Gyarsi Rai & Ors Vs. Dhansukh Lal
& Ors [1964] INSC 265 (18 November 1964)
18/11/1964 AYYANGAR, N. RAJAGOPALA AYYANGAR,
N. RAJAGOPALA SUBBARAO, K.
DAYAL, RAGHUBAR
CITATION: 1964 AIR 1055 1965 SCR (1) 154
ACT:
Mortgage-Suit for enforcement of Mortgage with
possessionPreliminary decree declaring amount due under mortgage without asking
mortgagee to account for profits-Mortgagee's liability to account for Period
before preliminary decree, and after decree-Code of Civil Procedure (Act 5 of
1908, 0.
34, rr. 4 & 2-Transfer of Property Act,
s. 76(h)-Estoppel Conditions to be satisfied.
HEADNOTE:
A mortgagee in possession of the mortgaged
property filed a suit for enforcement Of the mortgage. As provided in 0-34, rr.
4 and 2 the trial court framed a preliminary decree in Form No. 5A of the
Appendix D to the First Schedule of the Code of Civil Procedure declaring the
amount ,due under the mortgage. This was done without debiting the profits of
the property realised by the mortgagee in the manner contemplated by s. 76
Transfer of Property Act. After the decree was passed the mortgagors prayed
that the mortgagee be asked to render accounts. Their application was rejected
by the Trial Court, but the High Court in revision remanded the case and
directed the trial court to declare the amount due under the mortgage after
taking accounts from the mortgagee. The mortgagee's legal representatives (the
present appellants) appealed to the Supreme Court by special leave.
The appellants contended that since the
preliminary decree had finally determined the rights of the parties no claim
for subsequent accounting could arise. The respondents (mortgagors) on the
other hand contended that the appellants had withdrawn the amount deposited in
court in part satisfaction of the decree after having given an assurance that
they would render accounts of the profits, and therefore the appellants were
stopped from denying their liability to account.
HELD : (i) In a suit on a mortgage for sale
the court may either order an account to be taken of what is due to the
plaintiff at the date of the preliminary decree, or it may declare the amount
so due on that date. In the latter case the decree will be made in Form No. 5A
in Appendix D to the First Schedule. In a case where a decree is made in !Form
No. 5A it is the duty of the Court to ascertain the amount due to the mortgagee
at the date of the preliminary decree.
The amount due cannot be declared unless the
net profits realised by the mortgagee from the property are ascertained.
'Me ascertainment of the net profits is
therefore a matter directly and substantially in issue up to the date of the
preliminary decree. If the requisite plea is not raised and the court does not
in framing the preliminary decree take into account the net profits a
subsequent plea for rendition of accounts by mortgagee would be barred on the
principle of res judicata. A preliminary decree is final in respect of disputes
that should have been raised before it was made.
[159 D-160 D] In the present case therefore
the mortgagor could not claim rendition of accounts for the period prior to the
preliminary decree. [160 D] 155 (ii) The same however cannot be said of the net
receipts realized by the mortgagee subsequent to the preliminary decree as no
dispute about them could have been raised before it was made. As a suit
notwithstanding the preliminary decree continue till the passing of the final
decree and therefore any payment made by the judgment-debtor to the
decree-holder would go in deduction of his mortgagee liability. On the same
analogy the net receipts statutorily debited to the mortgagee would equally be
taken into consideration in fixing the mortgagor's ultimate liability.
[160 E-162 B; 162 H] Case law discussed.
(iii) There can be no estoppel unless the person
to whom a representation is made acts on that representation to his detriment.
By depositing the decretal amount the respondents had only discharged their
legal liability under the decree and this cannot in any sense of the term be
described as detrimental to them. [166 D-G]
CIVIL, APPELLATE JURISDICTION : Civil Appeal
No. 257 of 1963.
Appeal by special leave from the judgment and
order dated April 5th 1961 of the Rajasthan High Court in S. B. Civil Revision
No. 181 of 1956.
