P L D 1952 Lahore 600 (PLP)

In Sohan Lal v. Labh Singh I L R 1943 Lah. 746, Tek Chand and Beckett, JJ., followed the latter view, observing that there was no difference in substance between cases in which the mortgage is simple and those where it is possessory or by way of conditional sale. In all cases the mortgage holds good to the extent of the amount paid and the mortgagee cannot be compelled to lend more. If possession has passed, the mortgagor might sue to get it back after a time or take steps to relieve himself of some of the other conditions of the mortgage. If he has suffered any loss, he may sue for damages. But it seems clear that the unpaid part of the mortgage‑money is not a "debt" nor has the mortgagor an actionable claim for its recovery against the mortgagee. Sitting in Single Bench, it would not be proper for me to prefer one of these views to the other and as an important question of law is ‑ involved, it is desirable that the matter should be referred to a Full Bench. The case should be placed before My Lord the Chief Justice for orders. SHABIR AHMAD, J.‑The facts relevant for the decision of this second appeal may be briefly stated. Khushi Muhammad, Ghulam Rasul, Daswandhi and Nur Din, who will in the sequel be referred to as defendants 1, 2, 3 and 4, respectively, were joint owners of some land situated in village Kot Chadu, Tehsil Daska of the Sialkot District. In 1926, Mula Singh, who will in the sequel be referred to as the plain tiff, became a mortgagee for Rs. 497 with possession of Khasrai No. 5 out of the land of the defendants, the mortgagor being defendant No.

3. On 14th of March, 1933, by a mortgage deed copy of which is Exh. P. A. on the record, defendants 1 to 4 mortgaged with possession to the plaintiff land bearing Khasra Nos. 11/2, 12, 13, 17 and 309 in the Jamabandi of 1940‑41, along with some other land for Rs. 4,

030. Out of this sum of Rs. 4,030, Rs. 1,000 was left with the plaintiff for payment to one Hartaba Singh, who was mortgagee of some other land of the four defendants and a sum of Rs. 500 was left with the plaintiff for payment to one Shukrullah, who was the prior mortgagee of the land mortgaged to the plaintiff by the mortgage‑deed, dated 14th of March 1933. Subsequent to the mortgage of 1933, defendant No. 4 on one side and defendants Nos. 1, 2 and 3 on the other partitioned their joint property and some time after the partition, defendant No, 4 redeemed the land that had fallen to his share. In 1944, defendant No. 1 applied to the Collector, Sialkot, to get an order of redemption of the whole land still in mortgage with the plaintiff and deposited Rs. 2,000 with the application. In pursuance of this application by an order dated 29th of November, 1944 it was held that defendant No. 1 could redeem the property on payment of Rs. 519‑8‑0 more. The figure of Rs. 2,519‑8‑0 was arrived at in the following manner. Rs. 497 represented the mortgage money for which Khasra No. 5 was under mortgage and the balance of Rs. 2022‑8‑0 re presented the ths of Rs. 4,030 less Rs. 1,000, which had been left for payment to Hartaba Singh and which the plaintiff was held not to have paid to him. Feeling aggrieved by the order of the Collector the plain tiff instituted a suit for a declaration that the order of the Collector was invalid and that he was entitled to Rs. 497 with respect to the mortgage of Khasra No. 5 and Rs. 3,022‑8‑0 for the mortgage of the rest of the land. During the pendency, in the trial Court, of the suit instituted by the plaintiff, defendants 1, 2 and 3 obtained possession' of land in pursuance of the order of the Collector and the plaintiff amended his plaint and prayed for possession of the land as a mortgagee on the ground that he was entitled to retain possession of the land in suit as long as Rs. 3,519‑8‑0 were not paid to .him in full. . Only defendants 1 and 2 resisted the suit and their main plea was that as the plaintiff had not paid Rs. 1,000 which had been left with him for payment to Hartaba Singh, he was not entitled to claim that amount. The case of the plaintiff was that the sum of Rs. 1,000 left with him by defendants 1 to 4 had been attached for payment in execution of decrees against defendants 1 and 3 and had been recovered from the plaintiff. On the pleadings of the parties, the following issues were framed :‑ (1) Was the sum of Rs. 1,000 left with the mortgagee under mortgage‑deed, Exh. P. A. attached and paid by the mortgagee, in some decrees against the mortgagors and plaintiff is on that ground entitled to the same from defend ants? To what extent? O. P. P. (2) Relief. Mr. Iqbal Ahmad, Subordinate Judge, 1st Class, Sialkot, who heard the suit, held that the plaintiff had failed to prove that he had validly paid any sum out of Rs. 1,000 left with him for payment to Hartaba Singh. At the time of arguments, Rs. 130 appear to have been claimed by the plaintiff on the ground that though at the time of the mortgage‑deed, dated 14th of March 1933 only Rs. 500 were left with him for payment to Shukrul lah, the prior mortgagee, of the land, the plaintiff had actually had to pay Rs. 630 and was, therefore, entitled to receive Rs. 130 on that account. The item of Rs. 130 was, however, disallowed by the trial Court on the ground that it had not been claimed in the plaint. With regard to the item of Rs. 1,000 it was held that though it was, not proved that the plaintiff had made any valid payment out of Rs. 1,000, yet defendants 1, 2 and 3 could claim only Rs. 750 out of it; because Rs. 250 would represent the one‑fourth share of defendant No. 4, who had already redeemed the land which had fallen to his share on partition with defendants 1 to

