CHAKHAN LAL Vs. KANHAIYA LAL

JUDGEMENT

(1.) This is a defendants appeal arising out of a suit on the basis of a mortgage deed dated 25 July 1918. This appeal was originally connected with first appeal No. 187 of 1925 which has already been disposed of. It is on the paper book of this latter appeal that all the relevant documents are to be found. Chakhan Lal was a contractor carrying on business at Agra and in the course of his business he borrowed money on hundis from the present plaintiffs. On 2 October, 1917 he executed a mortgage deed as security for the payment of the amounts due from him on the hundis previously executed. The total amount due on the hundis aggregated to Rs. 10,000. It was mentioned in the deed that the old hundis would be renewed from time to time. Subsequent to this deed certain hundis were executed jointly by Chakhan Lal and his brother Balak Ram, the principal amount advanced on such hundis being Rs. 2,800. After this on 25 July 1918, a fresh mortgage deed was executed jointly by Chakhan Lal and Balak Ram, acting for themselves and as guardians of their minor sons. The consideration for this deed was the sum of Rs. 10,000 due on the previous deed of 12 October 1917 executed by Chakhan Lal, Rs. 2,800 due on the hundis executed jointly by the two brothers totalling Rs. 12,800 and a further sum of Rs. 7,200 out of which part was paid at the time and Rs. 5,400 were actually left in the hands of the creditor for subsequent payment.

(2.) As there has been some controversy as to the correct interpretation of this document it is necessary for us to recite its terms briefly. In the opening portion of the document there is a recital that although the previous deed of October 1917, was executed by Chakhan Lal alone yet Balak Ram also was liable by means of the hundis in lieu of which it was executed. The two brothers then declare that they have borrowed Rs. 20,000 and shall pay the said sum to the creditor within three years and promised that they shall continue to pay interest on the said sum after every two months without fail and further declare that for the satisfaction of the aforesaid creditor they, the executants, pledge and hypothecate in lieu of that debt the property specified in the document. Reading these clauses together there can be no doubt that initially there was a joint liability undertaken by both the brothers for the payment of the entire amount of the mortgage-debt. There is, however, a clause towards the end of the document which declares that Balak Ram had joined in the execution of the document and mortgaged his share of the property simply as surety; that the creditor should realize his money first from Chakhan Lal's share of the property, but if he failed to realize it from the said share he should realize it from the share of Balak Ram. There was a further provision that if Balak Ram would pay Rs. 10,000 together with interest his share of the property would be considered to be released. These provisions undoubtedly indicate that the liability of Balak Ram at least for the bulk of the consideration was not that of a principal but of a surety only.

(3.) The Court below has decreed the claim in full except as regards the costs of a previous suit which had been claimed by the plaintiffs. Several points are urged on behalf of the defendants in this appeal. Taking up the case of Chakhan Lal, it is contended that the consideration for the mortgage deed in suit has not been established. Stress is laid on the fact that the plaintiffs have not produced their regularly kept account books. We are, however, of opinion that this contention cannot prevail. The original hundis in lieu of which the bond was executed have been produced from the custody of the plaintiffs and they are admittedly signed by Chakhan Lal. Being negotiable instruments there is a presumption of the passing of consideration. The fact that they are still in the possession of the plaintiffs also suggests that they were not paid till the mortgage deed was executed. Lastly there is the acknowledgment by Chakhan Lal himself in the deed that the amounts due on those hundis are outstanding. Chakhan Lal has not gone into the witness box to rebut all this evidence and we find it impossible to hold that the mortgage deed was without consideration. The plaintiffs admitted, however, that Rs. 5,400 which had been left in their hands for subsequent payment were not paid. There is no point in the suggestion that Rs. 600 which were paid before the Sub-Registrar should be deducted. Even if the amount was required for the expenses of the execution and registration of the document and remuneration for legal advice, the mortgagors undertook to pay it. The payment of the sum of Rs. 1,200 evidenced by the promissory note is also fully established. There is no force therefore in the appeal preferred on behalf of Chakhan Lal.