B. D. Sharma, for the appellants.
A. V. Viswanatha Sastri, Rameshwar Nath, S.
N. Andley and P. L. Vohra, for the respondents.
The Judgment of the Court was delivered by
Subba Rao J. This appeal by special leave is directed against the judgment of a
Division Bench of the Rajasthan High Court in S. B. Civil Revision No. 181 of
1956.
The plaint-schedule properties originally
belonged to one Noor Mohammad, his wife and son. On September 14, 1936, they
mortgaged the said properties with possession to B.F. Marfatia, for a sum of Rs.
25,000. On February 22, 1938, the said mortgagors executed a simple mortgage in
respect of the same properties to one Novat Mal for Rs. 5,000. On December 21,
1942, Radha Kishan, Har Prasad and Pokhi Rain acquired the equity of redemption
in the said properties in an auction sale held in execution of a money decree
against the mortgagors. On February 14, 1950, and March 13, 1950, Seth Girdhari
Lal, the husband of Appellant No. 1 herein, purchased the mortgagee rights of
Novat Mal and Marfatia respectively. On May 1, 1950, Girdhari La] was put in
possession of the mortgaged properties. On July 22, 1950, Respondents 9 to 11
purchased the equity of redemption of the mortgaged properties from Radha
Kishan. Har Prasad and Pokhi Ram. On August 10, 1950, Girdhari Lal instituted
Civil 156 suit No. 739 of 1950 in the Court of the Senior Subordinate Judge,
Ajmer, for enforcing the said two mortgages. In the suit he claimed Rs.
48,919-12-6 as the amount due to him under the said two mortgages. On April 25,
1953, the Senior Subordinate Judge, Ajmer, gave a preliminary decree in the
suit for the recovery of a sum of Rs. 34,003-1-6 with proportionate costs and
future interest; he disallowed interest from September 14, 1936, to March 13,
1950, on the mortgage of Rs. 25,000. The plaintiff-mortgagee preferred an
appeal, being Civil Appeal No. 71 of 1953, to the judicial Commissioner, Ajmer,
against the said decree in so far as it disallowed interest to him. The
defendants preferred cross-objections in respect of that part of the decree
awarding costs against them. On July 25, 1953, the defendants filed an
application under O.XXXIV, r. 5(1), of the Code of Civil Procedure, seeking
permission to deposit the decretal amount in court and praying that possession
of the properties may be directed to be delivered to them and also for
directing the decree-holder to render accounts of the profits of the mortgaged
properties received by him. On July 29, 1953, the respondents deposited Rs.
35,155-2-6 in the Trial Court. On August 17, 1953, the decree-holder filed
objections to the said deposit on the ground that it was much less than the
decretal amount. On August 27, 1953, the Trial Court made an order permitting
the decree-holder to withdraw the said amount with the reservation that the question
as to what was due under the decree would be decided On August 25, 1954, both
the appeal of the decreeholder and the cross-objections of the defendants were
dismissed. On Docember 7, 1954, the defendants filed an application in the
Trial Court for the determnation of the amount due under the decree and for
directing the decreeholder to render accounts of all the realizations from the
mortgaged properties. On March 14, 1955, the Supreme Court granted special
leave to the decree-holder for preferring an appeal against the judgment of the
Judicial Commissioner dismissing Civil Appeal No. 71 of 1953. On February 15,
1956, the Trial Court dismissed the application filed by the defendants for
directions on the ground that the mortgage deed had merged in the preliminary
decree and that the said decree contained no directions to the plaintiff to
render accounts. On February 29, 1956, the defendants applied to the Judicial
Commissioner, Ajmer, under s. 152 of the Code of Civil Procedure for amending
the preliminary decree by including therein a direction against the plaintiff
for rendition of account in respect of the profits received by him from the
mortgaged properties. On April 12, 1956, the Judicial Commissioner dismissed
the said application.
