Kidar Lall Seal And Another vs Hari Lall Seal

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 101 of 1950

Decision Date: 18 December, 1951

Coram: Vivian Bose, Saiyid Fazal Ali

In the matter titled Kidar Lall Seal and Another versus Hari Lall Seal, the Supreme Court of India rendered its judgment on the eighteenth day of December, 1951. The opinion was authored by Justice Vivian Bose and the judgment was delivered by a bench comprising Justice Vivian Bose and Justice Saiyid Fazal Ali. The case is reported in the 1952 volume of the All India Reporter at page forty-seven and also appears in the 1952 Supreme Court Reporter at page one-seven-nine. The decision is cited in subsequent reports as D 1971 SC2177 (7) RF 1978 SC1329 (28). The legal issues concerned the provisions of the Transfer of Property Act of 1882, specifically sections eighty-two and ninety-two, and the Indian Contract Act of 1872, section forty-three, in the context of a mortgage and the right of contribution among co-mortgagors. The Court explained that the right of contribution between co-mortgagors is governed by sections eighty-two and ninety-two of the Transfer of Property Act rather than by section forty-three of the Contract Act, because the latter deals with contracts in general while the former specifically address contribution among co-mortgagors. The Court reiterated the well-established principle that when a general law and a special law both apply to a matter, the special law prevails and excludes the general. Accordingly, in the absence of a contrary agreement, co-mortgagers must contribute in proportion to the value of the shares or portions of the mortgaged property that each holds, and not merely according to the benefits each derives. The Court further held that it was inappropriate to introduce external equitable considerations into the analysis because sections eighty-two and ninety-two already set the conditions for contribution in mortgage cases under Indian law.

The appeal arose as Civil Appeal No. 101 of 1950, filed by special leave against a judgment and decree dated the twentieth of September, 1949, issued by the High Court of Judicature at Calcutta, wherein Chief Justice Hurries and Justice Chatterice presided over Appeal No. 46 of 1949. That appeal, in turn, stemmed from a decree dated the thirty-first of August, 1948, rendered by Justice S. B. Sinha of the Calcutta High Court in Suit No. 343 of 1943, which had been instituted under the original jurisdiction of the High Court. The Attorney-General for India, M. C. Setalvad, assisted by B. Sen, represented the appellant, while S. C. Isaac, aided by B. Barterice, acted for the respondent. The leading judgment was delivered by Justice Bose, with Justice Fazal Ali concurring. Justice Bose described the case as a defendant’s appeal in a contribution suit brought by the son of a mortgagor against the other co-mortgagors. The familial relationships were detailed as follows: Balai Lall Seal, who died in 1917, was married to Megharnala Dassi, who died in 1945. Their children included Bejoy Lall, Biswa Lall, Tarak Lall, Kedar Lall, and Naku Lall, the latter of whom died on the twenty-third of May, 1933, and another sibling who died in November 1936. The defendants were identified as the two surviving brothers, born on the seventh of February, 1910. The plaintiff, Jugal Lall, was born on the twenty-second of November, 1907, and the respondent, Hari Lall, was born on the same date. The mortgagors in the original transaction were the plaintiff’s father, Tarak Lall, together with Tarak’s two brothers, Kedar Lall and Naku Lall.

In this matter the mortgage was executed on 12 June 1936 in favour of one Master Gyarsi for a principal amount of Rs 80,000. For ease of reference the Court designates this mortgage as the “suit mortgage,” although the present proceeding is not a suit on that mortgage. Master Gyarsi, acting as mortgagee, instituted suit proceedings in 1938 and obtained a preliminary decree for sale on 17 February 1939 directing that the mortgaged property be sold for Rs 89,485-12-9 together with costs. That decree was made final on 22 December 1989. During the execution of the decree the mortgagee pursued the property of the plaintiff alone, the plaintiff being the son of the original mortgagor Tarak Lall. While the execution was pending, the mortgagee assigned her rights under the decree to Hooghly Flour Mills. The Mills continued the execution and, on 11 March 1943, the claim was satisfied in that manner. The Court subsequently issued an order authorising the sale of a portion of the mortgaged premises, namely 20 Round Tank Lane, which belonged exclusively to the plaintiff, to the decree-holder for Rs 1,50,000. The order required that the consideration first be applied to the outstanding claim and costs, and then mandated that the decree-holder execute a reconveyance of the remaining mortgaged properties back to the mortgagors. The Court’s sanction was necessary because the judgment-debtor, Hari Lall—the present plaintiff—was a minor at the time.

