Thakur Singh Vs. Ram Baran Singh &
Ors  INSC 191 (25 August 1972)
CITATION: 1973 AIR 45 1973 SCR (1)1016 1972
SCC (2) 740
Transfer of Property Act (4 of 1882), ss. 76,
77 and 83- Mortgage providing for payment of government revenue and Cess by
mortgagor-Mortgagee in possession paying the same- Deposit of mortgage money by
mortgagor-If should include payment by mortgagee-Mortgagee's liability to
The appellant-mortgagor tendered to the
mortgagees the mortgage money due on their mortgages and, on the refusal of the
mortgagees to accept the amount, deposited the mortgage money into court. The
appellant thereafter filed suits for redemption and mesne profits.. The terms
of the mortgage deeds indicated that, (i) the mortgagee shall have the
possession and occupation of the mortgaged property and the right to
appropriate the produce thereof in lieu of interest on the mortgage money and
that the mortgagor shall have no claim to any excess produce or mesne profits;
(ii) the mortgagee was to pay to the mortgagor the amount mentioned in each
mortgage bond as annual reserve rent; and (iii) the mortgagor was liable for
the payment of government revenue or cess. The mortgagees, however, paid the
revenue and cess on behalf of the mortgagor. The total amount of revenue and
cess paid by the mortgagees each year exceeded the amount due to the mortgagor
as reserve rent. The trial court, and the High Court in appeal, held that the
amounts representing the government revenue and cess should have been added to
the mortgage money and deposited in court, and, since it was not done, there
was no valid deposit in court of the money due on the mortgages, and hence, the
appellant was not entitled to mesne profits.
Dismissing the appeal to this Court,
HELD : (1) Under the provisions of the Cess
Act, 1880, cess is a public demand and linked with rent. Under the terms of the
mortgage deed the appellant was liable for the payment of both revenue and
cess. Since the mortgagees paid the government revenue or cess on behalf of the
appellant and the amount so paid exceeded the amount payable by the mortgagees
as reserve rent, the mortgagees were entitled to the excess payment from the
appellant and add it to the mortgage money due.
[1020E-F-H] (2) There was nothing to account
on the part of the mortgagees, because, (a) the mortgagees had to pay to the
mortgagor a fixed amount as reserve rent; and (b) the mortgages were covered by
s. 77 of the Transfer of Property Act and therefore the provisions as to
accounts in s. 76(g), are excluded. [1020B-D]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1038-1040 of 1967.
Appeals by certificate under Article 133 of
the Constitution of India from the judgment and decree dated August 7, 1962 of
the Patna High Court in Original Decrees Nos. 384/52, 1155 and 2/55.
1017 R. C. Prasad, for the appellant Jagadish
Swarup, K. K. Sinha, S. K. Sinha and B. B. Sinha, for respondents Nos. 1-4 (in
C.A. No. 1038 of 1967), for respondents 1 (a) & 2 (in C.A. No. 1039 of 1967
and for respondents Nos. 1, 2, 4 & 5 (in C.A. No. 1040 of 1967).
The Judgment of the Court was delivered by
Ray, J. These three appeals are by certificate against the judgment dated 7
August, 1962 of the High Court at Patna.
The High Court allowed in part the appeals
filed by the appellant by decreeing in part the suits filed by the appellant
for redemption of mortgages. The High Court dismissed the appellant's prayer
for mesne profits.
The appellant filed three suits for
redemption. Title Suit No. 54 of 1950 filed by the appellant was with respect
to Ijara bond dated 21 April, 1920 in favour of Ram Baran Singh for Rs.
2,300/-. Title Suit No. 55 of 1950 was filed by the appellant with respect to
another ljara bond dated 21 April, 1920 in favour of Inder Singh for Rs.
1293-12-0. The third Title Suit No. 56 of 1950 was filed by the appellant with
respect to the third Ijara bond dated 21 April, 1920 in favour of Raj Kumar
Mahto for Rs. 1,150/-. The bond was subsequently assigned to one Sheo Sharan
Singh whose sons were defendants in that suit. These bonds were executed by
Maik Nizammuddin. These three bonds were mortgage bonds in respect of certain
Milkiyat share in village Keoran Mauzume Makhdumpur in the District of Patna.
