee was Binode Behari Sen.
The third was on the 28th January, 1927. In
this Bejoy and Tarak again mortgaged their 2/5 share in the same items of
property for Rs. 7,000 to Binode Behari Sen and Kunja Behari Sen.
All three sets of mortgagees, or their
representatives, instituted suits on their respective mortgages and obtained
final decreesBejoy died on the 23rd of May, 1933, leaving a son Jugal.
On the 12th of June, 1936, came what I have
called the suit mortgage executed by the three brothers,Tarak, Kedar and Naku,
for Rs. 80,000. The properties mortgaged were(1) the shares of Kedar and Naku
in Chittaranjan Avenue and 16 Round Tank Lane;
(2) 20 Round Tank Lane which had been
allotted to Tarak;
(3) the reversionary interest of all three in
the share allotted to the mother.
The consideration of Rs. 80,000 was expended
as follows:Rs. 29,667-10-0 was paid by Tarak, Kedar and Naku in satisfaction of
the first mortgage and the 184 later decretal charge; Rs. 11,519-11-0 in
satisfaction of the second and Rs. 13,502-14-0 in satisfaction of the third.
The balance of Rs. 25,310 is alleged by the
appellants to have been retained by Tarak. I have taken these figures from the
judgments of the High Court. I understand some of the details are disputed, so
I make it clear that I am not setting out the decision of this Court regarding
the details but only giving an overall picture.
Shorn of overburdening detail the problem,
reduced to its simplest terms, comes to this. Three persons A, B and C
separately own properties of unequal value, Blackman, Whiteacre and Greenacre.
Let us assume that their values at the material date are Rs. 30,000, Rs. 20,000
and Rs. 10,000 respectively.
A, B and C, acting in various combinations
from time to time, incur debts. It matters not for present purposes whether
those debts are secured on these properties or not because a time must come
when their separate liabilities as amongst themselves have to be ascertained
Let us assume that when that is done, A's
responsibility extends to Rs. 2,000, B's to Rs. 3,000 and C's to Rs. 5,000.
In order to clear off these debts, A, B and C
jointly mortgage their three estates for Rs. 10,000, the total aggregate sum
due at the date of the mortgage from the three of them. There is no contract
between them, either in the mortgage deed or otherwise, regarding their
respective shares of responsibility in the Rs. 10,000.
At the date of redemption the mortgage debt
has swollen to Rs. 15,000. A alone redeems by selling Blackacre, which is his
separate estate, to the mortgagee for Rs. 35,000 that being the value of
Blackacre at the date of redemption. Rs.
15,000 of this is applied in satisfaction of
the mortgage debt and the balance of Rs. 20,000 is retained by A. What are A's
rights as against B and C ? Three solutions readily suggest themselves. One is
that the three contribute equally. In that event B would pay A Rs. 5,000 and C
would pay Rs. 5,000.
185 A second solution is that they pay in
proportion to the extent of the benefits derived. In that event B's share would
be 3/10 of Rs. 15,000, that is to say, Rs. 4,500. and C's would be 5/10 of Rs.
15,000, that is Rs. 7,500.
A third solution is that they pay proportionately
to the values of the properties mortgaged. In that event B would have to pay
2/6 of Rs. 15,000, that is Rs. 5,000, and C 1/6 of Rs. 15,000' which come to
The problem is to know which of these three
solutions to apply. In the absence of other considerations, the most equitable
solution is obviously the second. But the matter is not as simple as that.
There are certain statutory provisions which must first be examined.
The learned counsel for the
plaintiff-respondent contended that section 43 of the Contract Act applied. He
relied on the following provision :"Each of two or more joint promisors
may compel every other joint promisor to contribute equally with himself to the
performance of the promise, unless a contrary intention appears from the
If any one of two or more joint promisors
makes default in such contribution, the remaining joint promisors must bear the
loss arising from such default in equal shares." The argument is that
unless a contrary intention appears from "the contract" the. loss
must be borne equally. It was contended, and with that I agree, that the words
"the contract" can only refer to the main contract between the
promisors on the one side and the promisee on the other.