Consequently, on 18 March 1943 the plaintiff transferred 20 Round Tank Lane to Hooghly Flour Mills. From the sale price a sum of Rs 97,116-11-0 was paid to the Mills, fully satisfying the claim and the costs then due. On the same day the Mills executed a reconveyance of the balance of the mortgaged properties to the mortgagors, thereby releasing the mortgage. In addition to the Rs 97,116-11-0, two further amounts—Rs 14,400 and Rs 8,100—had been paid before those transactions. Those sums were paid by a Receiver appointed by the Court pendente-lite and were drawn from rents that the Receiver had collected on the plaintiff’s property, 20 Round Tank Lane. The plaintiff contends that, by reason of those payments, he has discharged a total of Rs 1,19,116-11-0 in satisfaction of the mortgage. One-third of that total, amounting to Rs 39,872-3-8, is his share. He therefore claims that the balance of Rs 79,744-7-4 is owed to him by the two defendants, each being liable for half of that balance, i.e., Rs 39,872-3-8. The plaintiff also incurred litigation costs of Rs 1,144-8-6 in resisting Master Gyarsi’s claim and in connection with the reconveyance. He asserts a one-third share of those costs, namely Rs 381-8-2, from each defendant. Accordingly, the plaintiff’s total claim against each defendant amounts to Rs 40,253-11-10. In addition, the plaintiff seeks (1) a declaration that the properties listed in Schedule “A,” which belong to the defendants, stand charged with the repayment of the sum of Rs …

The plaintiff asked the Court for two orders: first, a declaration that the properties listed in Schedule A, which are owned exclusively by the two defendants, stand charged with the repayment of Rs 80,507-7-8, the total amount due and payable by the defendants; and second, a decree under Order XXXIV of the Civil Procedure Code in the proper form. Schedule A enumerates the remaining mortgaged properties that belong solely to the defendants. The plaintiff’s claim rested on the proposition that each of the three mortgagors was required to contribute an equal share toward the mortgage debt. The defendants did not dispute their obligation to contribute, but they contested the method by which the contribution should be calculated. They relied on a special agreement that they said had been made between Tarak Lal and themselves, which prescribed a different way of apportioning liability. According to the defendants, the large sum of Rs 80,000 obtained through what the Court later called the suit mortgage had been borrowed principally to discharge earlier debts that the parties had incurred under previous mortgages. Of that amount, only Rs 13,259-2-4 had been applied to satisfy the defendants’ portion of those earlier obligations, so the defendants argued that the benefit they received from the Rs 80,000 was limited to that amount. By contrast, the plaintiff’s father, Tarak, had received a benefit of Rs 53,481-11-4. Consequently, the defendants claimed that, at the time the suit mortgage was executed, they had agreed that each party’s liability to one another should be proportional to the benefit each had derived, as described. The trial judge, Sinha J., who heard the case at the original side of the Calcutta High Court, held that the agreement was proved. However, on appeal, both the learned Chief Justice of the High Court and Chatterjee J. disagreed, finding that the agreement was not proved. The present Court, agreeing with the appellate judges for reasons to be explained later, found it unnecessary to repeat all the factual details already set out in the two High Court judgments. The matter before this Court was limited to a point of principle, and it was therefore convenient to present the issue in its simplest form. The dispute concerned four parcels of property, identified here as Chittaranjan Avenue, Strand Road, No. 16 Round Tank Lane and No. 20 Round Tank Lane. Originally these parcels were part of a joint family estate, but in 1932 a partition was compelled by a suit filed by Tarak against his brothers and mother. The partition resulted in the following allocation: (1) Bejoy, Kedar, Naku and the mother, Meghamala, received Chittaranjan Avenue; (2) Tarak, the plaintiff’s father, received 16 Round Tank Lane and 20 Round Tank Lane; and (3) Kedar, Naku and Biswa Lall received Strand Road. Prior to this partition three mortgages had been created. The first mortgage, dated 16 June 1925, was taken jointly by all five brothers, who mortgaged the Strand Road property for Rs 10,000 in favour of Bhuvan Chandra Bhur. The second mortgage was executed on 11 October 1926.

In the year 1926, Bejoy and Tarak mortgaged their two-fifths share of the properties known as Chittaranjan Avenue, Strand Road, Dum Dum and Twenty Round Tank Lane for a sum of five thousand rupees. The mortgage was granted to Binode Behari Sen, who became the mortgagee of that transaction.

