MUHAMMAD HAFIZ Vs. MIRZA MUHAMMAD ZAKARIYA

JUDGEMENT

(1.) In this appeal their Lordships have not had the advantage of hearing counsel for the respondents, but owing to the full and able argument of Mr. Hyam they have been placed in complete possession of the facts.

(2.) The appeal arises out of a mortgage suit. The appellants and the second, third and fourth respondents represent together the mortgagee. The first respondent was himself one of the mortgagors and represents the other. The mortgage deed in question was executed on the 14 September, 1910, and was a simple mortgage but it took an unusual form. It created security for the repayment to the mortgagees of Rs. 14,000 principal and interest at the rate of eight annas per cent, per month, it then provided by Clause 2 that the interest should be paid on the bond as each month went by, and that if the interest was not paid for six months, the creditor should be competent to realise only the unpaid amount of interest due to him, or the amount of principal and interest both by bringing a suit in Court without waiting for the expiration of the time fixed, and that the mortgagors should take no objection to such proceedings. The time fixed was that mentioned in Clause 7, which provided that if the amount secured by the bond, with interest, should not be paid after the expiration of three years, the creditor should be entitled to realise by bringing a suit for the whole of the amount of the principal and interest, together with other incidental expenses, and again the clause concluded by provision that the mortgagors should have no objection, and, if they took objection to such proceedings, it should be regarded as false.

(3.) Three years elapsed after the deed had been executed and no interest was paid, with the result that in April, 1914, the mortgagee had the power, so far as the terms of the deed were concerned, either to bring an action for the purpose of realising the security in order to obtain repayment of the full principal money and the interest, or simply of the interest alone. He selected the latter course and, on the 16 April, 1914, he instituted a suit which set out, with perfect fairness and clearness, the provisions of the bond and the fact that he had elected to pursue the remedies that the bond gave him in respect only of the interest that was then due. The amount of that interest was Rs. 3,010 and in respect of that sum, and no more, he paid the Court fees upon the plaint. The learned judge before whom this suit was brought made a decree on the 11 August, 1914, granting the relief that was claimed, but he appears to have overlooked the peculiar character of the mortgage, for he made a decree which, upon the face of it, was not the decree that the plaintiff had asked for, and certainly not the decree to which the defendants could, on any hypothesis, be entitled. What he did was this: He declared that the amount due to the morgagee for principal, interest and costs was Rs 3,270-12-0, a statement that the consideration of the plaint itself would have shown to be manifestly inaccurate, for it was perfectly plain from the proceedings that the amount of Rs. 3,010 was the amount claimed as due and this was for interest alone and did not include one single rupee in respect of the principal, which still remained at the sum of Rs. 14,000, He then provided that if the defendant paid into Court the amount so declared to be due, which was the amount of the interest and costs, on or before the 11 February 1915, the mortgagees should deliver up the document relating to the property and, if required, re-transfer it to the defendant free from the mortgage and from all incumbrances created by the mortgagees or any persons claiming under them. Paragraph 2 of the decree proceeded upon the same footing, and provided that if the money was not paid in there should be a sale, out of the money realised the claim for Rs. 3,270 should be satisfied, and after that the balance of the money in Court should be paid out to the mortgagor.