157 On April 25, 1956, the defendants filed a
revision petition against the order of the Trial Court dated February 15, 1956,
in the Court of the Judicial Commissioner, Ajmer. As by that time the Supreme
Court had given special leave to appeal against the decree of he Appellate
Court confirming the preliminary decree, the Judicial Commissioner, on August
1, 1956, made an order adjourning the hearing of the revision petition till
after the decision of the Supreme Court in Civil Appeal No. 383 of 1956. On
February 17, 1957, the decree-holder died, and his legal representatives, who
are the appellants herein, were brought on record. On December 16, 1960, this
Court delivered judgment in the said appeal modifying the preliminary decree
made in the suit and directing the Trial Court to pass a fresh final decree. On
April 5, 1961, the High Court accepted the revision petition filed by the
defendants, remanded the case to the Trial Court and directed it to take an
account of the receipts from the mortgaged properties and expenses properly
incurred for the management etc. of the said properties as contemplated under
s. 76(g) and (h) of the Transfer of Property Act and to determine what sum
remained to be paid to the mortgagees taking into account the decision of this
Court. Hence the present appeal.
The gist of the arguments of Mr. B. D.
Sharma, learned counsel for the appellants may be stated thus : (i) A
preliminary decree settles the rights of parties by deciding all the
controversies between them relating to a mortgage transaction and gives all
necessary directions for carrying into effect those rights, while a final
decree concerns itself with the working out of those rights; further, the
mortgage merges into the preliminary decree and thereafter no relief can be given
on the terms of the mortgage; on the basis of the said two principles it must
be held that, as the preliminary decree in the present case did not give, a
direction to the mortgagee for rendition of an account of the profits of the
mortgaged properties, the Court has no jurisdiction to direct such a rendition
of accounts on an application filed by the mortgagors after the preliminary
decree was made. (2) The High Court went wrong in holding that the appellants
were estopped from raising the plea that the mortgagee was not liable to render
accounts for the period between the date of the filing of the plaint and that
of the preliminary decree. And (3) the High Court should have taken into
consideration the equities in favour of the mortgagee.
The arguments of Mr. A. Viswanatha Sastri,
learned counsel for the respondents, may be summarized thus : The relationship
of mortgagor and mortgagee continues upto the date of the final 158 decree. The
statutory liability of a mortgagee to account for the profits received by him
and credit the same towards the mortgage. debt also subsists till that date
and, therefore, the fact that the amounts realized by the mortgagee were not
given credit to in ascertaining the amount due to him under the mortgage at the
time of the making of the preliminary decree would not relieve the mortgagee of
his liability to account for the same. It is further contended that though the
rents realized could have been taken into account at the time the preliminary
decree was made, the mortgagee was not bound to appropriate the amount towards
the debt before the preliminary decree, for he could do so after the decree
though the amounts were realized before the decree. In any view, it is
contended, as the mortgagee did not deny his liability to account for the
profits realized by him from the mortgaged properties before the preliminary
decree was made, he could not evade his statutory liability to account for the
profits realized and to appropriate the same towards the mortgage debt till the
relationship of mortgagor and mortgagee came to an end.
The main question in the appeal is whether
the preliminary decree passed in the suit debars the mortgagors from claiming
that the mortgagee has to account for the profits realized by him from the
mortgaged properties in his possession; if he is not so debarred, what is the
period for which the mortgagee could be compelled to render accounts in respect
of the said profits ? The suit was filed on August 10, 1950; the preliminary
decree was made under 0. XXXIV, r.