A second mortgage was executed on the twenty-eighth day of January, 1927. In this later deed, Bejoy and Tarak again mortgaged the same two-fifths share in the four properties identified above, this time for a consideration of seven thousand rupees. The mortgagees in this instance were Binode Behari Sen together with Kunja Behari Sen, who together received the security interest over the described lands.

All three groups of mortgagees, or their duly authorised representatives, subsequently instituted legal suits to enforce their respective mortgages. Each suit culminated in the issuance of a final decree in favour of the mortgagee concerned. During the intervening period, Bejoy died on the twenty-third of May, 1933, leaving a surviving son named Jugal as his heir.

On the twelfth day of June, 1936, a further mortgage—referred to in the judgment as the “suit mortgage”—was executed by the three brothers Tarak, Kedar and Naku. This mortgage was for a total principal amount of eighty thousand rupees. The assets offered as security comprised three separate categories: (1) the shares that Kedar and Naku held in Chittaranjan Avenue and in Sixteen Round Tank Lane; (2) the parcel known as Twenty Round Tank Lane, which had been allocated to Tarak; and (3) the reversionary interest of all three brothers in the share that had been allotted to their mother.

The eighty-thousand-rupee consideration advanced under the 1936 suit mortgage was applied in the following manner. Twenty-nine thousand six hundred and sixty-seven rupees and ten annas were paid by Tarak, Kedar and Naku to satisfy the first mortgage together with a later decretal charge. An amount of eleven thousand five hundred and nineteen rupees and eleven annas was applied in discharge of the second mortgage, and thirteen thousand five hundred and two rupees and fourteen annas was applied to satisfy the third mortgage. The residual sum of twenty-five thousand three hundred and ten rupees is alleged by the appellants to have been retained by Tarak.

The figures set out above are drawn directly from the judgments of the High Court. It is acknowledged that certain details of the financial transactions remain in dispute; consequently the present description does not constitute a pronouncement on the correctness of those details but merely provides an overall factual picture for the purpose of analysis.

To illustrate the underlying problem in its simplest form, the Court reduces the factual matrix to a hypothetical scenario involving three persons, designated A, B and C, each owning distinct properties of unequal market values. Assume that at the relevant date the values of the properties are as follows: A’s property, Blackacre, is worth thirty thousand rupees; B’s property, Whiteacre, is valued at twenty thousand rupees; and C’s property, Greenacre, is worth ten thousand rupees.

From time to time these three individuals incur various debts, possibly secured on the respective properties or otherwise. For the present analysis it is irrelevant whether the debts are secured, because a later stage will require the determination and apportionment of each person’s separate liability to the others. Suppose that after all calculations are completed, A’s personal liability amounts to two thousand rupees, B’s liability is three thousand rupees and C’s liability reaches five thousand rupees.

In order to discharge these combined debts, A, B and C jointly mortgage their three estates for a total principal amount of ten thousand rupees, which represents the aggregate sum due at the date the mortgage was created. No contractual provision—either within the mortgage deed or in any separate agreement—allocates to any of the parties a specific share of responsibility for the ten-thousand-rupee debt.

Subsequently, at the time of redemption, the outstanding mortgage debt has increased to fifteen thousand rupees due to accrued interest and other charges. A alone proceeds to redeem the mortgage by selling his own estate, Blackacre, to the mortgagee for thirty-five thousand rupees, which reflects the market value of Blackacre at the date of redemption. Of this sale proceeds, fifteen thousand rupees is applied to satisfy the total mortgage debt, leaving a balance of twenty thousand rupees that remains with A after the redemption.

