Case: Kamakshaya Narayan Singh Vs. Chohan Ram &amp; Another

2. One Raja Nilkanth Narian Singh was the owner of Gadi Sirampur and he executed on 1-8-1914 a simple mortgage of Gandi Sirampur in favour of the Chota Nagpur Banking Association Limited. In 1920 the Bank filed a suit against his son Wazir Narain Singh to enforce the mortgage security and obtained a mortgage decree onThe Bank purchased as third share of Gadi Sirampur in execution of that decree onProceedings were taken to set aside this sale. During the pendency of these proceedings it appears that on 5-11-1925, Wazir Narian Singh granted a permanent lease of four villages Nawadih, Koldih, Pandna and Chihutia by a registered Patta to one Hiraman Ram who was the Manager and Karta of his joint Hindu family. The permanent lease was taken by him in his own name and in the name of his son Chohan Ram. An agreement was subsequently arrived at between the Bank and Wazir Narain Singh that if Wazir Narain Singh paid to the Bank on or before 16-8-1926 the sum of Rs. 1,10,631-4-0 the sale would be set aside. Wazir Narain Singh executed on 14-8-1926 a mortgage of Gadi Sirampur in favour of the Manager of the Court of Wards in charge of the Plaintiffs estate during his minority to secure repayment of a sum of Rs. 1,47,000/- and out of the same satisfied the dues of the Bank and the sale in favour of the Bank was accordingly setPlaintiff through the Manager of the Court of Wards filed a suit on 4-2-1929 to enforce this mortgage and he impleaded as co-defendants in that suit Hiraman Ram as Defendant 20 and his father Dilo Ram as DefendantA final decree for sale was passed on 18-9-1931, and the Plaintiff purchased Gadi Sirampur at the auction sale held in execution of this decree on 6-4-1935. Delivery of possession was obtained by the Plaintiff through the Court onDilo Ram died after the mortgage decree but Hiraman Ram and his son Chohan Ram continued in actual possession of the disputed villages and the Plaintiff therefore filed on 16-11-1939 the suit, out of which this appeal arises, in the Court of the Additional Subordinate Judge of Hazaribagh against Hirman Ram and Chohan Ram, Defendants 1 and 2 for khas possession of these villages. The Plaintiff contended that he was subrogated to the position of the Bank, that the decree which had been passed in the mortgage suit was binding on the Defendants, that he was the auction purchaser in execution of that mortgage decree and that the Patta being subsequent to the Plaintiffs mortgage thus came to an end and he was entitled to recover khas possession from the Defendants Defendant 2 filed his written statement contesting the Plaintiffs claim. He deemed that the plaintiff was subrogated to the position of the Bank. He contended that the decree in the mortgage suit was not binding on him as he was not a party to that suit. He further contended that the patta could not be put an end to by the auction sale of the mortgaged property. Defendant 1 filed a separate written statement. He denied that he was the Manager and Karta of the joint Hindu family. He also contended that there was a partition amongst the members of the joint family within a year after their possession of the properties in suit and the properties had been allotted at that partition to Defendant 2.3. The trial Court held that the Plaintiff was subrogated to the position of the Bank. It also held that Defendant 1 was the Manager and Karta of the joint family and that Defendant 2 was fully represented in the mortgage suit, that the decree in the mortgage suit was binding on the Defendants and that the Plaintiff was entitled to recover possession of the said properties and mesne profits from the Defendants. The Defendants appealed against this decree to the High Court of Judicature at Patna. The High Court negatived the contention in regard to constructive res judicata which was urged on behalf of the Plaintiff. It then considered the further contention that Wazir Narayan Singh had after creating the mortgage in favour of the Bank no power to grant the permanent lease in question to the Defendants. After considering all the authorities which were cited before it, it came to the conclusion that the question whether Wazir Narayan Singh had got such power or not had to be determined with reference to the provisions of S. 66, T. P. Act and the crucial test was whether the lease rendered the mortgages security insufficient. In spite of the fact that there was no allegation in the Plaint that the Defendants lease had the effect or rendering the security of the Bank insufficient, the High Court went into this question and on a calculation of some figures came to the conclusion that the lease of the disputed villages in favour of the Defendants did not in any way render the security of the bank insufficient. It therefore held that the lease was valid and was not affected by the Plaintiffs mortgage decree or by the execution sale under that decree and accordingly dismissed the Plaintiffs suit. The Plaintiff obtained leave to appeal to the Privy Council from this decision of the High Court and the appeal was admitted on 9-1-1946.4. Both the Courts below found that the Plaintiff was subrogated to the position of the Bank. They also found that Defendant 2 was sufficiently represented in the mortgage suit. These findings were not challenged before us and the only question which survived for our consideration was whether Wazir Narayan Singh had the power to grant a permanent lease to the Defendants so as to bind the Plaintiff.

Court's reasoning:
10.In our opinion S. 66, T. P. Act, has nothing to do with the mortgagors power to lease the mortgaged property. Section 66 is a statutory enactment of the powers of the mortgagor in possession in regard to waste of mortgaged property. The mortgagor in possession is not liable for what in terms of the English Law of Real Property is known as permissive waste i.e., for omission to repair or to prevent natural deterioration. He is, however, liable for destructive waste i.e. acts which are destructive or permanently injurious to the mortgaged property if the security was insufficient or would be rendered insufficient by such acts. This section therefore has no application to the grant of a lease by the mortgagor intrue position has been stated in the following terms by Mukherjee J. in Madan Mohan Singh v. Raj Kishore,21 cal. W. N. 88 at p.true position thus is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management, for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But it is not competent to the mortgagor to grant a lease on unusual terms, or to alter the character of the land or to authorise its use in manner or for a purpose different from the mode in which he himself had used it before he granted the mortgage.While we are on this subject we would like to emphasise that it is in for the lessee if he wants to resist the claim of the mortgagee to establish that the lease in his favour was granted on the usual terms in the ordinary course of management. Such a plea if established - and it must not be overlooked that the burden of proof in this matter is upon him - would furnish a complete answer to the claim of the mortgagee. If the lessee failed to establish this position he would have certainly no defence to an action at the instance of the mortgagee.No allegation was made on behalf of the defendants that the grant of the permanent lease was a dealing with the mortgaged property in the usual course of management by the mortgagor. In the absence of any such plea, we are of the opinion that there was no answer to the plaintiffs claim and the permanent lease granted by Wazir Narayan to the defendants could not prevail against the plaintiff.15. We have therefore come to the conclusion that Wazir Narayan Singh had no power to grant the permanent lease in question to the defendants, that the same was not binding and operative against the plaintiff, that the defendants had ample opportunity to redeem the mortgage if they so desired but did not choose to exercise their right of redemption, that the execution sale of Gudi Sirampur including the four villages in question was binding on them and that the plaintiff was entitled to khas possession of the four villages of which the defendants were in wrongful possession.