KIDAR LALL SEAL AND ANOTHER versus HARI LALL SEAL

BosE J.-This is a defendant's appeal m a suit for contribution brought by the son of a mortgag<?r againsr the co-mortgagors.

p. 180

The parties are related as below :- Balai Lall Seal (died 1917)

p. 180

I . Meghamala Dass•

p. 180

(died 1945)

p. 180

I . I I I I BeJoy Lall B1swa Lall Tarak Lall Kedar Lall Naku Lalf (D.23-5-33) (D. Nov. 1936) Deft I Deft. 2

p. 180

(Born (Born Jugal Lall Han Lall 22-11-1907) 7-2-1910}

p. 180

(Plff.)

p. 180

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, · m 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.

p. 180

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 December, 1939.

p. 180

In executing 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.

p. 180

An order of the Court was obtained sanctiol}ing 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 wa• 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.

p. 180

This was done and 20, Round Tank Line, 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 full satisfaction of the claim ·and costs then outstanding. The Mills executed a reconveyance of the rest of · the properties to the -mortgagors in ;elease of the mortgage on the same day.

p. 181

In addition to this Rs. 97,116-11-0, further sums of Rs. -i4,400 and Rs. 8,100 had ·also been paid before the dates of these transactions. These sums were paid by a· Rei;eiver who had been appointed by the Court penqente lite. These sums came out of the rents which t!J.e Receiver obtained from t~e plaintiff's property, Round Tank Lane. .

p. 181

The plaintiff says that· in this way he paid a total of Rs. 1,19,116-11-0 in satisfaction of the mortgage. His one-third share in this comes to Rs. 39,872-3-8. He claims that he is entitled to receive the balance of R~: 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.J-8 .

p. 181

In addition to _this plaintiff had incurred costs amounting to Rs. 1,144-8-6 in resisting Mst. Gyarsi's clai_m 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.

p. 181

In addition to this the plaintiff as~ed for~

p. 181

(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

p. 181

(2) "Decree under Order XXXIV of the Civil Procedure Code in proper 'form."

p. 181

Schedule A contains a list of the rest of the mortgaged properties which belong exclusively to the defendants,

p. 181

It will be seen that the plaintiff claims on the basis that each of the three mortgagors is liable to contrih · ute in equal s ares towards payment of the mortgage debt.

p. 182

The defendants did not deny their liability to contribute. 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-ll-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.

p. 182, margin B

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 necessat y 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 principles ; so it will be more convenient to reduce the problem to its simplest terms.

p. 182, margin B

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 orginally joint family properties, but in the year 1932 there was a partition which was compelled by reason of a suit filed by Tarak against his brothers and mother. The upshot was that the properties were divided as follows :-

pp. 182–183, margin B

(1) Bejoy, Kedar, Naku and the mother Meghamala obtained Chittaranjan Avenue.

p. 183

(2) Tarak (plaintiff's father) obtained 16 Round Tank Lane and 20 Round Tank Lane.

p. 183

(3)Kedar, Naku and Biswa Lall obtained Strand Road. ,

p. 183

_Before this partition there were three mortgages: The first of these was executed on the 16th of June, 1925. All five brothers jained in it and they ·mortgaged the Strand Road property for Rs. 10,000. This was in favour of Bhuvan Chandra Bhur.

p. 183

The second was on the 11th of October, 1926. In this Bejoy and Tarak mortgaged their 2/5 share· in . Chitta.., ranjan, Strand, Dum Dum and 20 Round Tank Lane for Rs. 5,000. The n;iortgagee was Binod Behari Sen.

p. 183

The third was on the 28th January, 1927. In this Bejoy and Tarak again mortgaged their 2/5 share in the same items of propert.y for R~. 7,000 Binode Behari Sen and Kunja Behari Sen.

p. 183

All three sets of mortgagees, or their representatives, instituted suits on their respective mortgages and obtained final decrees.

