Courtney-Terrell, C.J.The plaintiffs on 21th March 1931 sued to enforce two mortgages of an impartible Raj in the Santhal Pargannas with an area of about three laks of acres. The first mortgage, dated 2nd February 1913, was executed by Jung Bahadur Singh the then holder of the estate for Rs. 2,00,000 at 6 per cent compound interest the due date being 1st February 1925.

2. The second, dated 16th April 1917, executed by Sham Lal Singh a younger brother of Jung Bahadur, who had died since the first mortgage, was for Rs. 2,86,500 at 51/2 per cent compound interest the due date being 15th April 1927. Each of the mortgages contained a clause entitling the mortgagees to call up the whole amount if interest fell into arrears for two years in the case of the first mortgage or five years in the case of the second mortgage. Later, on 9th December 1926, Sham Lal and his younger brother executed a usufructuary mortgage to defendant 19 for Rs. 40,000 with which money certain creditors were paid off and on the 15th of the same month defendant 19 was put into possession. After a very brief period however he was dispossessed by a receiver appointed in a suit between Sham Lal and his younger brother.

3. After various civil and criminal proceedings defendant 19 was however ultimately re-instated in possession by the Court on 5th January 1931 and has been in possession since, realizing the rents and profits under his rights as usufructuary mortgagee. He has had to pay large Government demands and has also paid off other creditors and his claim amounts at present to Rs. 2,18,000. It is admitted that no interest has been paid upon either of the first two mortgages since 8th June 1919.

4. This suit was begun within three months of defendant 19 gaining possession and the plaintiffs applied for the appointment of a receiver on three grounds firstly, that the interest on the first two mortgages was in arrears secondly, that the security had now become insufficient; and, thirdly, on the ground that defendant 19, the usufructuary mortgagee in possession was committing waste by cut ting trees. The Court acceded to the application by the plaintiffs and appointed a receiver. From this order defendant 19 now appeals. A preliminary objection has been argued by the respondents to the effect that the District Judge has not in fact appointed a receiver but has merely decided that the case is one in which a receiver should be appointed and that the order therefore does not fall within the terms of Order 40, Rule 1 and Order 43, Rule 1(s), Civil P.C. Reliance has been placed upon cases reported in Upendra Nath Nag v. Bhupendra Nath Nag 9 Ind.Cas. 582, Narbada Shankar v. Kevaldas Raghunath Das 29 Ind.Cas. 504 and Ramji v. Koman Das 27 Ind.Cas. 646 in which a very narrow construction was placed upon the rule. I prefer the interpretation adopted by this Court in the case of Gobind Ram v. Ganesh Ram AIR 1922 Pat. 577 which follows a Full Bench decision of the Madras High Court in the case of P. L. S. Palaniappa Chetty v. P. L. P. P. L. Palaniappa Chetty [1917] 40 Mad 18 and expresses a more common-sense view of the matter.

5. There is no need to review the discussion afresh and I would therefore reject the preliminary objection. (His Lordship after holding that security had not diminished and that the allegations of waste were not established proceeded). Now the plaintiffs base their claims on simple mortgages but the mortgagee in the case of a simple mortgage merely has the right to sue upon the personal covenant or to bring the property to sale: he cannot satisfy his claim out of the rents and profits of the mortgaged property nor can he acquire the absolute ownership of the estate by foreclosure. In this respect he is in a position different from that of an English legal mortgagee who has a contractual right to the possession of the mortgaged property and from an equitable mortgagee who is entitled by contract to be put into the position of a legal mortgagee with the privileges appertaining to that position. By reason of his right to possession direct or indirect the Courts, on the application of a legal or equitable mortgagee, may appoint a receiver. It is urged on behalf of the plaintiffs that a simple mortgagee under Indian law is in a position analogous to that of an equitable mortgagee and that whereas a legal mortgagee cannot obtain the appointment of a receiver an equitable mortgagee could and so therefore ought a simple mortgagee. But the reason for the early refusal of the English Courts to appoint a receiver on the application of a legal mortgagee was that he already had a higher and legal right to personal possession. Since the Judicature Act and the fusion of legal and equitable jurisdictions a legal mortgagee has been conceded the right to a receiver: see Cotton, L. J., in In re Pope [1886] 17 Q.B.D. 743 and Venkata Rajagopala Surya Raw Bahadur v. K. Basavi Reddy AIR 1915 Mad. 133. The right of an equitable mortgagee to have a receiver appointed is based on his right to be put by the Court into the position of a legal mortgagee. The same difference therefore between a simple mortgagee under Indian law and a legal mortgagee under English law exists between a simple mortgagee and an equitable mortgagee.

