SHEORAM SINGH Vs. BABU SINGH

JUDGEMENT

(1.) The main question which has been argued in a very interesting discussion in this appeal is the question which article of the Limitation Act applies to this mortgage. The learned Judge in the Court below has applied Art. 132. If this is a mortgage by conditional sale, that would be right. We are of opinion that it is a mortgage by conditional sale. In the first place the parties so described it. That would not be conclusive, but the vernacular word employed is always used as meaning mortgage by conditional sale, and the general form of the document corresponds to such mortgages as drawn in these Provinces. In the second place, there is a provision that if default is made in payment of interest, at the time of such default the mortgage-deed shall be treated as a sale-deed. In other words, it is ostensibly a sale, or perhaps it would be more accurate to describe it as a bargain and sale to be defeated by a condition subsequent, namely, the payment of interest. But if default is made in the payment of interest, then it becomes a real sale, and the definition in Section 58, T.P. Act, provides that where a mortgagor ostensibly sells on condition that on default of payment of the mortgage money on a certain date the sale shall become absolute, or that on payment being made the sale shall become void, such transaction is called a mortgage by conditional sale. Thirdly, the plaintiffs by their plaint did not ask for foreclosure or sale, or for a sale at all, but sued for the money or for foreclosure, clearly treating their rights as governed by the law applicable to a mortgage by conditional sale in respect of which a decree for sale is prohibited by Section 67.

(2.) We are asked, on the other hand, to hold that Art. 147 applies on the ground that this was not really a mortgage by conditional sale, and (although not an English mortgage), a mortgage in respect of which the mortgagee might sue for foreclosure or sale, and we were asked to apply Art. 147 to such a document in spite of the judgment of the Privy Council in the case of Vasudeva Mudaliar v. Srinivasa Pillai (1907) 30 Mad 426. We are unable to do so. We regard the judgment of the Privy Council in that matter as peremptory and binding upon us. Whether or not their Lordships observations wore necessary for the disposal of the case, they were considered observations delivered for the express purpose of setting at rest a question which was much controverted at the time in India, and they held that Art. 147 was applicable only to the class of mortgage generally known and defined by the Transfer of Property Act as an English mortgage. They give what they described as preponderating reasons for adopting this view. The second was that there was a presumption that the Legislature, when it repeated in a later Act an expression which had obtained a settled meaning by judicial construction, intended the words to mean what they meant before. That reason applies with even greater force to their Lordships view at the present day than it did then. The judgment was delivered in 1907. The provisions of the Transfer of Property Act were re-enacted so far as they apply to remedies in respect of mortgages in the first schedule to the Civil Procedure Code of 1905, and Art 147, Lim. Act, has been re-enacted in the Limitation Act of 1908 without change, and therefore bearing the narrower interpretation given to it by the judgment of the Privy Council to which we have referred.

(3.) We hold therefore that Art. 132 applies to this case. It follows that the claim is barred unless the plaintiffs establish payment of interest sufficient to take the case out of the mischief of the statute. We are bound in this Court, where the law has been finally settled until it is reversed elsewhere, to hold the view that in a mortgage in this form the statute begins to run from the time when default is made in payment of an instalment of interest, where the mortgagee is given the right on such default to sue for the whole amount. The question of the payment of interest is a question of fact which the learned Judge has disposed of in an emphatic judgment, It is not necessary to enter into the details of this question.