3. In the result, the trial Court granted the plaintiff a decree for a declaration that he was entitled to a sum of Rs. 250 with respect to the mortgage of 14th of March 1933 over Khasra Nos. 11/2, 12, 13, 17 and 309 and that defendants 1 to 3 had to deposit that sum in Court by 8th of May 1946 for payment to the plaintiff, failing which the plaintiff was to be deemed to be entitled to possession of those Khasra Nos. against defendants as mortgagee to the extent of Rs.

250. Against the decision of Mr. Iqbal Ahmad, Subordinate judge, the plaintiff lodged an appeal, which was heard by L. Sansar Chand, Senior Subordinate Judge, Sialkot, who, by his order dated 31st of May 1946, held that the plaintiff was entitled to receive Rs. 614 more than the amount granted by the trial Court from defendants 1 and 3, because payment of that amount had been made in execution of decrees against those two defendants. The decree of the Senior Subordinate judge provided that if the sum of Rs. 614 were not paid in Court along with the sum of Rs. 250, decreed by the' trial Court by 2nd of July 1946, the plaintiff was entitled to posses sion of Khasra Nos. 11/2, 12, 13, 17 and 309 as a mortgagee for the amount decreed. Against the decree of the Senior Subordinate Judge, Sialkot, defendant No. 1 has appealed and the plaintiff has put in cross‑objections claiming Rs. 130, which were paid to Shukrullah, the prior mortgagee in excess of the money left with him for payment to him. I might say at the outset that the lower appellate Court has committed an error in calculation in arriving at the figure Rs. 614, because even, if the items claimed by the plaintiff as having been paid in satisfaction of decrees against defendants 1 and 3 be granted to him, the amount would come to Rs. 511‑14‑0 only'. The question for decision is whether or not the plaintiff is entitled to receive the money, which he claims to have paid in satisfaction of decrees against defendants 1 and

3. The plaintiff was bound to pay the money, if what he held for payment to Hartaba Singh was a debt due to the persons against whom the decrees were being executed, but if the money was not such a debt section 60 and Order XXI rule 46 of the Code of Civil Procedure will have no application and the plaintiff made payment at his own risk. After fully considering the matter I have arrived at the conclusion that the money which the plaintiff held for payment to Hartaba Singh was not a debt due to the defendants and could not, therefore, be validly attached in execution of decrees against defendants 1 and