p. 183

Bejoy aied on the 23rd of May, 1933, leaving a . son Jugal. · On the 12th of June, 1936, came whatJ have called the suit mortgage executed by the three brothers, Tarak Kedar and Naku, for Rs. 80,000. The properties mortgaged were-

p. 183

( l) the shares of Kedar and Naku in Chittaranjan Avenue and 16 Round Tank Lane;

p. 183

(2) 20 Round Tank Lane which had been allotted to Tarak;

p. 183

(3) the reversionary interest of all three in the share allotted to the mother.

p. 183

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 later decretal charge ; Rs. 11,519-11-0 m 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 Tarak1. 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 oyerall picture.

pp. 183–184

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, Blackacre, 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.

p. 184

A, B and C, acting in various combinations from time to time incur debts. It mailers not for present purposes whether those debts are secured on these propertks or not because a time must come when their separate liabilities as amongst themselves have to be ascertained and apportioned. 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.

p. 184

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 m the - Rs. 10,000.

p. 184

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 ?

p. 184

Three solutions readily suggest themselves. One 1s that the three contribute equally. In that event B would pay A Rs. 5,000 and C would pay Rs. 5,000.

p. 184

A second solution is that they pay in proportion to. ·the ex'ent 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.

p. 185

A third solution is that they pay proportionately to :the values of the properties mortgaged. Iri that event would have to pay 2/6 of Rs. 15,000, that is Rs. 5,000, and C 1/() of Rs. 15,000 which come to .Rs. 2,500 .

p. 185, margin A

. The problem is to know which of these three solutions to apply. In the absence of other considerations, the inost equitable solution is obviously the second. But the matter is not as simple as that.· There are i::er~ · tain statufory provisions which must first be examined.

p. 185, margin B

The learned counsel f0r the. plaintiff-respondent contended that section 43 of the Contract Act applied. He relied on the following provision :-

p. 185, margin B

"Each of two or more joint promisors may compel .every otlrer· joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract.

p. 185, margin B

If any one of two 'Or more joilit pfoinisors makes .default in such contribution, the 'remaining joinf pro. misors must bear the loss arising from such default in equal shares." •

p. 185, margin B

The argument is that Unless i contrary intention .appears from "the contract" the loss hiilst be oorne equally. It was cohfehded, imi:l with that I agree, that the words "tlie contract'' can only refer to the main C!'.>fltiatt between the prdfnis(>fs on the one side and the promisee on the otller. That contract in this ca8e is the suit mortgage. There is no contract to the con-

p. 185, margin B

trary in the document, therefore, it was contended, · the· section intist apply. That of course would be the dear, logical · and simple conclusion if there were no . -Other provision of law to consider. But we ate · dealing here with !1 mortgage . and so we . have also i:o look to the provisions of the Transfer of Property Act.

p. 185, margin B

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.

p. 186

The sections of the Transfer of Property Act which concern us are !J2 and 92. The first confers a right of contribution. The seco!J.d a right of subrogation. I will consider section 82 first. It runs :-

p. 186

"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 .......... "

p. 186

That is the position here. Next I turn to section 92. That runs-

p. 186

" ...... 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 ...... "

p. 186

That also applies.

p. 186

Now these provisions at once raise a competition between sections 82 and 92 of the Transfer of Property AcJ:., section 43 of the Contract Act and what I might term the principle 9f beneficial, as opposed to proportionate or equal, distribution of liability.

p. 186

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.

p. 186

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. 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 Jgdge of the Federa~ Court) ruled out 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. fai Singh(2) and so did· Stone C.J. and I in the Nagpur High Court in Taibai v. Wasudeorao (3). In the case of section 82 the Privy Council held in Ganes.h Lal v. Charan SinghC) 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 prin,.:iple the decision must rest solely on whatever section is held to apply.

pp. 186–187

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 ~ontracts 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 .'.fransfer of Property Act read with the Civil Procedure Code. I am clear we cannot travel beyond these statutory provisions.

p. 187

Now, when parties enter into a mortgage they know, or must be takien to know, that the law of mortgage provides for this very question of contribution. It confers rights on the mortgagor who redeems and directs th~t, 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.~

p. 187

(2) A.LR. 1937 All. 588 at 594. ( 4) (1930) 57 I.A. 189. 6-3 s.c.