6. On behalf of the plaintiffs reliance was placed on observations by Madhavan Nair, J,, in the case of Sri Rajah Rao Venkatakumara Mahipathi Surya Rao Bahadur Garu, the Maharaja of Pittapuram Vs. Gokuldoss Goverdhanadoss and Others, . That was the case in which there had been an equitable mortgage by deposit of title deeds and the mortgagee, at whose instance the receiver had been appointed, prayed that the receiver might be directed to deposit in Court the money realized by him from the mortgaged properties for the benefit of the mortgagee in preference to other creditors of the mortgagor. It was in that case rightly decided that the receiver having been appointed at the instance of the equitable mortgagee must hold the income of the property for the benefit of the mortgagee. The creditors argued that inasmuch as the equitable mortgagee had no immediate right to take possession or foreclose he was in the same position as a simple mortgagee and so had no right to the appointment of a receiver in his own interest. This seems to have led the learned Judge to inquire whether a simple mortgagee could obtain a receiver which was not the point before him. He confronted counsel for the creditors with a case, to be hereinafter mentioned, in the Calcutta High Court, which seemed to decide this point in the affirmative. Counsel unnecessarily conceded that the point as to a simple mortgagees right was so decided though he argued that it was wrongly so decided; whereupon the learned Judge said that if, as had been decided, a simple mortgagee could get a receiver so could an equitable mortgagee who also had no immediate right to foreclosure or sale. That is to say, he arrived at the correct conclusion but by means of a false premise. At p. 568 (of 54 Mad). he said:

Admittedly, the rights of the petitioner who is an equitable mortgagee, are the same as those of a simple mortgagee, that is, he is not entitled to the possession of the properties under his mortgage; he can realize his dues only by getting a decree for selling them.

7. But the learned Judge had I think forgotten to notice that an equitable mortgagee although he cannot like a legal mortgagee take immediate possession has a contractual right to be put by the Court into the position of a legal mortgagee and it is this fact which is the basis of his equitable right to the appointment of a receiver--an equitable right which since the Judicature Act the legal mortgagee has enjoyed and but for the technical separation of law and equity he would always have enjoyed by reason of his right to possession.

8. If the case of Rameshwar Singh v. Chuni Lal Shaha AIR 1920 Cal. 545 be examined it will be found that it does not justify the contention put forward as to the right of a simple mortgagee to the appointment of a receiver. The plaintiffs had brought a mortgage suit in the Court of the Subordinate Judge impleading the mortgagors and also the mortgagees under a later mortgage. A receiver had been appointed at the instance of the plaintiffs and in the presence and with the consent of the second mortgagees, The right of the plaintiffs to obtain such an appointment of receiver was not made the subject of appeal to the High Court who in the matter before them were merely asked to decide upon the soundness of a subsequent order by the Subordinate Judge that the receiver should pay half the profits and receipts to the second mortgagees and half to the plaintiffs. In deciding that point the Court said that neither the second mortgagee nor the mortgagor was in a position to question the appointment of the receiver. The Court says that it was "suggested" by the second mortgagees that a receiver ought not to have been appointed at the instance of a simple mortgagee and disagreed with that suggestion. But the matter does not seem to have been seriously argued and the observation by the learned Judges on this point are merely obiter dicta. In any case I am quite unable to agree with them. We have not been furnished with any case in which the right of a simple mortgagee to obtain the appointment of a receiver upon failure to pay the mortgage interest has ever been in question and directly affirmed.

9. Lastly, it is clear that under his usufructuary mortgage defendant 19 is entitled to the rents and profits of the mortgaged property and consequently, even if a receiver were appointed, he could act only in the interests of defendant 19 and not in the interests of the plaintiffs.

10. For these reasons I was in favour of the order made by us at the end of the last term allowing this appeal and setting aside the order of the District Judge and directing the plaintiffs to pay the costs of this appeal and of the Court below.

Fazl Ali, J.

11. I agree. Even assuming for the sake of argument that a receiver may be appointed in exceptional cases at the instance of one who holds a simple mortgage I am of opinion that it will be neither just nor convenient to appoint a receiver in this case. The person who is at present in possession of the properties is not the mortgagor but a usufructuary mortgagee. There is no reliable evidence whatsoever that he has committed or has been committing any acts of waste or that the property it being mismanaged. The learned Subordinate Judge seems to have been of the opinion that the security in this case is insufficient, but in coming to this conclusion he proceeded on the assumption that the net annual income of the property mortgaged was a little over Rupees 46,000. It has however been pointed out to us that according to the current settlement proceedings the income has increased by almost 50 per cent. The question of interest is not a serious one in this case, because the rule of damdupat applies. The suit was instituted in March 1931 and being now over a year old must be ripe for hearing. It seems likely therefore that the suit will be decided before long and in these circumstances there does not appear to me any particular necessity for altering the status quo.