4, of the Code of Civil Procedure on April
25, 1953. The preliminary decree does not contain any direction directing the
mortgagee to account for the profits realized from the mortgaged properties in
his possession. The contention briefly stated is that, as there is no direction
in the preliminary decree, the mortgagee escapes his statutory liability to
render accounts under S. 76 of the Transfer of Property Act. To appreciate this
contention the relevant provisions of the Code of Civil Procedure and those of
the Transfer of Property Act may be considered. Under 0. XXXIV, r. 4, of the
Code of Civil Procedure, in a suit for sale, if the plaintiff succeeds, the
Court shall pass a preliminary decree to the effect mentioned in cls. (a), (b)
and (c) (i) of sub-r. (1) of r. 2; under r. 2, in a suit for foreclosure, if
the plaintiff succeeds, the Court shall pass a preliminary decree ordering that
an account be taken of what is due to the plaintiff at the date of such decree
for (i) principal and interest on the mortgage. Form No. 5 of Appendix D to the
First Schedule to the Code prescribed the form for directing the accounts to be
taken and Form No. 5A thereof 159 provides for a decree which by itself
declares the amount due to the plaintiff on the mortgage. Section 76(h) of the
Transfer of Property Act says :
"When, during the continuance of the
mortgage, the mortgagee takes possession of the mortgaged property, his
receipts from the mortgaged property, or, where such property is personally
occupied by him, a fair occupation rent in respect thereof, shall, after
deducting the expenses properly incurred for the management of the property and
the collection of rents and profits and the other expenses mentioned in clauses
(c) and (d), and interest thereon, be debited against him in reduction of the
amount, if any, from time to time due to him on account of interest and, so far
as such receipts exceed any interest due, in reduction or discharge of the
mortgage money; the surplus, if any, shall be paid to the mortgagor.".
The gist of the said provisions may be stated
thus : In a suit on a mortgage for sale the Court may order an account to be
taken of what is due to the plaintiff at the date of the preliminary decree and
in that case the decree will be made in Form No. 5 in Appendix D to the First
Schedule to the Code; or it may declare the amount so due on that date, in
which case a decree will be made in Form No. 5A in the said Appendix. In a case
where a decree is made in Form No. 5A, it is the duty of the Court to ascertain
the amount due to the mortgagee at the date of the preliminary decree. How can
the amount due to the mortgagee as on the date of preliminary decree be
declared unless the net profits realized by him from the mortgaged property are
debited against him ? The statutory liability of the mortgagee to account upto
the date of the preliminary decree would be the subject-matter of dispute in
the suit upto the date of the said decree. The Court has to ascertain the
amount due under the mortgage in terms of the mortgage deed and deduct the net
realizations in the manner prescribed in s. 76(h) of the Transfer of Property
Act and ascertain the balance due to the mortgagee on the date of the
preliminary decree. If the mortgagee did not raise the plea, he would be barred
on the principle of res judicata from raising the same as the said matter
should be deemed to have been a matter which was directly and substantially in
issue in the suit up to that stage. It is settled law that though a mortgage
suit would be pending till a final decree was made, the, matters decided or
ought to have been 160 decided by the preliminary decree were final. Suppose
the mortgagor paid certain amounts to the mortgagee before the preliminary
decree; if these were not given credit to the mortgagor and a larger amount was
declared by the preliminary decree as due to the mortgagee, can the mortgagor,
after preliminary decree, reopen the question ? Decidedly he cannot. This is
because the preliminary decree had become final in respect of the disputes that
should have been raised before the preliminary decree was made. So too, under
S. 76(h) of the Transfer of Property Act, the net receipts of the mortgaged
property have to be statutorily ,debited against the mortgagee in deduction of
the amount due under the mortgage from time to time in the manner prescribed
thereunder. The principle underlying the said clause is that the usufruct of
the mortgaged property represents the mortgagors money. On the same analogy of
voluntary payment, if a preliminary decree, by a wrong decision or by reason of
an omission of the requisite plea, ignored the net realization in ascertaining
the amount due to the mortgagee, it must be held that the Court refused to give
credit to the said receipts. We therefore, hold that in the present case so far
as the amounts statutorily debited to the mortgagee under s. 76(h) of the
Transfer of Property Act before the date of the preliminary decree are
concerned, they could not be taken into account as the Court did not take those
amounts into consideration at the time it made the said decree.