That contract in this case is the suit
mortgage. There is no contract to the contrary in the document, therefore, it
was contended, and the section must apply. That of course would be the clear,
logical and simple conclusion ii there were no other provision of law to
consider. But we are dealing here with a mortgage and so we have also to look
to the provisions of the Transfer of Property Act.
186 Incidentally, if this argument is pushed
to its logical conclusion it would exclude any collateral or subsequent
agreement between the promisors inter se which does not appear in the main
contract. But we need not enter into that here.
The sections of the Transfer of Property Act
which concern us are 82 and 92. The first confers a right of contribution. The
second a right of subrogation. I will consider section 82 first. It runs
:-"Where property subject to a mortgage belongs to two or more persons
having distinct and separate rights of ownership therein, the different shares
in or parts of such property owned by such persons are, in the absence of a
contract to the contrary, liable to contribute rateably to the debt secured by
the mortgage ......... " That is the position here.
Next I turn to section 92. That runs-"
...... any co-mortgagor shall, on redeeming property subject to the mortgage,
have, so far as regards redemption, foreclosure or sale of such property, the
same rights as the mortgagee whose mortgage he redeems may have against the
mortgagor ...... " That also applies.
Now these provisions at once raise a
competition between sections 82 and 92 of the Transfer of Property Act, section
43 of the Contract Act and what I might term the principle of beneficial, as
opposed to proportionate or equal, distribution of liability.
I am of opinion that the second solution
adumbrated earlier in this judgment, based on equities, must be ruled out at
once. These matters have been dealt with by statute and we are now only
concerned with statutory rights and cannot in the face of the statutory
provisions have recourse to equitable principles however fair they may appear
to be at first sight.
The Privy Council pointed out in Rani Chhatra
Kumari v. Mohan Bikram (1) that the doctrine of the (1) (1931) I.L.R. 10 Pat.
851 at 869.
187 equitable estate has no application in
India. So also referring to the right of redemption their Lordships held in
Mohammad Sher Khan v. Seth Swami Dayal(1) that the right is now governed by
statute, namely section 60, Transfer of Property Act. Sulaiman c.J. (later a
Judge of the Federal Court) ruled Court equitable considerations in the
Allahabad High Court in matters of subrogation under sections 91, 92, 101 and
105, Transfer of Property Act, in Hira Singh v. Jai Singh(2) and so did Stone
C.J. and I in the Nagpur High Court in Taibai v. Wasudeorao (3). In the ease of
section 82 the Privy Council held in Ganesh Lal v. Charan Singh(4) that that
section prescribes the conditions in which contribution is payable and that it
is not proper to introduce into the matter any extrinsic principle to modify
the statutory provisions. So, both on authority and principle the decision must
rest solely on whatever section is held to apply.
So far as section 43 is concerned, I am not
prepared to apply it unless sections 82 and 92 can be excluded. Both sections
43 and 82 deal with the question of contribution.
Section 43 is a provision of the Contract Act
dealing with contracts generally. Section 82 applies to mortgages. As the right
to contribution here arises out of a mortgage, I am clear that section 82 must
exclude section 43 because when there is a general law and a special law
dealing with a particular matter, the special excludes the general. In my
opinion, the whole law of mortgage in India, including the law of contribution
arising out of a transaction of mortgage, is now statutory and is embodied in
the Transfer of Property Act read with the Civil Procedure Code. I am clear we
cannot travel beyond these statutory provisions.
Now, when parties enter into a mortgage they
know, or must be taken to know, that the law of mortgage provides for this very
question of contribution. It confers rights on the mortgagor who redeems and
directs that, in the absence of a contract to the contrary, he (1) (1922) 49
I.A. 60 at 65. (3) I.L.R. 1938 Nag. 206 at 216.
(2) A.I.R. 1937 All. 588, at 594. (4) (1930)
57 I.A. 189.
188 shall be reimbursed in a particular way
out of particular properties. The parties are at liberty to vary these rights
and liabilities by special contract to the contrary but if they do not do so, I
can see no reason why these provisions should be abrogated in favour of a
section in the Contract Act which does not deal with mortgages. Slightly to
vary the language of the Judicial Committee it is the terms and nature of the
transaction viewed in the light of the law of mortgage in India which exclude
the personal liability and therefore section 43, except where there is a
contract to the contrary.