The Court observed that after A redeemed the mortgage by selling his separate estate of Blackacre for Rs 35,000, the sum of Rs 15,000 was applied to discharge the mortgage debt and the remaining balance of Rs 20,000 was retained by A. The Court then framed the question of what rights A possessed against the co-mortgagors B and C in respect of that retained amount. It noted that three possible methods of apportioning the liability could be suggested. The first method would treat the three parties as equally liable, which would require B to pay A Rs 5,000 and C to pay A an equal amount of Rs 5,000. The second method would allocate liability in proportion to the benefits each party derived from the mortgage; under this approach B’s share would be three-tenths of Rs 15,000, that is Rs 4,500, and C’s share would be five-tenths of Rs 15,000, that is Rs 7,500. The third method would distribute the liability in proportion to the values of the mortgaged properties, which would obligate B to pay two-sixths of Rs 15,000, namely Rs 5,000, and C to pay one-sixth of Rs 15,000, namely Rs 2,500. The Court identified the need to determine which of these three calculations should be applied. In the absence of any further considerations, it considered the second method – the proportional allocation based on benefit – to be the most equitable. However, the Court cautioned that the issue could not be resolved on equity alone because statutory provisions had to be examined. The learned counsel for the plaintiff-respondent argued that section 43 of the Contract Act was applicable. The provision states: “Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract. If any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.” The argument advanced was that, unless the contract expressly indicated otherwise, the loss must be shared equally. The Court agreed that the reference to “the contract” could only denote the primary contract between the joint promisors and the promisee, which in the present case was the mortgage deed, and that there was no express term to the contrary within that document. Consequently, the counsel contended that section 43 should govern. The Court, however, noted that because the matter involved a mortgage, it was also necessary to consider the relevant provisions of the Transfer of Property Act, namely sections 82 and 92. Section 82 confers a right of contribution among co-owners of mortgaged property, while section 92 provides a right of subrogation to a co-mortgagor who redeems the property. The Court indicated that these statutory provisions must be examined before reaching a final conclusion on the appropriate method of apportioning A’s right against B and C.

In the present matter, the Court observed that where there is no contract to the contrary, each mortgagor is liable to contribute proportionately to the debt secured by the mortgage. The Court then examined section 92 of the Transfer of Property Act, which provides that any co-mortgagor who redeems the mortgaged property shall, with respect to redemption, foreclosure or sale, enjoy the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor. Both of these statutory provisions therefore apply to the case. The Court noted that the operation of sections 82 and 92 of the Transfer of Property Act creates a direct conflict with section 43 of the Contract Act and with the principle that liability should be distributed on a beneficial, rather than a strictly proportional, basis. The Court stated that the equitable solution suggested earlier in the judgment must be rejected because the issues have already been settled by statute, and statutory rights cannot be superseded by equitable principles, however attractive they might appear. The Privy Council, in Rani Chhatra Kumari v. Mohan Bikram (1) (1931) I.L.R. 10 Pat. 851 at 869, held that the doctrine of equitable estate has no application in India. Similarly, the Privy Council in Mohammad Sher Khan v. Seth Swami Dayal (1) held that the right of redemption is now governed by statute, namely section 60 of the Transfer of Property Act. Sulaiman C.J., later a judge of the Federal Court, ruled in Hira Singh v. Jai Singh (2) that equitable considerations should not be invoked in sub-rogation matters under sections 91, 92, 101 and 105 of the Transfer of Property Act. Stone C.J. and the Court likewise rejected equitable interference in the Nagpur High Court case Taibai v. Wasudeorao (3). In the context of section 82, the Privy Council in Ganesh Lal v. Charan Singh (4) ruled that the section specifies the conditions for contribution and that no extraneous principle may be introduced to alter the statutory provisions.

The Court further explained that the decision must rest solely on the statutory provision that is applicable. Accordingly, the Court was not willing to apply section 43 of the Contract Act unless sections 82 and 92 could be excluded. Both sections 43 and 82 address the question of contribution; however, section 43 is a general provision of the Contract Act dealing with contracts, whereas section 82 is a specific provision that applies to mortgages. Because the right to contribution in this case arises from a mortgage, the Court held that the specific provision, section 82, must prevail over the general provision, section 43, following the principle that a special law displaces a general law on the same subject. In the Court’s view, the entire law of mortgage in India, including the law of contribution that stems from a mortgage transaction, is now embodied in the Transfer of Property Act and cannot be overridden by the provisions of the Contract Act.