The appellant was the purchaser of the
Milkiyat share of Nizammuddin from his heirs by a deed dated 22 May, 1946. The
appellant alleged as follows. There, are baksht lands within the said Milkiyat
share covered by the Ijara bonds. These bakasht lands were the subject matter
of the mortgage. After 'he purchase the appellant endered the ljara money to
the respondents who were ijaradars or mortgagees. The respondents refused to
accept the money. The appellant thereupon deposited the mortgage money. The
appellant served notice of the deposit on the respondents. The respondents did
not withdraw the ijara money. They did not deliver possession of the Milkiyat
share and the bakasht lands to the appellant. The appellant therefore filed
suits for redemption and for possession. The appellant also claimed mesne
The respondents in the written statements
denied that there was any bakasht land. It was also denied that there was any
mortgage of bakasht land. It was alleged that the lands were raiyati lands in
possession of several tenants and therefore those lands could not be redeemed.
The further defence was that the 1018 Ijara
bonds were really sale deeds and therefore the appellant had no right of
redemption in respect of the milkiyat interest. The respondents denied that the
appellant tendered the mortgage money.
The trial Court held that the appellant was
entitled to a decree for redemption but not for mesne profit. The reason given
was that the appellant did not deposit in court under Section 83 of the
Transfer of Property Act the money due on mortgage. The mortgagees had from
time to time paid the Government revenue and cess in respect of the mortgage
property. The Government revenue and cess should have been paid by the
mortgagor. The amounts representing the Government revenue and cess should have
been added up in the mortgage money. The deposits in court did not cover those
The appellant preferred appeals to the High
Court. The High Court upheld the finding of the trial Court that certain lands
were bakasht lands. The High Court set aside the finding of the trial Court as
to other lands which were found by the trial Court not to be bakasht lands. The
High Court upheld the finding and conclusion of the trial Court that there was
no valid deposit in court of money due on mortgage. The appellant was therefore
not entitled to mesne profits. The High Court found that the amount of revenue
and cess was never less than the amount of haq-ajri (meaning thereby 'annual
reserve rent') payable to. the mortgagor. The result was that the amount of
revenue and cess paid by the mortgagees was always higher than the haq-ajri and
therefore there was no case of accounting.
Counsel for the appellant contended that the
appellant was entitled to mesne profits from the dates of deposit of mortgage
money in court under section 83 of the Transfer of Property Act. The amounts
were deposited in court of First Munsif, Patna on 26 May, 1947. Notice under
section 83 of the Transfer of Property Act was served on the respondents on 30
May, 1947 in two cases and on 3 June, 1947 in the third case. The suits were
filed for redemption of mortgage -and mesne profits in the month of June, 1950.
The relevant terms of the ijara bond
(mortgage bond) in favour of Ram Baran Singh were these :
"It is desired that the said Mustajir,
should enter into possession and occupation of the ijara property, himself
cultivate the land, appropriate the produce thereof in lieu of interest on the
peshgi money. I, the executant, or my heirs and representatives, neither have
nor 1019 shall have any claim for excess produce and mesne profits etc. against
the said Mustajir or his heirs and representatives, except to get a sum of Rs.
12/- (rupees *twelve) in king's coins, as annual reserve rent till this deed
remain intact. Expenses over dispute regarding the milkiyat property and
boundary limit and payment of Government revenue and road cess and Public works
cess etc. are entirely the concern of me, the executant.
The said Mustajir neither has nor shall have
any connection and concern therewith".
The terms of the other two ijara deeds were
identical. The only difference was that in the case of the ijara bond in favour
of Inder Singh the annual reserve rent (haq-ajri) was Rs. 6-12-0 and in the
case of Raj Kumar Mahto the annual reserve rent (haq-ajri) was Rs. 6/-.
Broadly stated, these terms indicate three
features. First, the mortgagee shall have possession and occupation of the
mortgaged property and appropriate the produce thereof in lieu of interest on
the mortgage money and the mortgagor had no claim to any excess produce or
mesne profits against the mortgage. Secondly, the mortgagee was to pay to the
mortgagor the amounts mentioned in each ijara bond the annual reserve rent or
haq-ajri. Thirdly, the mortgagor was liable for payment of the Government
revenue or cess.