But the same cannot be said of the net
receipts realized by mortgagee subsequent to the preliminary decree. None of
the principles relied upon by the learned counsel for the appellants helps him
in this regard. It is true that a preliminary decree is final in respect of the
matters to be decided before it is made : see Venkata Reddy v. Pethi Reddy(1),
and s. 97 of the Code of Civil Procedure. It is indisputable that in a mortgage
suit there will be two decrees, namely, preliminary decree and final decree,
and that ordinarily the preliminary decree settles the rights of the parties
and the final decree works out those rights :
see Talebali v. Abdul Azia(2), and Kausalya
v. Kauleshwar(3). It cannot also be disputed that mortgage merges in the
preliminary decree and the rights of parties are thereafter governed by the
said decree : see Kusum Kumari v. Debi Prosad Dhandhania (4) . But we do not
see any relevancy of the said principles to the problem that arises in this
case in regard to the liability of the mortgagee to account for the net
receipts under s. 76(h) of the Transfer of Property Act. A preliminary decree
is only concerned with dis(1) [1963] Supp. 2. S C. R. 616. (2) [1930] 1. L. R.
57 Cal. 1013.
(3) [1945] I. L. R. 25 Pat. 305. (4) [1935]
L. R. 63 I. A.
114.
161 putes germane to the suit upto the date
of the passing of the said decree. The net receipts of the mortgaged property
by the mortgagee subsequent to the preliminary decree are outside the scope of
the preliminary decree : they are analogous to amounts paid to a mortgagee by a
mortgagor subsequent to the preliminary decree.
Realizing this difficulty, Mr. Sharma
contended that it must be held that the question of statutory liability of the
mortgagee to account for the receipts must be deemed to have been decided in
favour of the mortgagee by the preliminary decree. It is true that the
mortgagee may, if he chose, have raised this untenable contention that for some
reason he was not under a statutory liability to account for receipts under s.
76 of the Transfer of Property Act; and if the Court wrongly decided in his
favour, the finding might have been binding on the mortgagor in respect of the
mortgagee's liability to account for receipts even for the subsequent period
subsequent to the preliminary decree was neither expressly He had conceded his
general statutory liability, but, by some mistake, it was not quantified upto
the date of the preliminary decree and deducted from the mortgage amount. His
liability for the period subsequent to the preliminary decree was neither
expressly nor impliedly negatived by the preliminary decree. In this context,
the decision of the Judicial Committee in Madan Theatres, Ltd.
v. Dinshaw & Co. Ltd.(1) may usefully be
cited. There, the question arose whether after the preliminary decree there
could be an adjustment of the suit within the meaning of O.XXIII, r. 3, of the
Code of Civil Procedure. The Judicial Committee observed :
"A decree holder need not, of course,
agree to any adjustment or accept payment otherwise than into court, but in
their Lordships' opinion it is open to the debtor to allege and prove that an
adjustment has taken place or payment in whole or in part has been made and received.......
Admittedly the suit continues until the final decree is passed, and there is no
time limit for recording the agreement arrived at as there is under Or. 21, r.
2As a suit, notwithstanding the preliminary decree, continued till the passing
of the final decree any payment made by the judgment debtor to the
decree-holder after the preliminary decree would go in deduction of his
mortgage liability. On the same analogy, the net receipts statutorily debited
to the mortgagee would equally be (1)(1945) L. R. 72 I. A. 277,286.
162 taken into consideration in fixing the
mortgagor's ultimate liability. This question was considered by Clark, J., in
Satyanarayana v. Suryanarayana(1). There, the appellant mortgaged certain
property to the respondent's father, who went into possession of the same. In
the usual course a preliminary decree was made in favour of the mortgagee.
After the preliminary decree the mortgagor
filed an application for an account to be taken of the profits received by the
mortgagee after the date of the preliminary decree and before the passing of
the final decree. It was contended that in the absence of any provision in the
preliminary decree for taking of any account, no such account could be ordered.
Rejecting that contention, the learned Judge observed :
"That he (the mortgagor) is so entitled
is well-settled law. A mortgage suit continues until the final decree is passed
and the relationship of a mortgagor and mortgagee continues until then.