The Court observed that the law governing mortgages is contained in the Transfer of Property Act read together with the Civil Procedure Code and that the analysis cannot extend beyond those statutory provisions. When parties create a mortgage, they know, or are deemed to know, that the mortgage law addresses the question of contribution. That law confers rights on the mortgagor who redeems the mortgage and, in the absence of a contract to the contrary, the mortgagor shall be reimbursed in a particular way out of particular properties (1922 49 I.A. 60 at 65; 1938 Nag. I.L.R. 206 at 216; 1937 All. A.I.R. 588 at 594; 1930 57 I.A. 189). The parties are free to vary these rights and liabilities by a special contract to the contrary, but if they do not, the Court sees no reason why those provisions should be displaced in favour of Section 43 of the Contract Act, which does not deal with mortgages. Adapting the language of the Judicial Committee, the Court explained that the terms and nature of the transaction, when examined under Indian mortgage law, exclude personal liability and therefore Section 43 applies only where there is a contract to the contrary. An argument was raised that the rule is inequitable and harsh in cases such as the present one; the Court responded that the remedy lies in the parties’ own hands. They may contract out of the statutory rule, and if they do not, the statute steps in and imposes rules that must be given effect. It is not for judges to decide whether that is the best possible solution; nevertheless, the rule avoids the necessity of roving inquiries into the objects of the borrowing and the application of the funds. On an overall basis the Court considered the rule at least as good as any alternative and emphasized that the rule exists and must be given its full effect. The counsel for the plaintiff-respondent argued that the defendants were shut out from relying on Section 82 because that issue was never raised by them in the High Court and the reference to the section was made only in support of the plaintiff’s argument. The Court was not persuaded by that objection. On the facts set out by the plaintiff, the Court found that the plaintiff was entitled to contribution. The method of computation is a matter of law, and it is for the Court to apply the law to the facts and grant the plaintiff such relief as is appropriate. Turning to the factual issue of the special agreement pleaded by the defendants, the Court noted that the only evidence supporting it was the testimony of the first defendant, Kedar. According to Kedar, the agreement was oral, although the parties had contemplated putting it in writing and registering it, and he offered an explanation for the lack of a written document.

When asked whether any document had been prepared in writing, the witness answered that nothing had been done at the time, but that there was an understanding that a document would be prepared. He explained that Tarak left for Darjeeling, returned, and died shortly thereafter, so the writing could not be completed. On further questioning he affirmed that the parties had contemplated a document that would need to be registered in connection with the adjustment. The witness added that the parties regarded the matter as confidential and that only three persons were present at the meeting – Tarak, Naku and himself. It was noted that Naku, the second defendant, did not appear in the box. Consequently, the Court was required to rely on the recollection of a highly interested person who was testifying nearly thirteen years after the transaction involving an amount of about Rs. 80,000. The recollection was not of a simple event that might have become fixed in memory; rather, it concerned whether and at what stage parties achieve finality when writing is only contemplated, a matter that is difficult and complex even when preliminary documents exist. The Court referred to the decision in Shamjibhai v. Jagoo Hernchand Shah (I.L.R. 1949 Nag. 381 at 586-588, 598) to illustrate the problems that arise when the exact words used by the parties are unknown and when one must infer the intentions of a deceased person (Tarak) from the impressions of an interested witness after a long interval. The witness’s testimony was found to be hesitant, reluctant and at times evasive, and the defendants had deliberately withheld assistance that was within their power, notably the absence of Naku, the only other person present, from the box. The Court could not accept this testimony. Moreover, despite the witness’s insistence that the parties were on good terms and trusted each other, the fact remained that Tarak had felt compelled to file a suit for partition against his brothers and pursue it to conclusion, indicating that the matter could not be resolved amicably. Arguments suggesting that creditors might have prevented an amicable settlement were not wholly convincing, especially since it was admitted that Tarak had insisted on a written and registered agreement.

