MUASMMAT JAMNADEI Vs. PANDIT LALA RAM

JUDGEMENT

(1.) The facts of this case, so far as it is necessary to set them, out for the purpose of determining the two questions which are before us in appeal, may be stated briefly as follows

(2.) On 29th November 1899 a decree was obtained by Daya Ram and others on the basis of a mortgage executed in their favour on the 23rd of May 1891. Daya Ram and others are now represented by the defendants in the present suit. The decree so obtained was a decree for sale of certain mortgaged property which was described as being a 20-biswa share in Mouza Satta. This mouza, it is admitted, was made up of 2 mahals, Mahal Bhagwati Prasad and Mahal Madangopal. After this decree had been passed, that is to say, on the 9th of September 1901, the decree--holders purchased a share in Mahal Bhagwati Prasad in satisfaction of half of the decretal debt. At this stage these decree-holders borrowed a sum of Rs. 8,000 from the plaintiff in the present suit, one Pandit Lala Ram. In order to secure the money so borrowed a mortgage-deed was executed by them in favour of Lala Ram on the 17th of December 1901. As security for the money borrowed from Lala Ram the mortgagors hypothecated two items of property. One of these was the half share in Mahal Bhagwati Prasad which has been mentioned above. The other item consisted of the outstanding interest of these decree-holders in the decree which had been obtained on the 29th of November 1899. After this mortgage had been executed, that is to say, on the 4th of September 19 2 the decree-holders of the decree of 29th November 1899 purchased a half share in the other mahal of Mouza Satta, namely, Mahal Madangopal. The effect of this purchase was to entirely satisfy the decree which was in their favour. Later on, that is to say, on the 17th of October 1902 these decree-holders sold a portion of this Mahal Madangopal to the plaintiff-mortgagee Lala Ram. The consideration for this sale was the sum of Rs. 7,500. The suit out of which this appeal has arisen was brought by Lala Ram in order to enforce his claim under the mortgage executed in his favour on the 17th of December 1901, and he sought to have the mortgage-debt satisfied by sale not only of a half share in Mahal Bhagwati Prasad but also of a half share in Mahal Madangopal. Various defences were raised to the suit which it is not necessary to set out here in detail. The lower Court has decreed the plaintiff s claim in full. Here we have been asked to determine two questions, viz., one of limitation; and another in connection with the plea raised by the defendants to the effect that the plaintiff s mortgage had to a certain extent become extinguished.

(3.) To deal first with the question of limitation, it arises in this way. The case for the appellant is that the mortgage made in favour of the plaintiff on the 17th of December 1901 was a mortgage both of moveable and immoveable property. It is contended that the hypothecation of the decree which had been obtained by the mortgagors in the year 1899 was a hypothecation of moveable property. The argument, therefore, is that any suit brought to enforce the charge against this portion of the property is governel by Article 120 of Schedule I of the Limitation Act, that is to say, the period for a suit against moveable property is six years. The point was raised in the Court of the Subordinate Judge, and his view was that for the purposes of hypothecation the decree mortgaged to the plaintiff being a mortgage decree, it ought to be treated as immoveable property, and, therefore, Article 132 of Schedule I of the Limitation Act applied, and he gave the plaintiff a period of twelve years within which to bring his suit. He remarks in his judgment that it is true that there are rulings in which it has been held that "for the purposes of registration, sale in execution of decree and jurisdiction a hypothecation is considered moveable property". But he observes that he has been unable to find a ruling as to whether for the purposes of hypothecation a hypothecation decree of this kind was moveable property or not. We haw no doubt whatever that on the authorities a decree such as these mortgagors obtained or the 29th of November 1899 is to be treated as moveable property, and we may refer in this connection to the Calcutta High Court in Gous Mahomed v. Khawas Ali Khan 23 C. 450 : 12 Ind. Dec. (N.S.) 300. and the Full Bench ruling of this Court in Jiwan Ali Beg v. Basa Mal 9 A. 108 : A. W. N. (1886 : 310 : 5 Ind. Dec (N.S.) 503. We must hold, therefore, that the decree which was hypothecated under this document executed in the plaintiff s favour on the 17th of December 1901 was moveable and not immoveable property. However, this does not settle the question which we have to deal with. We have already mentioned that after this mortgage was executed in favour of the plaintiff the decree became satisfied by the purchase made by the decree-holders of a half share in Mahal Madangopal. It follows, therefore, that we must treat this case as being one in which one security has been substituted for another. The moveable property which was hypothecated to the plaintiff under the deed of December 1901 is now represented, and has been represented since 4th September 1902, by the immoveable property consisting of a half share in Mahal Madangopal. It is impossible to doubt that the mortgagee is entitled to the benefit of this substituted security, and this being so, we have to consider why it is urged that a shorter period of limitation than that laid down in Article 132, Schedule I, of the Limitation Act should be held to apply to the present case. It is quite true, as has been argued on behalf of the appellant, that limitation for a suit based upon a hypothecation of moveable property is governed by Article 120, Schedule I, of the Limitation Act : but it seems to us that, since it has been found that the moveable property which was mortgaged or charged in the first instance has been converted into immoveable property, the mortgagee is entitled not only to the benefit of the new security, but also to the benefit of the larger period of limitation. In dealing with the question of limitation we have to take the facts *as they stand at the date on which the suit was brought. There cannot be any doubt that by operation of law the property to which the property originally mortgaged has become converted is a security for the plaintiff s money. The only remedy which was left to the plaintiff, therefore, on the date on which the suit was brought was to bring a suit for recovery of money which was charged upon immoveable property. We are of opinion, therefore, that the argument that this portion of the plaintiff s claim is barred by limitation cannot be supported. We think that the proper Article to apply is Article 132 of Schedule I of the Limitation Act. We, therefore, hold that the suit was within time.