The High Court found that the mortgagees paid
the revenue and cess out of haq-ajri. In Title Suit No. 54 of 1950 the High
Court held that the total amount of revenue and cess came to Rs. 15-9-3. The
haq-ajri in that suit was Rs. 12/-.
It therefore followed that every year the
mortgagee paid Rs. 3-9-0 in excess of the amount haq-ajri. The mortgagor was
liable to the mortgagee for the excess payment. Similarly, in Title Suit No. 55
of 1950 the mortgagee paid revenue and cess amounting to Rs. 9-13-3. The
haq-ajri under the ijara bond in that suit was Rs. 6-12-0. The result was that
every year the mortgagee paid Rs. 3-1-3 in excess. The mortgagor was liable to
the mortgagee to pay that excess amount.
Again, in Title Suit No. 56 of 1950 the High
Court found that the mortgagee paid every year revenue and cess amounting to
Rs. 7-12-0. The haq-ajri there was Rs. 6/.
The mortgagee therefore paid annually Rs.
1-12-0 in excess of haq-ajiri. The mortgagor was liable to pay the excess
amount to the mortgagee.
In the present appeals, the mortgagor had
undertaken the liability to pay the revenue and cess. The mortgagor failed to
pay the same. The mortgagees paid the revenue and cess on be- 1020 half of the
mortgagor. The mortgagees were entitled to the excess payment of the amount of
revenue and cess, because the mortgagor was liable to pay the same.
The mortgage bonds in the present case
provided that as Ion as the mortgagee was in possession of the property the
receipts from the mortgaged property shall be taken in lieu of interest on the
principal money. That amounts to a stipulation that the receipts from the
mortgaged property will be taken in lieu of the interest on the principal
money. That is section 77 of the Transfer of Property Act.
The provisions as to accounts contained in
section 76(g) of the Transfer of Property Act are excluded in cases where
section 77 of the Transfer of Property Act applies. Section 77 of the Transfer
of Property Act applies to the present appeals. Further, the mortgages had to
pay to the mortgagor a fixed amount, namely, the haq-ajri. There was nothing to
account on the part of the mortgagees in relation to payment of haq-ajri. On
the contrary, the mortgagor was liable for the payment of Government revenue
Under section 76 (c) of the Transfer of
Property Act the mortgagee in possession, in the absence of a contract to the
contrary, must pay the Government revenue and other charges of a public nature
and arrears of rent in default of payment of which the property may be
summarily sold. In the present case, the mortgagor was liable for payment of
both revenue and cess. Therefore, the mortgagees were entitled to add to the
mortgage money the amount for which the mortgagor under the terms of the
mortgage was liable.
Section 4 of the Cess Act, 1880 defines
'annual value of land' to mean the total rent which is payable or, if no rent
is actually payable, would, on a reasonable assessment, be payable, during the
year by all the cultivating raiyats of such land in the actual use and
occupation thereof. Section 5 of the Cess Act, 1880 states that all immovable
property to which the Act applies shall be liable to the payment of a local
cess. Section 6 of the Cess Act, 1880 provides as to how the cess is to be
assessed. Section 38 of the Cess Act, 1880 provides as to how rate of local
cess' on the annual value of land is 'to be fixed. Section 98 of the Cess Act,
1880 enacts that the amount which may become due under the provisions of the I
Cess Act in respect of arrears of cess shall be deemed to be a public demand.
Section 99 provides that the 'Collector may recover dues out of rent and the
Collector's claim to have priority. These provisions show that cess is linked
with rent. Cess is payable on annual value of land. Annual value is linked with
rent. Cess is deemed to be a public demand. The mortgagee were entitled to add
the amounts paid by them towards revenue and cess on the mortgage money.
1021 The High Court was correct in refusing
the mesne profits.
On behalf of the respondents it was mentioned
in their statement of case that the appellant after having deposited the
further amount after the decree of the High Court had taken possession of the
land. This statement was not challenged and denied by the appellant. This indicates
that the appeals have now become academic.
The appeals therefore fail and are dismissed.
The respon- dents will be entitled to one set of costs in this Court.
V.P.S. Appeals dismissed.