JUDGMENT Banerji and Aikman, JJ.
1. This appeal has arisen in a suit brought upon a mortgage, dated the 22nd of November 1875. The mortgage deed provided that the mortgagees were to be placed in possession of the mortgaged property in lieu of interest. Instead of entering into possession themselves, the mortgagees granted a lease of the mortgaged property to the mortgagor on the day following that of the mortgage for the same term as the term of the mortgage. The mortgagor having made default in the payment of the rent stipulated in the lease, which was a sum equivalent to the amount of the interest chargeable on the mortgage debt, the present suit was brought to recover the amount alleged to be due upon the mortgage. No objection was raised in the Court below or has been raised in this Court as to the competency of the plaintiffs to maintain the present claim. The only question which has been raised, and which we have to determine, is whether, by reason of the granting of the lease to which we have referred, the relation which subsists between the parties was that of landholder and tenant and the plaintiffs' only remedy for the arrears due upon the lease was a suit in a Court of Revenue, or whether the parties stood to each other in the relation of mortgagee and mortgagor and the plaintiffs are entitled to maintain their claim in the Civil Court.
2. The learned Counsel for the appellants relied on an unreported judgment of this Court in Second Appeal No. 1112 of 1894, decided on the 8th of April 1897. The learned Counsel for the respondents on the other hand referred us to the case of Baghelin v. Mathura Prasad I.L.R. 4 All. 430. In the former case it was held that under the circumstances of that case the relation between the parties was that of landholder and tenant, the mortgagor having taken a lease from the mortgagee and attorned to him as his tenant. In the latter case it was held that the transaction was one of mortgage, and, although a lease had been granted, the relation between the parties remained that of mortgagor and mortgagee.
3. In our opinion each case must be decided with reference to its own peculiar circumstances. What we have to consider in this case is, what was the intention of the parties when they executed the deeds of the 22nd and 23rd of November 1875. If it was intended that both the deeds were to form a single transaction, namely, a transaction of mortgage, and the lease was granted simply to provide a mode for realizing the interest payable on the mortgage amount, we must hold that the parties stood in the relation of mortgagee and mortgagor, and that the relation was not altered by reason of the execution of the lease. In this case we find that the two documents were presented for registration on one and the same date, that the amount of rent reserved by the lease was exactly equivalent to the amount of interest payable on the mortgage, and that the mortgage deed contained a covenant to the effect that any arrears due by the lessee would be a charge on the mortgaged property. In the counter-part of the lease executed by the mortgagor on the 23rd of November 1875, there is a similar covenant by which the mortgaged property and other properties of one of the mortgagors were made security for the rent payable under the lease, that is, for the amount of interest chargeable under the mortgage. It is significant circumstance also that in the twelfth paragraph of his written statement, Altaf Ali, the principal defendant, says: that, the louse was executed only for the sake of facilitating the payment of interest. Taking all these circumstances into consideration, we are of opinion that it was not the intention of the parties that the lease was for any other purpose than the realization of the interest payable upon the mortgage, and that the two deeds of the 22nd and 23rd of November 1875, must be regarded as one and the same transaction. This case is therefore distinguishable from the unreported ruling relied on by the counsel for the appellants, and it is more in accordance with the case of Baghelin v. Mathura Prasad I.L.R. 4 All. 430.
4. The pleas raised in the appeal therefore fail. As was the case in the other appeals between the same parties decided to-day, the amount decreed should be reduced by Rs. 7,099-4-0, which the plaintiffs included in their claim by reason of the judgment of the Subordinate Judge in the suit out of which First Appeal No. 254 of 1894 arose.
5. The result is that we vary the decree below by making a decree in favour of the plaintiffs under Section 88 of Act No. IV of 1882, for the sale of the mortgaged property in the event of the defendants failing to pay to the plaintiffs or into Court on or before the 3rd of November 1897, Rs. 64,7714-0, together with interest at the rate of twelve annas and a half per cent, per mensem on Rs. 30,000, the principal amount of the mortgage, from the 30th of May 1895, to the 3rd of November 1897, aforesaid, or to the date of payment, if sooner made, together also with the plaintiffs' costs in the Court below, proportionate to the principal and interest now decreed, less Rs. 41-6-0 allowed to the defendants as their costs in that Court, and together also with the plaintiffs', costs of this appeal.