JAWAHIR MAL Vs. INDOMATI

JUDGEMENT

(1.) This appeal arises out of a suit in which the plaintiffs sought to recover a sum of Rs. 6,000 upon foot of a document, dated the 12th of May, 1884. Rs. 7,294 is said to be due, but only Rs. 6,000 is claimed. Extracts of material parts of the document have been set forth in the judgment of the learned Subordinate Judge. The document itself is somewhat incorrectly translated at page 4 of the appellant s book. It commences by reciting that the executant had borrowed Rs. 1,000, and then proceeds to refer to certain property. Then there is a covenant to repay the amount with interest at the rate of 2 per cent, per mensem in 7 months, and that if the executant failed to pay the amount at the stipulated period, then, in future, interest should be paid at the rate of 2 per cent, per mensem. Finally, there is a Clause in which the executant undertakes that until repayment of the amount he will not transfer the property by sale, mortgage, gift or in any other way. There is in no part of the document any use of the word "hypothecate" or anything equivalent thereto, but it is quite possible that there was an accidental omission to insert some such word. The defendants pleaded a number of defences, including a plea that the document was not sufficient to constitute a hypothecation of the property. There was another plea that the property had been purchased by the contesting defendants at sale on a foot of a prior mortgage None of these matters have been gone into by the court below, which held the document was not a mortgage, and that, therefore, the suit was barred by limitation, even if the document was sufficient to operate as a charge within the meaning of Section 100 of the Transfer of Property Act

(2.) As already pointed out, the document was executed on the 12th of May, 1884. No step of any kind has been taken on foot of the document until the institution of present suit, and while the court below has not gone into the question of the priority of the claim of the answering defendants there can be no doubt they purchased at auction sale, and the plaintiffs have waited until the debt (if not discharged) has become greater than the value of the property. In my opinion, having regard to the words used in the document, we ought to hold that it was the intention of the parties to the deed to make the property therein mentioned security for a loan of Rs. 1,000 and interest. The important question is whether or not it constituted a "mortgage." If the document is not a mortgage within the meaning of Section 58 of the Transfer of Property Act, then the present suit is barred, and I confess I have not much sympathy with the plaintiffs, who did not institute their suit until the very last day of limitation, taking advantage of the period of grace allowed by the Limitation Act of 1908. I have already pointed out that, whether by accident or otherwise, there is an absence of any word equivalent to the word " hypothecate " or "mortgage." There is also no reference to any right of sale in the mortgagee. There is merely the mention of the property, a covenant to pay the principal, and a covenant not to alienate the property so long as the principal and interest remain unpaid. Section 58 of the Transfer of Property Act defines a mortgage as being " a transfer of an interest in specific immovable property for the purpose of securing the payment of money, etc." "Mortgagor" is defined as being the person who so transfers an interest, and "mortgagee" is defined as being the person to whom that interest is transferred. Clause (b) defines a simple mortgage in the following words: "Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage money, and agrees expressly or impliedly, that in the event of his failure to pay according to the contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee." It seems to me that the meaning of the expression "mortgagor" and "mortgagee" in Clause (b) of Section 58 must be in accordance with the definition of "mortgagor" and "mortgagee" given in the very same Section of the Act. Now I consider in the present case that there was no "transfer of any interest" for the purpose of securing the loan by Chaudhri Raj Kumar, the executant of the document sued upon in the property mentioned in the deed. If this be so, the persons in whose favour the document was executed and their representatives are not "simple mortgagees" and the document sued on is not a "mortgage" within the meaning of Clause (b) of Section 58. Section 100 of the Transfer of Property Act provides as follows: " Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 and all the provisions hereinbefore contained as to a mortgagee instituting a suit for the sale of the mortgaged property shall, so far as may be, apply to the person having such charge." I am quite prepared to hold from consideration of the terms of the document itself that the parties did intend to make the property security for the payment of Rs. 1,000, and interest, and if they had brought their suit within twelve years from the money becoming due, I would be prepared to hold that the plaintiffs were entitled to recover the amount by sale of the property if there was no other defence.

(3.) This was all that was held in the case of Martin v. Pursram (1) N. W. P. H. C. Rep. 1867 p. 124. which is no authority as to what constitutes a simple mortgage as defined by Section 58 of the Transfer of Property Act.