BABAMIYA MOHIDIN SHAKKAR Vs. JEHANGIR DINSHAW BELGAUMWALLA

JUDGEMENT

(1.) PLAINTIFFS have filed this suit as mortgagors against the defendant who is the present mortgagee of an immoveable property situate at Chimna Butcher Street, Bombay, to restrain the defendant by an order and injunction of the Court from selling the property on the ground that the proposed sale which was advertised for September 18 last was wrongful and not in accordance with the terms of the mortgage. The original mortgage deed dated May 31, 1935, was made between plaintiff No.1 as the sole executor of his father's will along with plaintiffs Nos. 1 and 2 and one Bai Zohrabai, the heirs of plaintiff No.1's father, as mortgagors on the one hand and Rahim Premji Parpia and Habib Rahim Parpia as mortgagees to secure repayment of the sum of Rs. 7,500 lent and advanced by the mortgagees. Zohrabai died about March 3, 1936, and the plaintiffs are her only heirs and legal representatives according to the Mahomedan law. By an indenture of transfer of mortgage dated January 22, 1940, the mortgage debt, which then amounted to Rs. 11,200, was transferred by the original mortgagees to the defendant, who was to have under the deed of transfer the full benefit of the covenants, power of sale and other powers and provisions contained in the mortgage deed for securing the repayment of the sum of Rs. 11,200. The due date for repayment was extended under the deed of transfer to January 22, 1941, with a further option to the mortgagors to extend the same to January 22, 1942, provided they paid interest regularly and otherwise observed and performed all the provisions and conditions of the mortgage. The rate of interest agreed upon was annas ten per cent, per month. After the deed of transfer the plaintiffs paid to the defendant Rs. 70 for interest on February 20, 1940, for the month ending February 19, and on May 13, 1940, they paid a further sum of Rs. 70 for interest for the month ending March 19, 1940. Thereafter the plaintiffs in spite of demands from the defendant failed to pay the interest agreed upon.

(2.) IT is contended on behalf of the plaintiffs that the defendant was not entitled to have the property sold on two grounds: (1): that even if the due date of payment which was January 22, 1941, had been, under the circumstances contemplated by a clause in the mortgage deed which I will hereafter refer to, accelerated, the defendant had not intimated to the plaintiffs the exercise, of his option to call in the mortgage amount, and (2) because no notice of sale in writing as required by Section 69(2) (a) of the Transfer of Property Act, and as also provided for in the mortgage deed, was given to the plaintiffs. Defendant on the other hand contends that the plaintiffs were not entitled to any intimation of the exercise of the option. In paragraph 13 of his written statement he further contended that he was entitled to put up the mortgaged property for sale without the notice in writing required by Section 69, but that contention was given up at the hearing by his counsel. Defendant also contends in paragraph 16 of his written statement that the plaintiffs are not entitled to claim any relief in this suit by reason of the order passed by the Court on the notice of motion for interim injunction on September 18 last.

(3.) IT is not in dispute that interest was "in arrears for three months and unpaid. IT is also not disputed that the plaintiffs had failed to insure the mortgaged property and to pay the insurance premium. Under the circumstances the due date which was January 22, 1941, was accelerated, and the option to call in his moneys and all the rights of the mortgagee accrued to him. The mortgagee could under the terms of the mortgage deed apply for a receiver of the mortgaged property, or enter into possession, or file a suit for sale, or by exercising the option reserved to him he could proceed to realise his mortgage debt without filing a suit. IT has been pointed out by the Privy Council in Lasa Din v. Gulab Kunwar (1932) L.R. 59 I.A. 376, 384, s.c. 34 Bom. L.R. 1600, that a proviso or clause in the mortgage deed of the nature which I have referred to above is "exclusively for the benefit of the mortgagees "and" purports to give them an option either to enforce their security at once, or if the security is ample, to stand by their investment for the full term of the mortgage." In an earlier Privy Council case, Panckam v. Ansar Husain 1926) L.R. 53 I.A. 187, the question was one of limitation under Article 132 of the Limitation Act for an action by a mortgagee upon a breach of the clause which gave the mortgagee the power to enforce the mortgage by sale even if the time for repayment had not arrived. IT was pointed out by Lord Blanesburgh at p. 194 that such a default on the part of the mortgagor gave to the mortgagee "a right by appropriate action to make the mortgage moneys) immediately due". As pointed out by Sir Dinshah Mulla in his Commentary on the Transfer of Property Act, 2nd edn., at p. 419, such appropriate action may be by a notice of demand as in Raghubir Singh Raja v. Kunwar Rajendra Bahadur Singh (1933) I.L.R. 8 Luck. 488, or by the mere filing of a suit as in Abdul Rahman v. Sheo Dayal. 4 (1933) I.L.R. 56 All. 496. In order that the mortgage moneys may become immediately payable on the exercise of the mortgagee's option there must be an action indicating to the mortgagor the exercise of that option, so as to enable the mortgagor to realise his position and save his equity of redemption if possible.