Rowland, J.@mdashThis appeal is presented by the plaintiffs in a suit to redeem a properly held by the defendants in usufructuary mortgage, and to recover possession of the property. The principal sum secured was Rs. 300 and the suit was brought on the footing that the mortgagees were under the terms of the mortgage, to remain in enjoyment of the usufruct in lieu of interest and accordingly the claim was to redeem on payment of the sum of Rs. 300 only. The deed however which being in the custody of the defendants has been produced by them, shows that in fact the terms were otherwise. The principal sum of Rs. 300 was to bear interest at the rate of Re. 1-5-0 per month bringing the gross annual interest to Rs. 47-4-0. The property was at the time of the hypothecation in temporary lease to a thicadar at an annual jama of Rs. 39 of which Rs. 9-8-0 was to be paid by the thicadar to Government as revenue and the balance Rs. 29-8-0 was payable to the proprietor. (This temporary lease terminated in 1279 F.S. so that from the year 1280 onwards the usufructuary mortgage was to be in khas possession of the property). The defendants claim that they are entitled to add to the principal each year the sum of Rs. 17-12-0, the difference between Rs. 29-8-0 and Rs. 47-4-0, which totals Rs. 1,072-14-0 for 60 years and two months. This claim the lower appellate Court has allowed. The defendants further claimed to add to the principal Rs. 240 on account of road cess paid by them year by year and Rs. 894-2-6 as interest thereon, but this has been disallowed.
2. The lower appellate Court rejected the plaintiffs'' contention that the re-handar should be called on to give an account of the actual profits received by him from the time that he came into khas possession of the property. Hence the appeal. The learned Sub-ordinate Judge thought the demand for account was a new claim not set up by the parties in proper time, and for this reason he disallowed it. It will be convenient to consider first the rights of the parties under the law; and then whether the state of the pleadings justifies depriving the plaintiffs of any relief they might be in law entitled to.
3. Section 76, T.P. Act, Cls. (g) and (h) are quite clear; the mortgagee in'' possession must keep full and accurate accounts, and all his receipts from the mortgage-property (subject to allowance for certain specified and permissible expenses) are to be credited in favour of the mortgagor in reduction of the amount due for interest or in reduction of the principal if the receipts exceed the interest due; and if there is still a surplus, it is repayable to the mortgagor. These clauses are not qualified by any such proviso as "in the absence of a contract to the contrary"; therefore they apply in all cases, contract or no contract to the contrary, excepting those in which section 77 makes them inapplicable: see Kishun Lal v. Hira Lal, 1929 Pat 571 = 120 IC 768:
every mortgagee in possession is bound to account under S. 76 (h), T.P. Art, unless he establishes a contract in terms of S. 77 of that Act.
4. Now, the cases falling within S. 77 are those in which under the contract between the parties the receipts from the mortgaged property are deemed sufficient to satisfy all the interest from time to time accruing (so as to prevent there being any incense in the total sum due), or are deemed sufficient to do more than this, that is to say to satisfy, year by year, not only all the interest but a specified part of the principal. In short S. 77 only comes in where the mortgagor is from the outset safe from being confronted at the time of redemption with a demand for anything more than the principal sum advanced. S. 77 does not cover the case in which only a part of the interest is to be paid out of the usufruct; and the omission must have been intentional, as pointed out in Md. Tshaq Khan v. Rup Narain Singh, 1931 All 562 = 136 IC 363 = 54 All 205 (FB). It follows that in such a case the mortgagee in possession is liable to account.
5. Such are the rights of the parties under the Transfer of Property Act. But it is said for the respondents that the document under consideration dates from before the Act. In answer, I may point out that the Allahabad case just cited was a case of a transaction entered into before the passing of the Act, but nevertheless was held to be governed by the principle of Ss. 76 and 77; it was said:
The liability of the mortgagee to render accounts was well recognized even before the coining into force of the Transfer of Property Act.
6. Such being the rights of the parties, it remains to see whether the decision should go otherwise in consequence of the state of the pleadings. The Munsif thought that the suit should be dismissed altogether when he found the plaintiffs not entitled to redeem on payment of Rs. 300 only. This extreme position is not now supported by anyone; but that taken by the Subordinate judge is really no more tenable when examined closely. He says "no case for accounting was set up" in the plaint, and we should not "make out a case not contemplated by the parties." On the strength of these well-worn platitudes he gives the defendants a decree for over a thousand rupees without demanding of them any .proof whatever of the correctness of their claim. The result is startling enough to suggest a fallacy in the reasoning. In substance, the plaint claimed that the interest on the debt was fully satisfied out of the income of the property; and it is true to say that, if the defendants admitted that no case for accounting need arise. But when the defendants alleged that year by year the income fell short of the interest accruing, then (on the face of the written statement), S. 77 became inapplicable S. 76, Cls. (g) and (h) governed the case, and a position arose in which the defendants were bound to account. The issues were badly framed in the Munsif''s Court, thus: (6) Is the defendant entitled to get interest under the terms of the zarpeshgi deed in suit ? (7) Are the plaintiffs entilled to redeem without paying interest ?
7. A proper form in which to frame these issues was: (6) Is anything due to defendant on account of interest ? (7) If anything is due, how much ? Issue 10: "To what relief are the plaintiffs entitled ?" is in order.
8. I would under O. 41, R. 25, Civil P.C., refer these issues to the lower appellate Court for taking an account from the defendants and, on taking account for a proper determination of the issues as amended; the burden of proof being on the defendants on both issues. The findings and evidence to be returned to this Court within three months.
Agarwala, J.
9. I agree.
