Rudra Pratap v Badri Narain
Rule established
Mortgagee in possession must account for rents actually received AND rents that could have been received with due diligence
Facts
- Mortgagee in possession let the property remain vacant for extended periods
- On redemption, mortgagor demanded accounting including notional rent for vacant periods
- Mortgagee argued liability only for rent actually received
Issue
- Whether a mortgagee in possession is liable for notional rent (rent that could have been earned with due diligence).
Held
- Under S.76, the mortgagee must account for what they MIGHT have received but for wilful default or gross negligence. Letting property remain vacant when it could have been rented = wilful default.
Ratio Decidendi
S.76 imposes a fiduciary duty. The mortgagee holds the property as security, not as a gift. They must manage it as a prudent person would their own property. Failing to earn income that prudent management would yield is accountable neglect.
How to use it in an exam
Cite for S.76 accounting duty. Key line: "Mortgagee must account for notional rent: what would have been earned with due diligence."
Source
Source: AIR 1951 Allahabad 456
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.
Cited in study notes
Rights and Liabilities of MortgageeS.76: accounting for rents; wilful default