3. If a mortgagor leaves some mortgage amount with the mortgagee for payment to a third party the mortgagor cannot be considered to be a creditor of the mortgagee for that amount and the mortgagee cannot be compelled to make payment as it is no more than an agreement to lend money and of such agreements no specific performance can be claimed. It is settled law that if a mortgagee who keeps a part of the mortgage amount for payment to the mortgagor at a later date refuses to pay the amount he cannot be compelled to make payment though he may be liable for damages and the mortgage already entered into will hold good only for the amount actually paid by the mortgagee. The question whether or not mortgage amount left with a mortgagee is a debt due to the mortgagor came up for decision before a Division Bench of this Court (Addison and Din Muhammad, JJ.) in Sewa Singh v. Milkha Singh and others I L R (1936) 17 Lah. 270, and it was held that the unpaid consideration of a mortgage was not a debt due to the mortgagor and could not, therefore, be attached in execution of a decree against the mortgagor. The facts in the reported case were that a part of the consideration of a mortgage was left with the mortgagees to redeem a mortgage of other land of the mortgagor in favour of a third party. A fourth party obtained a decree against the mortgagor and in execution of that decree attached the balance left with the mortgagees. The mortgagees preferred objections to the effect that the unpaid consideration could not be attached in their hands for execution of a decree against the mortgagor and on the objec tions being dismissed lodged a suit under Order XXI rule 63, Civil P. C. for a declaration that the unpaid balance in their hands was not liable to attachment. The suit was decreed by the trial Court but the District judge who heard the appeal reversed that decision. An appeal to this Court against the decision of the District Judge was dismissed by Single Bench and an appeal under clause (10) of the Letters Patent having been instituted the Division Bench after considering the relevant law and decisions of different High Courts gave it as their view that a suit for specific performance of a contract to advance money on a mortgage was incompetent and any unpaid balance of the mortgage consideration could not, there fore, be attached in execution of a decree against the mortgagor. The same question came up for decision in Sohan Lal and another v. Labh Singh and others I L R 1943 Lah. 746, before another Division Bench (Tek Chand and Beckett, JJ.) and the decision was that the part of mortgage consideration left with a mortgagee was not a debt due to the mortgagor. The facts of this case were that one Sawan Singh created a usufructuary mortgage of certain land in favour of Labh Singh for Rs. 5,000 out of which Rs. 1,350 were left with the mortgagee for payment, to the mortgagor at a later date. Sawan Singh, the mortgagor, however, died childless before the money was paid to him and his estate devolved on has nephews Indar Singh and Mula Singh. Sohan Lal had a decree against Indar Singh and in execution of that decree he attached the sum of Rs. 1,350 which had been left with the mortgagee who objected to the attachment on two grounds one of them being that the money with him was not a debt due to the judgment‑debtor (Indar Singh) and could not, therefore, be attached. These objections were dismissed and the mortgagee Labh Singh, sued for a declaration that the sum of Rs. 1,350 lying with him could not be attached in execution of a decree against Indar Singh. The suit was dismissed by the trial Court but decreed by the District judge and an appeal to this Court was dismissed on the finding that the unpaid mortgage amount was not a debt due to the mortgagor. There is, however, a Division Bench decision of this Court which has taken a view contrary, to the one taken in the two above‑mentioned decisions. In Sardar Khan v. Hindu c7oint Family Firm Ram Lal‑Barkat Shah A I R 1936 (Lah.) 196, it was held by a Division Bench of this Court that where a mortgagor completes his part of the contract by putting a usufructuary mortgagee in possession and the mortgagee fails to discharge the consideration the mortgagor has a transferable claim in the unpaid balance and his assignee can sue the mortgagee for the amount. In coming to this conclusion the learned Judges (Currie and Bhide, JJ.) relied entirely on a Division Bench decision of the Allahabad High Court in Sheopati Singh and others v. Jagdeo Singh and another I L R (1930) 52 All. 761, which contains remarks to the effect that though a right to lend money could not be specifically enforced the case of a usufructuary mortgage must stand on a different footing especially when possession has been given and the stipulation is that the profits are to be set off against the interests as in such a case the suit is not really one for specific performance of a mere contract to lend money but to compel the defendant to perform his part of the contract when he has obtained delivery of possession of the property. Sheopati Singh v. Jagdeo Singh I L R (1930) 52 All. 761, was a decision by Suleman and Kendall, JJ. and it will be interesting to note that Kendall, J. while sitting as Single Bench in Bhairon Awasti v. Lalta Misir and others A I R 1934 (All.) 954, in which the question for decision was the same as in the present appeal held that money left with the mort gagee is not a debt as contemplated by Order XXI rule 130 (one of the Garnishee rules framed by, the Allahabad High Court) and hence cannot be attached. Explaining Sheopati Singh v. Jagdeo Singh I L R (1930) 52 All. 761, Kendall, J. is stated at page 955 of the report to have said that the remarks in the earlier decision. "that suit is not really one for the specific performance of a mere contract to lend money, but to compel the defendants to perform their part of the contract when they have. obtained delivery of possession of, the property". were mere obiter dictum. A decision by the Allahabad High Court in Khunni Lal v. Bankey Lal A I R 1934 (All.) 449, is also to the effect that the unpaid portion of loan by a mortgagee is not a debt and cannot be attached in execution of a decree against the mortgagor. This is a decision by a Division Bench (Kisch and Rachhpals Singh, JJ.) and doubts the correctness of the decision in Sheopati Singh v. Jagdeo Singh I L R (1930) 52 All.

