LALA SHANTI SWARUP Vs. MUNSHI SINGH

JUDGEMENT

(1.) This appeal is brought, by certificate from the judgment of the High Court of Allahabad, dated January 23, 1959 in First Appeal No. 139 of 1946.

(2.) Some of the plaintiff-respondents and the predecessor-in-interest of other plaintiff respondents owned lands in mahal Narain Singh village Khetalpur Sahruiya. They executed a simple mortgage of this property on May 9, 1914 in favour of two persons Bansidhar and Khub Chand, for a sum of Rupees 12,000. Subsequently a sale-deed of half of this property which had been mortgaged was executed by the owners (now represented by the plaintiff-respondents) on February 9, 1920, in favour of Shanti Saran, the first appellant and three others, the remaining appellants. The consideration for the sale deed was a sum of Rs. 16,000 out of which a sum of Rs. 13,500 was left with the purchasers for payment of the amount due to the mortgagees on account of principal and interest under the mortgage, dated May 9, 1914. The purchasers entered into possession, of the property conveyed to them but neither they nor the appellants made any payment to the mortgagees who in due course brought a suit against the respondents for the recovery of the amount due to them under the mortgage. On February 4, 1937, a final mortgage decree was passed is their favour for a little over Rs. 26,000 Thereafter the respondents made an application under the U. P. Encumbered Estates Act, and by an order, dated May 22, 1939, the Special Judge apportioned the liability for the mortgage debt between the respondents and the purchasers as owners of half the mortgaged property. As a result of this apportionment the respondents and the appellants were each held to be liable for the sum of Rs. 14,307/9/6. It was further provided in this order that the respondents would be liable to pay interest at 6 per cent per annum on the amount due by them from August 1, 1933 up till September 28, 1936, and thereafter at 41/2 per cent per annum. The Collector subsequently took proceedings for liquidation of the debt and on Jan any 30, 1943 the Collector directed the execution by the respondents of a self-liquidating mortgage of three-fourths of the half share of the property of which they were the owners. That mortgage which was for the sum of Rs. 20,803/4/3 was executed on February 25, 1943, and as a result the respondents had to deliver possession of this share of the property to the mortgagees. The respondents thereafter filed the suit out of which this appeal arises for the recovery of the sum of Rs. 18,500 and interest representing the loss they had sustained owing to the failure of the appellant or of his predecessors-in-interest to discharge the original mortgage of May 9, 1914. This suit was instituted on July 30, 1943. The case of the plaintiff-respondents was that they had actually suffered loss and injury as a result of the breach of trust by the defendant appellant on February 25, 1943 when they were compelled to execute the self-liquidating mortgage and to deliver possession of the property in the proceedings for liquidation of that debt which had been decreed by the Special Judge under the U. P. Encumbered Estates Act. On behalf of the defendant-appellant it was pleaded that the suit was time-barred. The contention was that the claim of the plaintiff-respondents was a claim for compensation for breach of contract which was entered into by a registered document, so that the period of limitation was six years from the date on which the breach of contract had been committed. It was said that the breach of contract should be deemed to have been committed in the year 1920 when the defendant-appellant-undertook to pay the money to the mortgagees and failed to do so within a reasonable time. The trial Court overruled the objection of the defendant and decreed the suit. The defendant appealed to the High Court. The Division Bench which heard the appeal in the first instance referred the question of limitation to a Full Bench of five Judges which held that the suit was governed by Art. 83 read with Art. 116 of the Limitation Act and that time ran from liability February 25, 1943 which was the date upon which the respondents were compelled to execute a self-liquidating mortgage for the purpose of satisfying the mortgage debt. On receipt of the decision of the Full Bench, the Division Bench of the High Court dismissed the appeal and affirmed the judgment of the trial Court.

(3.) The question to be considered in this appeal is whether the High Court was right in taking the view that in the circumstances of the present case the suit is governed by Art. 83 read with Art. 116 of the Limitation Act and whether the terminus a quo for the limitation was February 25, 1943 which was the date upon which the respondents were compelled to execute a self-liquidating mortgage.