It was suggested that the rule is inequitable
and will operate harshly in cases like the present. But the remedy lies in the
parties' own hands. It is open to them to make a contract to the contrary. If
they do not, then the law steps in and makes statutory rules to which effect
must be given. It is not for judges to consider whether that is the best
possible solution but the rule at any rate obviates the necessity of roving
enquiries into the objects of a borrowing and the application of the funds. On
an overall basis it is perhaps as good as any other. But that hardly matters.
The rule is there and full effect must be
given to it.
The learned counsel for the
plaintiff-respondent urged that the defendants are shut out from relying on
section 82 because that was not their case and the question was never raised by
them in the High Court. Such reference as there is to the section was with
reference to an argument urged on behalf of the plaintiff. I am not impressed
with this objection., On the facts set out by the plaintiff it is evident that
he is entitled to contribution. The method of computation is a matter of law
and it is for the judges to apply the law to the facts stated and give the
plaintiff such relief as is appropriate to the case.
I turn now to the question of fact, the
special agreement pleaded by the defendants. The only evidence in support of it
is that of the first defendant Kedar. According to him, the agreement was an
oral one 189 though the parties contemplated writing and registration.
His explanation for lack of any writing is
this. He was asked whether anything was put down in writing and he replied
:"No, nothing was done then, but there was an understanding that it would
be done but Tarak went away to Darjeeling and when he came back he died soon
after he came back and nothing could be done in writing." Later, he was
asked" Therefore, you, contemplated that there would be a document which
would have to be registered in connection with the adjustment ?" and he
replied' 'Yes". He also tells us that the parties regarded the matter as
confidential and so only three persons were present, Tarak, Naku and himself.
It is to be observed that Naku, who is the second defendant, has not entered
Stopping there, it is evident that we have to
rely on the memory of a very interested person speaking nearly thirteen years
after the event about a transaction affecting some Rs. 80,000. Nor is it the
memory of some simple event which might well have fixed itself in his mind. The
question whether and at what stage parties reach finality when writing is in
contemplation is a difficult and complex one involving delicate considerations
of much nicety even when the preliminaries are all in writing. The turn of a
phrase here, the use of a word there, may make a world of difference. The law
regarding this was examined by me at some length in the Nagpur High Court in
Shamjibhai v. Jagoo Hernchand Shah (1). How much greater are the difficulties
when we do not know the exact words the parties used and have to delve into the
mind of a dead man (Tarak) through the impressions of an interested witness
given some thirteen years after the event.
I find it difficult to accept this version
and consider it would be dangerous to do so, particularly when the (1) I.L.R.
1949 Nag. 381 at 586-588, and 598 25 190 witness is a hesitant and reluctant
one, as his examination discloses, and even evasive on some points; also when
the defendants have deliberately withheld from the Court assistance which it
was in their power to render--I refer to the absence of Naku, the only other
person present, from the box. I am unable to accept this testimony.
Nor is this the only point. Despite the
insistence of the witness that the parties were on good terms and trusted each
other, the fact remains that Tarak found it necessary to institute a suit for
partition against his brothers and fight it to a finish. They were not able to arrange
matters amicably. it was suggested in argument that was probably because of
creditors who could not be persuaded to agree and it was pointed out that
creditors were joined in the suit, but that is not wholly convincing
particularly when it is admitted that Tarak was insisting on writing and
It is evident that he, at any rate, was not
prepared to leave matters as they were and trust to the good faith of his
Now we know that Tarak was in Calcutta about
three months after the date of the alleged agreement. We also know that Kedar
was most anxious to have such an agreement, for he tells us so. He tells us
further that there was before them a rough draft of the terms. That document
was produced in Court. But the draft was neither signed nor initialled.
The only inference I can draw from these
facts is that Tarak either refused to agree or had not made up his mind. The
figures put forward by the defendants were contested on behalf of the plaintiff
and we were given an alternative set of figures which in turn were contested by
the other side, but they were enough to show that the matter is not as
straightforward or as simple as the defendants would have us believe.
Therefore, Tarak's inaction during the three months and the omission of either
side to initial the draft point clearly, at the lowest, to hesitancy on Tarak's
It may be he wanted his lawyers to examine
his position or it may be he refused to have anything to do with it.
