MUHAMMAD HUSSAIN Vs. SANWAL DAS

JUDGEMENT

(1.) The facts of this case are as follows : On 20 February 1902, Mohammad Raziuddin executed a mortgage-deed in favour of the respondents for Rs. 1,000, carrying interest at rupee 1-80 per cent per mensem "promising to repay the same in eight years." The strictly literal translation of the vernacular words, though not grammatical, would be "on the promise of eight years payment." The deed provided that if the interest for one complete year remains unpaid the creditors shall have power to recover the interest and shall also be at liberty to recover the principal and interest without having any regard "for the stipulated period." On 8 September 1903 another mortgage deed was executed by the same person in favour of the same mortgagees for Rs. 700 at the same rate of interest "promising to pay off the amount in eight years." There was a stipulation that if the interest and compound interest were not paid for one year the creditors shall, after the expiry of one year, have power to recover the principal amount with interest and compound interest "without waiting for the expiry of the stipulated period." There was an additional clause in the second mortgage-deed in the following terms: Whenever I the executant shall pay any amount the creditors aforesaid shall receive it without any objection and shall, after setting it off against the interest, credit the balance towards the principal, and the interest will be reduced in proportion to the amount paid.

(2.) Admittedly interest was not paid and there were defaults at the expiry of one year on account of both these mortgage-deeds. There was an acknowledgment of both these mortgage debts on 3 March 1906, which gave a fresh start for the purpose of limitation. One consolidated suit was filed on 22 February, 1916, to recover the amounts due on both these documents and in 1917 the claim was decreed. On 20 February 1929, after all the mortgaged properties had been sold, there still remained a balance of over Rs. 2,000 to be realized. The mortgagees accordingly filed an application on 21 August 1929, under Order 34, Rule 6 for a personal decree against the mortgagors. The mortgagors objected to this application on the ground that the personal remedy was barred by time. The Court, below has disallowed this plea. The mortgagors have appealed to this Court. The Bench before which the case came up for disposal, on these facts, referred the following question to the Full Bench: Whether in the circumstances mentioned above limitation for a decree under Order 34, Rule 6 commented to ran after the expiry of one year within which the mortgagor made continued default of payment; of interest, or whether, it commenced to run after the expiry of eight Years terra stipulated in the deed.

(3.) Before 1932 the view which prevailed in this Court was that the limitation being to run against a mortgagee from the date of the first default which entitles him to sue for the whole amount. It is not necessary to refer to earlier cases. But in Daya Din V/s. Jhumman Lal A.I.R. 1915 All. 189, the majority of the Full Bench held that money becomes "due" within the meaning of Art. 132 as soon as it can be legally demanded and recovered by suit and the mortgagor can no longer plead that the suit is premature. The view of the Full Bench was followed by a larger Full Bench in Shib Dayal V/s. Meharban A.I.R. 1923 All. 1. In this case it was laid down that the question whether the mortgagee is bound to sue or not and whether he does at once sue or not was wholly irrelevant to the issue; so long as he can sue even though he does not choose to sue, the money has become due. The Full Bench in Shib Dayal's case A.I.R. 1923 All. 1 then considered the question of limitation with reference to the personal liability and came to the conclusion that the starting point of limitation should be the same for the recovery of the amount by sale of the property and for recovery of it as simple debt, as the cause of action for the enforcement o both the reliefs was one and the same. They held that Art. 80 read with Art. 116, Limitation Act, was the appropriate Art. for money claim under a registered bond and held that the expression "becomes payable" was very much the same thing as the words "become due," and accordingly the cause of action being the same the periods of limitation for both would begin to run simultaneously and the claim for a personal decree would be barred after six years from the first default. The Lahore High Court and Oudh Chief Court took the same view as was taken in Allahabad, but the Madras and Patna High Courts took a different view. The Oudh Chief Court appears to have gone further and held that even the mortgagor's right to redeem can accrue as soon as the default is made. This could be supported only on the assumption that the stipulated period was a "term of years or the date of default, whichever is the earlier." Although the view in this Court was that the money became duo within the meaning of Art. 132 go as to make the period of limitation for a suit for sale run from the date of the default, it was never held that the mortgagor also can by his own default entitle himself to redeem before the expiry of the stipulated period. The mortgagor's suit for redemption would be governed by Art. 148, Limitation Act, the words in the third column of which were different from the words in the third column of Art. 132. His right to redeem or recover possession cannot accrue contrary to a special contract fixing a period of time within which he could not redeem. Pancham V/s. Ansar Husain A.I.R. 1926 P.C. 85, was a case in which there was somewhat similar clause giving power to the mortgagee to recover the whole amount in case of default of payment of interest. Their Lordships of the Privy Council were able to dispose of the case on a different ground but Lord Blanesburgh, who delivered the judgment of their Lordships observed that this High Court applying the previous decision in Gaya Din's case A.I.R. 1915 All. 189 and other cases, had held that a single delimit on the part of the mortgagors without without any act of election, cancellation or other form of response or acceptance on the part of the mortgagees, and even, it would appear against their desire, operates eo instanti, to make the money scoured by the mortgage become due so that all right of action in respect of the security is finally barred 12 years later.... All this the High Court held, notwithstanding that the mortgage is for a term certain, a provision which may be as much for the benefit of the mortgagees as for the mortgagors, and notwithstanding that the proviso is exclusively for the benefit of the mortgagees.