p. 187

shall be reimbursed in a particular way out of particular properties. The parties are at the 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.

p. 188

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 cousider 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.

p. 188

The rule is there and full effect must be given to it.

p. 188

The learned counsel for the plaintiff-respondent urged that the defendants are sh1,1t 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.

p. 188

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 though the parties contemplated writing and registration. · His explanation for lack of any writing is· this. He was asked whether any thing was put down in writing and he replied :-

pp. 188–189

"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 .

p. 189

document which would have to be registered m -connection with the adjustment ?"

p. 189

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 Nak\1.1, who is the second defendant, has not entered the box.

p. 189

Stopping there, it is evident that we have to rely on the memory · of a very interested person speakin-g nearly thirteen ye<irs . 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 con~ -siderations of much nicety even when the preliminaries .a.re 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 Hemchand Shah(1). How much greater are the difficulties when we do JlOt know the exact words the parties used and have to delve into the mind of a dead man (T arak) through the impressions of an interested witness given some . thirteen years after the event.

p. 189

I find it difficult to accept this· version and consider' it would be dangerous to do so, particularly when the (I) I:L.R. 1949 Nag. 381 ·at 586-588, and ar 598.

p. 189

witness is a hesitant and reluctant one, as his exairunation 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.

p. 190

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 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 registration. 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 brothers.

p. 190

Now we know that Tarak was in Calcutta about three months :tfter 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 make 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 part. It may be he wanted his lawyers to examine his position or it may be he refused to have anything to do with it. It is just possible that there were negotiations, but on those broad facts I am not prepared to believe the witness · wheri he tells us, or rather suggests, that the parties reached finality. It would in any event be oangerous ' 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 -0nly conclude that their case was loo shaky to stand fillther proving. On these broad grounds alone I would hold that the agreement is not proved.

pp. 190–191

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 th~ rule but it can be pushed too far as their Lordships of the Judicial Committee pointed ou~ 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 prob- -able. 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 hav_e agreed.

p. 191

That leaves at large the nature of the relief fo which the p\laintiff 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 ?

p. 191

The plaintiff has claimed separate personal reliefs against the defendants. As there is no personal_ convenant as between the mortgagors or any "contract to the contrary'', that relief cannot be granted ..

p. 191

_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 37.

p. 191

"declare the amount so due" at the date of the decree. But reading th, two reliefs together, I am of opinion that though- the claim is inartistically worded the plaintiff has in substance askea 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 XXXIV. Therefore, though he has not used the word "subrogation" he has askied in substance for the relief to which a subrogee would be entitled under the Transfer of Property Act.

p. 192

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.

p. 192

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, (3) for the values of the various properties mortgaged at the date ef the mortgage.

p. 192

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.

p. 192

In the event of this liability exceeding Rs. would direct that his liability be reduced to Rs. 40,253-11-10 plus interest.

p. 192

\Vhen 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 40,253-11-10 with interest against either defendant, l (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.

pp. 192–193

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.

p. 193

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.

p. 193

ALI J.-I agree.

p. 193

Case remanded. Agent for the appellant : M. S. K. Sastri Agent for the respondent: Ganpat Rai.

p. 193

SURAJPAL SINGH AND OTHERS

p. 193

THE STATE

p. 193

FAZL ALI and BosE JJ.J

p. 193

Criminal Procedure Code (Act V of 1898), s. 417-Appeal again.rt acquittal-lnterfert:nce-Guiding principle.

p. 193

It is well' settled that in an appeal under s. 417 of the Criminal Procedure Code, the High Court has full power review ·the evidence upon which the order of· acquittal was foonded. But it is equally well settled that the presumption of innocence of the accused is further reinforced by his acquittal by the trial Court and' the findings of the trial 'Court which had the aqvantagc of seeing the witnesses and hearing their evidence can be reversed only foc very substantial and compelling reasons • ..

p. 193