TMI Blog1961 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction. The said findings clearly attract the provisions of s. 90 of the Indian Trusts Act. In view of the aforesaid principles, the right to redeem the mortgage is not extinguished and in the eye of law the purchase in the rent sale must be deemed to have been made in trust for the mortgagor. In the promises, the High Court was right in holding that the suit for redemption was maintainable. - Civil Appeal No. 119 of 1957 - - - Dated:- 14-3-1961 - Subbarao, K. And Dayal, Raghubar,JJ. For the Petitioner : B. Patnaik For the Respondent : D. N. Mukherjee JUDGMENT 1961. March 14. The Judgment of the Court was delivered by SUBBA RAO, J.-This is an appeal by special leave against the judgment of the High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As the mortgagor died after the filing of the suit, his widow and son were brought on record as his legal representatives. The defence of the appellants to that suit was that possession was not delivered to their father, the mortgagee, under the terms of the mortgage deed, that the debt was discharged, that their father had purchased the equity of redemption in execution of the rent decree, and that the mortgagor had no longer any right to sue him for redemption. The learned Subordinate Judge and, on appeal, the District Judge concurrently found that in fact possession was delivered to the mortgagee on the basis of the mortgage deed and that the plea of discharge was not true; but, while the trial court held that after the purchase of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions it is necessary to notice briefly the law on the subject. The relevant section governing the facts of the case is s. 90 of the Indian Trusts Act, 1882 (2 of 1882). The material portion of the section reads, Where a mortgagee by availing him,self of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to the repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage. Illustration (c) to that section says, A mortgages land to B, who enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mortgagee in possession of a tenant s interest purchased the said interest in execution of a decree for arrears of rent obtained by the landlord. It was contended there, as it is contended here, that the defendant, being a mortgagee in possession, was bound to pay the rent and so cannot take advantage of his own default and deprive the mortgagors of their interest. Bose, J., speaking for the Court, observed at p. 337 thus: The position, in our opinion, is very clear and in the absence of any special statutory provision to the contrary is governed by s. 90, Trusts Act. The defendant is a mortgagee and, apart from special statutes, the only way in which a mortgage can be terminated as between the parties to it is by the act of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mortgage deed made a default with the result the. property was sold and purchased by the mortgagee himself. The proposition enunciated by the Judicial Committee would apply to a case where the equity of redemption was extinguished by the court sale. This may apply to a case, where the mortgagee, after obtaining leave to bid., purchases at a sale in execution of his decree or a decree obtained by a third party. In such a case there may be scope for the argument that the equity of redemption is extinguished and, therefore, the mortgagor cannot get relief till the sale is set aside in the manner known to law. But when the sale is brought about by the default of the mortgagee, the mortgage is not extinguished and the relationship of mortga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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