Tarak was not prepared to leave the situation unchanged nor to rely on the good faith of his brothers. The record shows that Tarak travelled to Calcutta approximately three months after the date on which the alleged agreement was said to have been made. It is also established that Kedar was highly eager to have such an agreement, a fact he himself affirmed in his testimony. Kedar further stated that a preliminary draft of the agreement’s terms had been placed before both of them, and that this draft had been produced before the Court. However, the draft bore no signatures or initials from either party. From these circumstances the only reasonable conclusion is that Tarak either declined to consent to the draft or had not yet reached a decision about it. The numerical figures advanced by the defendants were challenged by the plaintiff, and the Court was presented with an alternative set of figures which were, in turn, contested by the opposing side. The existence of these conflicting calculations demonstrates that the dispute is far from being simple or straightforward, contrary to the position advanced by the defendants. Consequently, Tarak’s failure to act for a period of three months, together with the fact that neither party placed their initials on the draft, indicate at a minimum a degree of hesitation on Tarak’s part. It is possible that he was awaiting advice from his counsel, or it may be that he deliberately chose to avoid any further involvement. While negotiations cannot be entirely ruled out, the broader facts do not support the witness’s suggestion that the parties had reached a final settlement. Relying on that testimony would be imprudent given the surrounding circumstances. Moreover, the defendants deliberately withheld from the Court assistance that they were obligated to provide, leading to the inference that their case was insufficiently supported by evidence. On these general grounds alone, the Court is persuaded that the alleged agreement has not been proved. Substantial argument was devoted to the rule concerning the weight to be given to the assessment of a judge who has seen and heard a witness. The Court accepts the validity of that rule but cautions, as the Judicial Committee observed in Virappa v. Periakaruppan, that it may be applied excessively. In the present matter, the trial judge gave credence to Kedar’s version not because of his demeanor but because the judge deemed the story intrinsically probable. The appellate judges were equally well placed to evaluate that assessment. If probability is the proper test, Tarak’s conduct makes it highly improbable that he ever agreed to the terms. This leaves unresolved the precise nature of the relief to which the plaintiff may be entitled. In the Court’s view, absent any contrary contract, the plaintiff’s sole remedy lies in the provisions of section 92 of the Transfer of Property Act read with section 82. The remaining question is whether the plaintiff’s suit has been framed to invoke that remedy, given that the plaintiff has claimed separate personal reliefs.

In this suit the plaintiff sought relief against the defendants. Because there was no personal covenant between the mortgagors and no contract that would contradict the claim, the specific relief the plaintiff asked for could not be granted. The plaintiff also requested a declaration of charge together with a decree under Order XXXIV of the Civil Procedure Code. A declaration of charge taken by itself was unnecessary, although Order XXXIV, rule 2(1) obliges a mortgage decree to state the amount that is due at the date of the decree. When the two requests are read together, the court concluded that, despite the plaintiff’s inelegant phrasing, the substance of the claim was for a mortgage decree limited to the sum of Rs 40,253-11-10 together with interest, to be held against each defendant. No other type of decree is available under Order XXXIV. Accordingly, even though the plaintiff did not employ the word “subrogation,” the relief he sought was essentially the same as that which a sub-rogee would obtain under the Transfer of Property Act. The court was inclined not to dismiss a claim merely on technical pleading grounds where the substantive right is evident and where no prejudice would be caused to the opposite party, notwithstanding the plaint’s clumsy articulation. Moreover, the court retained the authority to grant the plaintiff any general or alternative relief it deemed just, provided that any prejudice could be compensated through costs.

The court therefore remanded the matter to the High Court for further investigation because the parties had not agreed on the monetary figures. The High Court was to conduct (1) an enquiry into the amount paid by the plaintiff’s father to satisfy the mortgage dated 12 June 1936; (2) a calculation of interest due on that amount at the contractual rate from the date of payment up to the date of the decree; and (3) a valuation of each property that was mortgaged at the time the mortgage was created. After these figures are ascertained, the liability of each defendant must be established separately in accordance with section 82 of the Transfer of Property Act. If a defendant’s liability exceeds Rs 40,253-11-10 with interest, it should be capped at that amount plus interest. Once the appropriate sums are known, a mortgage decree for sale should be drafted in the usual form, granting each defendant the right to redeem the whole balance of the property—excluding the plaintiff’s interest—for the total amount determined, and, in case of default, limiting the liability of each property to the portion proportionately due under section 82. Regarding costs, the plaintiff had repudiated section 82 during oral arguments and based his case on section 43 of the Contract Act, without clearly pleading subrogation even as an alternative. The defendants’ case failed on the facts. Consequently, each party was ordered to bear its own costs of this appeal. Costs incurred in the lower courts and any additional costs that may arise from the further enquiry will be decided in accordance with the final outcome of the litigation and the relevant principles governing costs.

In this appeal, the Court observed that the plaintiff had not relied on Section 43 of the Contract Act and had failed to plead, even in the alternative, a clear and unmistakable case of subrogation in his plaint. The Court noted that the defendants, by contrast, had advanced a case that did not succeed on the factual record. Consequently, the Court directed that each party should bear its own costs in respect of this appeal.

The Court further stated that the costs incurred by the parties in the lower courts, as well as any additional costs that might arise from a further enquiry, would be assessed after the final determination of the litigation and would take into account every factor relevant to the question of costs. Justice Fazl Ali agreed with this assessment. The matter was ordered to be remanded, and the agents representing the parties were identified as M.S.K. Sastri for the appellant and Ganpat Rai for the respondent.