Accordingly a mortgagee in possession has until the expiry of that period the
liabilities imposed on him by S.
76, T.P. Act. It is true that 0. 34, r. 8
does not in terms provide that a mortgagor in a suit for redemption applying
for a final decree is entitled to have an account taken of the profits received
by the mortgagee in possession between the date of the preliminary decree and
the date when possession is given;
but the provisions of 0. 34 read as a whole
clearly indicate that such an account must necessarily be taken. Even if they
did not, the right of the mortgagor to such an account is established beyond
question by the provisions of S. 76, T.P. Act. Again it is beyond question that
when a suit whether for sale or redemption of a mortgage is filed it is the
duty of the Court to decide in that suit all the claims of the mortgagor and
mortgagee under the mortgage up to the date when the final decree is given.
Such claims can and indeed must be included in the mortgage suit. If they are
not included the person failing to include them is barred thereafter under the
provisions of 0.2, R. 2, Civil P.C. from filing a suit in respect of
them." The learned Judge cited a number of decisions in support of his
conclusion. These observations appear to be rather wide and comprehensive
enough to take in the liability of a mortgagee to account for the net receipts
from the mortgaged property even for the period before the preliminary decree.
But the facts of (1) A. 1. R. 1949 Mad. 613,
614.
163 that case show that the learned Judge was
only considering the question of the mortgagee's liability for a period after
the preliminary decree was made, even though the preliminary decree did not
contain a direction that the mortgagee had to account for the said receipts. We
agree with these observations with the limitation mentioned above. We,
therefore, hold that as regards the net receipts from the mortgaged properties
subsequent to the making of the preliminary decree the Court was right in
giving credit for them to the mortgagor in fixing his liability.
Mr. Viswanatha Sastri next argued that the
mortgagee is debarred by the doctrine of estoppel from denying his liability to
account for the net receipts from the mortgaged properties for the period
between the date of the plaint and the date of the preliminary decree. The plea
of estoppel is based upon the following facts : On July 25, 1953, the
respondents filed an application in the Court of the Senior Subordinate Judge,
Ajmer, wherein they mentioned that under the preliminary decree the amount due
was Rs. 958-4-0, that the amount realized by the appellants as rent from the
tenants up to the date of the said application was Rs. 4,250, that the costs
awarded by the Court against them against which they were going up in appeal
was Rs. 2,553-1-6 and the balance payable to the appellants after deducting the
said amounts was Rs. 35,155-2-6. 'Me prayer in the petition was that the
appellants be directed to deliver possession of the said properties to them and
also be called upon to render true and correct account of the recoveries made
by the mortgagee as rent from the date of suit to the date of his handing over
possession of the said properties.
To that petition the mortgagee filed a
counter-affidavit wherein he admitted that he had realized only Rs. 4,488-2-0
towards rent from August 10, 1950, to July 28, 1953, and that he had incurred
an expenditure of Rs. 1,897 in connection with the management of the said
properties during the said period and that the respondents should have
deposited Rs. 30,515-10-0 in the Court according to the "present"
decree. The sum of Rs. 39,515-10-0 was arrived at by adding the net receipts of
rents from August 10, 1950, to July 28, 1953, to the amount sought to be
deposited by the respondents in Court. It is, therefore, clear that the mortgagee
admitted that he had to account to the respondents for the receipts of the
mortgaged properties. After depositing Rs. 35,515-2-6, the respondents filed on
December 7, 1954, an application in the Court of the Subordinate Judge stating
that they were prepared to deposit all the remaining amounts which would on
settlement of accounts, be found duly payable to the 164 mortgagee. They also
prayed that the mortgagee be directed to produce the accounts of all the rents
and profits which he had realized so that the Court, after checking the
aforesaid accounts, might decide what amount was exactly due to the mortgagee.