761. Another decision of the Allahabad High Court reported in Phul Chand v. Chand Mal I L R (1908) 30 All. 252, also took the view contrary to the view taken in Sheopati Singh v. Jagdeo Singh I L R (1930) 52 All.

761. Sheopati Singh v. Jagdeo Singh I L R (1930) 52 All. 761, was, in my view not correctly decided and, therefore, Sardar Khan v. Ram Lal‑Barkat Shah A I R 1936 (Lah.) 196, which is based entirely on that decision cannot be considered, if I may say so with all respect, to be laying down the law correctly. What I have said about Sardar Khan v. Ram Lal‑Barkat Shah A I R 1936 (Lah.) 196, applies also to some Single Bench decisions of this Court which have taken the same view as Sardar Khan v. Ram Lal‑Barkat Shah A I R 1936 (Lah.) 196, I am, however, in respectful and complete agreement with the decisions of this Court in Sewa Singh v. Milkha Singh I L R (1936) 17 Lah. 270 and Sohan Lal v. Labh Singh I L R (1943) Lah. 746, and hold the view that these decisions laid down the law correctly. The plaintiff‑respondent being absent his point of view was not placed before the Court but I have considered the question whether or not the fact that a part of the unpaid mortgage consideration has been actually paid in execution of decrees against defendants Nos. 1 and 3 can make any difference, and have arrived at the conclusion that it cannot. The money was not a debt due to the mortgagors jointly or to one or more of them and could not, therefore, have been attached in execution of decree against all or any of them. The attachment being unwarranted, the subsequent payment, if any, cannot be deemed to be valid and binding on the mortgagors. There is also another way of looking at the matter. The money was‑left with the mortgagee by the mortgagors for a specific purpose and if the mortgagee wants to make the mortgagors or their property liable for that money without paying it to them he must prove that he had carried out the directions of the mortgagor contained in the mortgage deed dated 14th March 1933. There is yet another aspect of matter. The money was left with the plaintiff by all the defendants to be used for a purpose which was to the benefit of all of them and could not, therefore, be used by him for payment of debts of. any one or more of them. In this view of the matter also the payments alleged to have been made in satisfaction of decrees against defendants Nos. 1 and 3 could not be claimed by the plaintiff as a charge on the mortgaged property. For the reasons given above I accept the appeal and setting aside the decree of the lower appellate Court, restore that of the trial Court. Nobody appeared to support the cross objections and they are dismissed. In view of all the circumstances of the case I leave the parties to bear their own costs of the appeal and cross‑objections. MUHAMMAD SHARIF, J.‑I agree. K. M. A. Appeal dismissed.