ANANDRAM JIVRAJ GAGLE versus PREMRAJ MUKANDAS & ORS.

Citation: [1968] 1 S.C.R. 424 · Decided: 31-08-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

ANANDRAM JIVRAJ CAGLE 
v. 
PREMRAJ MUKANDAS &: ORS. 
August 31, 1967 
(J, C. SHAH, S. M. SIKRI AND J. M. SHELAT, JJ.] 
Transfef' of Property Act (4 of 1882), ss. 76(d) and 76(h)-Ptio-
rities laid down in s. 76(h) whether subject to those in s. 76(d). 
The respondents filed a suit against !he appellant for redemp-
tion . of a mortgage. The suit was decreed subject to payment of 
a sum of Rs. 9,224-lZ.O towards principal and interest within six 
months. A preliminary decree was directed to be drawn up. The 
appellant· filed an appeal in the Court of the District Judge and 
inter alia urged that "the court oJght to have directed the Com-
missioner to deduct the rent received (i) first towards taxes, then 
(ii) towards interest of the amount, of repairs etc., then (iii) to-
wardB interest on the principal amount, then towards (iv) amount 
of repairs and expenses and then towards the principal of the loan." 
The appeal was dismissed. A second appeal in the High Court also 
f11iled. The appellant. came to this Court by special leave. It was 
urged on his tehalf that the priorities in s. 76(h) of the Transfer 
of Property Act were sutject to the priorities ln s. 76(d) and there-
fore interest on the principal amount should, in thE! present case, 
have ti.ren given priority over the payment of the expenditure on 
maintenance and . repairs. 
Held: The appeal must fail. 
A 
B 
c 
D 
The object of s. 76(d} is not to fix any priorities but to make it 
E 
obligatory on t.h!! mortgagee, .in the absence of a contract to the con-
trary to carry out necessary repairs to.· the property but the amount 
he can spend is limited to the difference between rents and profits 
and payments mentioned in cl. ( c) and the interest on the principal 
money. It is cl. (h) which directs the mortgagee to apply the 
receipts from the mortgaged property in a certain manner. . The 
order of application is (1) the expenses properly incurred! for the 
management of the property and the collection of rents and' profits 
and the other expenses mentioned in ds,. (c) and (d), (2) interest 
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thereon, (3) the surplus, if any, has to be utilised towards reduction 
of interest on principal money and ( 4) the principal money itself. 
There is no contradiction between s. 76(d) and s. 76(h). The fact 
that s. 76(d) limits the scope of the liability has no bearing on the 
question whether it lays down any order of priorities inconsistent 
with those mentioned in cl. (h) [ 428B-EJ 
OVIL APPELLATE JURISDICTION: Civil 
Appeal No. 8 of 
1965. 
G 
Appeal by specjal leave from the judgment and decree dated 
October 5, 1962 of the Bombay High Court in Appeal· No. 598 of 
1960. from Appellate Decree. 
S. T. Ilesai and /. P. Aggarwal, for the appellant. 
0. P. Mdlhotra, and P. C. Bhartari, for the respondents. 
~' 
R 
I 
. 
A 
B 
c 
D 
E 
p 
0 
R 
ANANDllAM I'. PREllllAJ .(Sikri, J.) 
The Judgment of the Court was delivered by 
Sikri, I. This appeal by special leave is directed against the 
judgment and decree of the Bombay High Court in Appeal No. 
598- of 1960, whereby the High Court confirmed the judgment and 
decree dated January 30, 1960, passed by the Extra Assistant 
Judge, District Court, Ahmednagar, in Regular Appeal No. 300 
of 1958, confirming the decree dated April 7, 1958, passed by the 
Joint Civil Judge, Junior Division, Ahmednagar, in Civil Suit 
No. 609 of 1948. 
The relevant facts for the determination of the points raised 
before us by the learned counsel for the appellant-mortgagee, are 
as fo!lows: The respondents before us filed a suit for the redemp-
tion of the mortgage of a bungalow at Ahmednagar alleging that 
the sale-deed in respect of this bungalow for Rs. 5,000 was in fact 
a possessory mortgage. One of the terms of this deed, dated August 
4, 1928, was : 
"However, a condition is laid down that if we pay 
you within three years from this day Rupees five thousand 
relating to this sale-deed, and (interest) thereon at the rate 
of 12 twelve annas per cent per mensem at yearly rests, 
and the amounts spent by you to meet the expenses for 
repairs, constructions, taxes, etc. together with interest (at 
the rate) mentioned above, ...... you are to receive the 
same and allow us to purchase the aforesaid property 
back." 
The transaction was held to be a mortgage and there is no dispute 
on this point. On April 7. 1958, the suit was finally decreed for 
redemption of the property subject to a payment of Rs .. 9,224-.12-0, 
Rs. 4,612-6-0 as princi

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