191 It is just possible that there were
negotiations, but on those broad facts I am not prepared to believe the witness
when he tells us, or rather suggests, that the parties reached finality. It
would in any event be dangerous to believe a witness in circumstances like
this. But when the defendants deliberately withheld from the Court that
assistance which is its due I can only conclude that their case was too shaky
to stand further proving. On these broad grounds alone I would hold that the
agreement is not proved.
Much was made in argument about the rule
regarding the weight to be given to the estimate of the judge who saw and heard
a witness. I do not doubt the soundness of the rule but it can be pushed too
far as their Lordships of the Judicial Committee pointed out in Virappa v.
Periakaruppan(1). In the present case, the
learned Judge who tried the case believed Kedar not because of his demeanour
but because the learned Judge considered that his story was inherently
probable. That, however, is a matter which the learned appellate Judges were in
as good a position to appreciate as the learned trial Judge. If probability is
to be the test, then the conduct of Tarak suggests that it is very improbable
that he could have agreed.
That leaves at large the nature of the relief
to which the plaintiff is entitled. In the view I take, there being no contract
to the contrary, the plaintiff's only remedy is under section 92 of the
Transfer of Property Act read with section 82. The question is, has his suit
been so framed ? The plaintiff has claimed separate personal reliefs against
the defendants. As there is no personal covenant as between the mortgagors or
any "contract to the contrary", that relief' cannot be granted.
The plaintiff has also asked for a
declaration of charge and for a decree under Order XXXIV, Civil Procedure Code.
The declaration of charge standing by itself
is superfluous although Order XXXIV, rule 2 (1) does require that the decree in
a mortgage suit shall (1) A.I.R. 1945 P.C. 35 at 37.
192 "declare the amount so due" at
the date of the decree. But reading the two reliefs together, I am of opinion
that though the claim is inartistically worded the plaintiff has in substance
asked for a mortgage decree up to a limit of Rs. 40,253-11-10 with interest
against each defendant. No other kind of decree could be given under Order
Therefore, though he has not used the word
"subrogation" he has asked in substance for the relief to which a
subrogee would be entitled under the Transfer of Property Act.
I would be slow to throw out a claim on a
mere technicality of pleading when the substance of the thing is there and no
prejudice is caused to the other side, however clumsily or inartistically the
plaint may be worded. In any event, it is always open to a court to give a
plaintiff such general or other relief as it deems just to the same extent as
if it had been asked for, provided that occasions no prejudice to the other
side beyond what can be compensated for in costs.
In the circumstances, in the absence of
agreement between the parties as to the figures, I would remand this case to
the High Court for (1) an enquiry regarding the sum paid by the plaintiff's
father for satisfaction of the mortgage dated the 12th June, 1936, (2) for the
interest due on that sum at the contract rate in the mortgage from the date of
payment to the date of decree, (a) lot the values of the various properties
mortgaged at the date of the mortgage.
When the figures are ascertained, I would
direct that the liability of each defendant be ascertained separately in the manner
prescribed by section 82, Transfer of Property Act.
In. the event of this liability exceeding Rs.
40,253-11-10 with interest against either defendant, I would direct that his
liability be reduced to Rs. 40,253-11-10 plus interest.
When these figures are ascertained, I would
direct that a mortgage decree for sale be drawn up in the usual way affording
either defendant the right to redeem the whole of the balance of the property
193 (excluding the plaintiff's) for the aggregate sum due as above and, in
default of payment, limiting the liabilities of each item of property to the
sum rateably due on it under section 82.
On the question of costs. The plaintiff
repudiated section 82 in the course of the arguments before us and rested his
case on section 43 of the Contract Act, nor did he clearly and unmistakably
plead a case of subrogation in his plaint even in the alternative. The
defendants, on the other hand, set up a case which has failed on the facts. I
would, therefore, direct each side to bear its own costs in this appeal.
As regards the costs incurred in the Courts
below and any costs which may be necessitated by a further enquiry, they will
be determined according to the final result of the litigation and with due
regard to all matters bearing on the question of costs.
FAZL ALI J.--I agree.
Agent for the appellant: M.S.K. Sastri.
Agent for the respondent: Ganpat Rai.