AMRATLAL AMARCHAND Vs. MULJI SAVCHAND

JUDGEMENT

(1.) THIS is an appeal from the judgment of Mr. Justice Coyajee. It arises out of mortgage transactions. On May 24, 1935, the Allahabad Bank, Limited, filed Suit No. 812 of 1935 to enforce the first mortgage on the Ballard Estate property executed by defendants Nos. 1 to 8 in their favour. Defendants No. 11 were the second mortgagees. Defendants Nos. 12 and 13 were the third mortgagees of that property, along wifti another property al Vikhroli, which was also their security for the amount advanced by them td the mortgagors. The third mortgage in favour of defendants Nos. 12 and 13 was dated April 10, 1030. The amount became due at the end of two years from the date of the mortgage. Defendants Nos. 12 and 13 filed their written statement on August 27, 1935. In that suit according to Order XXXIV, Rule 4, of the Civil Procedure Code, 1908, a decree was passed in accordance with Form No. 9 of Appendix D on September 10, 1937. It was a consent decree by which the amounts were declared, instead of accounts being taken by the Commissioner. The decree was drawn up on those lines. The property was sold on March 23, 1938, and the Commissioner's certificate was issued on April 9, 1938. Defendants Nos. 12 and 13 took out a notice of motion for a personal decree against the mortgagors on June 28, 1943. Appeal No. 2 of 1944 is from Suit 918 of 1935. That related to the Vikhroli property of which the plaintiffs in that suit were the first mortgagees. The firm of Messrs. Amarchand Madhavji & Co. were the mortgagors. Defendant No. 2 was the second mortgagee while defendants Nos. 3 and 4 (who are the same as defendants Nos. 12 and 13 in Suit 812 of 1935) were the third mortgagees. I have already pointed out that their claim arose out of one mortgage transaction which covered both" the Ballard Estate property and the Vikhroli property. In that suit defendants Nos. 3 and 4 filed their written statement on November 9, 1936. The preliminary mortgage decree was passed on November 18, 1936, in accordance with Form No. 9 of Appendix D to the Civil Procedure Code. The decree absolute was passed on April 13, 1938. The Vikhroli property was sold in January, 1943. Defendants Nos. 3 and 4 took out a notice of motion on July 17, 1943, for a personal decree.

(2.) THE mortgagors are the appellants in both the appeals. THEir contention is that the application for a personal decree is time-barred. It is contended that in neither of these two suits the third mortgagees had filed a counterclaim. In their written statement they had not asked for a personal decree. In fact in paragraph 5 of their written statement in suit No. 812 of 14)35 they had reserved their right to take such steps as they might be advised against the mortgagors for the. recovery of such deficiency. In my opinion this point has no substance because at the time of passing the consent decree the parties could, instead of incurring the cost of a formal amendment, have very well proceeded on the footing that the necessary amendment was made and the rights of the parties ascertained on that footing. THE Court has not now to proceed on what was contained in the written statement but on what was contained in the preliminary and final decrees under which the rights of the parties have been declared and ascertained. THE contention of the appellants is that in the absence of a suit or a counterclaim by the third mortgagees, their right to apply for a personal decree arises only under the consent decree, and as more than five years had expired since then their right was time-barred under Article 181 of the Indian Limitation Act. It was contended, in the alternative, that if the rights of the parties are only under the mortgage, the right of these mortgagees to a personal decree was time-barred because no suit was filed by those mortgagees till 1943, and the liberty to apply lor a personal decree, contained in the final decree, did not give rise to any new right, but left the parties to put forth their claim for a personal decree under their original mortgage. If on the date of the application the right to obtain a decree under the personal covenant was barred, the mortgagees were not entitled to such a decree. In my opinion, these contentions are unsound.

(3.) THE contention that under the consent decree the rights of the parties were crystallised and the application for a personal decree under Article 181 of the Indian Limitation Act must be made within three years after the deficit was ascertained, is also unsound. THE consent decree contains a narration of the amounts due and does not cut down the mortgagees' rights under the mortgage. THE mortgagees' right to enforce the personal covenant, which was in their mortgage, is not taken away by the consent decree. THE terms of the consent decree in this suit do not lend support to the argument that the right had lapsed. Under Article 181 of the Indian Limitation Act the time of three years begins to run from the date the right to apply accrues to the applicant. THE fact that, after taking credit for what was received under the sale of the Ballard Estate property, the balance payable under the mortgage was ascertained in 1938, gave no right to the mortgagees to apply for a personal decree, because they would be immediately faced with the contention that the other property, namely, the Vikhroli property which was also their security, remained to be sold, and till that was realized it cannot be stated that under the mortgage there was a deficit. In my opinion, therefore, the alternative contention that because of the consent decree defendants Nos. 12 and 13 had to make their application within three years of the Commissioner's certificate dated April 9, 1938, on the sale of the Ballard Estate property also fails. Under Article 181 the time to make the application did not begin to run till the Commissioner issued his certificate in January, 1943, on the sale of . the Vikhroli property. THE application is, therefore, not barred under that article.