MISIR GIRDHARI LAL Vs. GOBIND RAM

JUDGEMENT

(1.) This is a first appeal from a decree of the learned Subordinate Judge of Muttra on the basis of a mortgage-deed dated the 5 of November 1906. It appears that the defendant No. 1 Girdhari Lal had been dealing with the plaintiff's firm ever since the early eighties. The accounts between the plaintiff's firm and Girdhari Lal were cast up in June 1891, when a mortgage deed was given to the plaintiff's firm by Girdhari Lal for Rs 2,500. In 1906 a suit was brought on foot of the bond of the 13 Jane 1891 for recovery of the money due upon it. At the time of the institution of the suit one of the sons of the defendant, namely Manohar Lal, had been born and was alive. There was a compromise between the parties on the 7th of November 1906, under which a fresh bond was given to the plaintiff on the 5th of November 1906. After the completion of the compromise the suit was withdrawn by the plaintiff. Subsequently two more sons were born to Girdhari Lal, namely, Dwarka Prasad and Ram Das. On the 22 January, 1917 the suit out of which this appeal has arisen was filed by the plaintiff for the recovery of Rs. 17,920-11-8 due upon the mortgage deed of the 5 of November 1906. The claim was brought against Girdhari Lal and his three sons. All the defendants resisted the suit and urged various pleas. The defence with which we are concerned in this appeal was advanced on behalf of the sons, to the effect that the loan secured by the deed of the 5 of November 1906 was not taken by Girdhari Lal for the benefit of the family nor was there any legal necessity for the loan. The question of legal necessity was raised by the defence in two ways. First, it was urged that the deed of the 5 of November 1906 was given in lieu of the deed of the 13 of June 1891 and that the debt due upon the deed of say had already become barred in 1905. A father hypothecating a joint family property in lieu of a time barred debt cannot be said to have hypothecated the property for legal necessity. Secondly, it was urged that the debt secured by the deed of 1891 was contracted at a time when Girdhari Lal had a son already alive. The name of that son was Madhusudan, who was born on the 13 of January 1887 and who died in 1895. As Madhusudan was alive at the time the deed of 1891 was given, it was for the plaintiff to see that the money advanced by him was advanced for legal necessity. The death of Madhusudan in 1895 would not in any way affect the question of legal necessity, for prior to his death Manohar Lal had already been born. If the prior debt of 1891 is to be considered as not warranted by legal necessity, the death of Madhusudan would not affect the question at all. The learned Subordinate Judge, after considering the evidence in the case, was of opinion that the deed of the 5 of November 1906 was given for legal necessity; the claim was accordingly decreed.

(2.) In appeal before us the same two points are urged by the learned Counsel for the defendants-appellants. It is argued by him that the mortgage of 1891 was already barred at the time that the deed now in suit was given by Girdhari Lal. Their Lordships of the Privy Council have held in the case of Shamu Patter V/s. Abdul Kadir 16 Ind. Cas. 250 : 35 M. 607 : 16 C.W.N. 1009 : 23 M.L.J. 321 : 12 M.L.T. 338 : (1912) M.W.N. 935 : 10 A.L.J. 259 : 14 Bom. L.R. 1034 : 16 C.L.J. 596 : 39 I.A. 218 (P.C.) that in the case of a simple mortgage the time within which a mortgagee can are for the recovery of money is 12 years The period of limitation, therefore, expired in respect of the bond of 1891 in 1903. The grant by Girdhari Lal of a fresh deed to the plaintiff in respect of a time-barred debt would not under the Hindu Law bind his Bona or the ancestral property. In order to appreciate and determine the question raised by the learned Council for the defendants- appellants, we hive to refer to the terms of the deed of the 13 of June 1891. We find the following covenant in the Bail deed: "If I fail to pay the whole or part of interest on the aforesaid amount every six months, then at the close of a year the said interest shall be treated as principal and I shall pay interest at the rate fixed above on that amount also. Till payment in full of the debt due under this bond this mode of paying interest shall remain in force. In the event of nonpayment of interest for two consecutive periods of six months, that is, for the entire year, the said creditors have power either to benefit themselves by the condition regarding the compound interest as herein mentioned or to realise in any way they like, without waiting for expiry of the stipulated period fixed for payment of the principal, the whole of the principal and interest in a lump sum or only the interest which under the terms of this bond might be due to them by that time from me as well as by the sale of the hypothecated property mentioned below and also from other moveable and immoveable property of mine, and I shill have no objection whatever."

(3.) Now it is quite apparent from the terms of this covenant that the creditor was given three options in case of default in the payment of two consecutive instalments of interest, namely, either to sue for the whole, that in the principal and interest, or to 1 the interest mount up or to sue for interest only. If the creditor did not choose to exercise his option of suing for that whole amount due on default of the payment of two consecutive instalments of interest by the debtor, it cannot be said that the time began to run from such abstention. However, the learned Counsel for the appellants contends to the contrary, He has referred as to the case of Gaya Din V/s. Jhuman Lal 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510. lie argues that the case of Gayadin 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510, is on ail fours with the present case and that in the case of Gayadin 28 Ind. Cas. 910 : 37 A. 400 : 13 A.L.J. 510, it was decided by a Full Bench of this Court that where an option is given to a creditor, that it, on the happening of a certain event, to either sue for the whole amount, principal and interest included, or for interest only, and the creditor omits to exercise his option and sue for the whole amount rule, time will begin to run from the date of the omission to sue for the whole amount. We have carefully considered the case of Gayadin and, in our opinion the facts of that case are quite dissimilar to the facts of the present case. In that case no option, as far as we can see from the recital of the terms of the bond given therein, was given to the creditor. The latter had to sue on the happening of a certain event. He failed to do so and the Full Bench of this Court held that time began to run against him from the date of his omission to sue. It is true that in that case at the end of the bond it was recited that in case the creditor did not sue, are he was entitled to, on default in the payment of interest, the interest will go on running and mounting up in favour of the creditor up to the date of payment. That is quite a different covenant to that given in the deed before us. In the deed of 1891 it is clearly stated that the creditor has three options which we have already mentioned above. The plaintiff seems to have exercised one of the options, tamely, to let the interest mount up at compound rate, and it was due to that fact that Re 2,510 mounted up to more than Rs. 10.000 at the time the deed in suit was given. We, therefore, hold that when the suit was brought by the plaintiff in 1906 in the mon August, or when the compromise was entered into and the deed of the 5 of November 1906 was obtained from the defendant No. 1, the debt due on the deed of 1891 had not become barred by time, The argument for the defendants-appellants that tin mortgage-deed of 1906 was given in lieu of a time-barred debt, therefore, falls to the ground.