To that application the mortgagee filed a counter-affidavit, wherein 'he stated
thus :
"That the plaintiff has no objection to
give an account as to the amount of rent realised by him and the expenses
incurred by him in the management and preservation of the mortgaged property
but he maintains that he has a right to remain in possession of the property
and enjoy its usufruct till the last penny due on the mortgage in his favour is
paid up to him.
The plaintiff is therefore entitled to remain
in possession of the property till the amount of Rs. 14,916-11-0 on account of
interest wrongly disallowed by the learned Court is also paid to him alongwith
the other dues or till they said interest is finally disallowed by Honourable
the Supreme Court of India in appeal." It will be seen again that the
mortgagee in clear terms admitted 'his liability to account for the net
receipts from the mortgaged properties; but he claimed that he would be
entitled to be in possession till the interest amount due was also paid to him.
On August 27, 1953, the Senior Subordinate Judge ordered that the amount
deposited by the mortgagors less the amount attached by the Income-tax Officer
may be paid to the mortgagee. As by that time the appeal and the
cross-objections filed by the mortgagee and the respondents respectively were
not disposed of, the, learned Subordinate Judge left open the question as to
the amount that would actually be due to the mortgagee till after they were
disposed of. It appears that the said amounts were drawn out by the mortgagee.
From the aforesaid documents it is clear that the respondents deposited Rs.
35,515-2-6 in the Court after taking the net
proceeds alleged to have been realized by the mortgagee from the mortgaged
properties and prayed that the mortgagee should be directed to render true and
correct accounts from the date of the suit to the date of his handing over
possession of the said properties to the respondents. The mortgagee admitted
his liability to account for the receipts and only claimed that he was entitled
to be in possession of the properties till the interest disallowed by the Court
was paid to him. From the said facts it is argued that the respondents would
not have permitted the mortgagee to draw out the amount if he had not admitted
his liability 165 to account for the net receipts from the mortgaged properties
and that the mortgagee having drawn that amount subject to the liability, he is
now estopped from denying his liability. Under s. 115 of the Evidence Act when
one person by his declaration, act or omission intentionally caused another
person to believe a thing to be true and to act upon such belief, he cannot
deny the truth of the thing.
The doctrine of estoppel embodied in s. 115
of the Evidence Act has been explained by the Judicial Committee in C. D. Sugar
Co. v. C. N. Steamship(1) in the following terms "estoppel is a complex
legal notion, involving a combination of several essential elements, the
statement to be acted upon, action on the faith of it, resuling detriment to
the actor." To invoke the doctrine of estoppel three conditions must be
satisfied : (1) representation by a person to another, (2) the other shall have
acted upon the said representation, and (3) such action shall have been
detrimental to the interests of the person to whom the representation has been
made. In the instant case it may be said that the first two conditions are
satisfied : the appellant represented to the respondents that he was liable to
render accounts to them in regard to the net proceeds of the mortgaged
properties from the date of the plaint to the date of the preliminary decree,
and on the said representation the respondents agreed to the appellant drawing
out from the Court about Rs.
35,515 deposited by them. But can it be said
that the respondents had in any way acted to their detriment on the basis of
the representation made by the appellant ? The respondents had to pay the decretal
amount to the appellant if they wanted to get possession of the properties.
What they paid was less than what they had to pay under the decree. By paying
the said amount they did nothing more than discharging their liability under
the decree. The discharge by the respondents of their legal liability under the
decree cannot in any sense of the term be described as detrimental to them.
Whether the representation was made or not they had to pay that amount and by
paying that amount they had secured a benefit in as much as from the date of
payment the interest on that amount ceased to run. There is no scope,
therefore, in this case to invoke the doctrine of estoppel. We, therefore, hold
that the order of the Rajasthan High Court was correct, except in regard to the
direction given by it to the Subordinate Judge to take into account ,ill the
receipts of the mortgaged properties from August 10, 1950, (1) A. 1. R. 1947 P.
C 40.
166 to July 25, 1953. The order of the, High
Court is accordingly modified. The parties will pay and receive proportionate
costs here and in the High Court.
Order modified.
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