MAHARAJ BAHADUR SINGH Vs. ABDUL MAJID

JUDGEMENT

(1.) These two appeals arise in connexion with two mortgage suits. The mortgages were in the nature of instalment bonds, and provided for repayment of the sums borrowed in annual instalments spread over a number of years, subject to a covenant that if there was default - a single default in one case and two consecutive defaults in the other - the mortgagee would be entitled to sue for enforcement of payment of the entire amounts then due. The mortgages were registered documents-one was executed on 29 September 1917 and the other on 6th October 1917. The period of repayment in the first case was from the Bengalee year 1324 to 1331, and in the other from 1324 to 1332. The last instalment according to the bonds would be due in one case in Ealgoon 1331 corresponding to March 1925, and the other in Falgoon 1332 corresponding to March 1926. If there was default in respect of either mortgage, the mortgagee became entitled to sue on the bond on the happening of such default, but he chose to wait and did not, in fact, institute the suits till 28 September 1929. Both the suits were decreed in the usual course, the preliminary decree being passed in one case on 12 May 1930, and in the other on 19 August 1931, while the dates of the final decrees were 28th April 1931 and 5 October 1931 respectively. The decrees were decrees for sale, and in due course the mortgaged properties were brought to sale. The sale proceeds were however wholly inadequate to satisfy the dues under the mortgage decrees. There was an unsatisfied balance of over Rs. 6000 in one case, and of over Rs. 4800 in the other, including interest. The decree-holder accordingly applied for a personal decree in each case for recovery of the balance due under the provisions of Order 34, Rule 6, Civil P.C. The sole question in these two -appeals is whether or not the balance was "legally recoverable" from the mortgagors within the meaning of this Rule.

(2.) There is and can be no question that so far as the mortgage suits are concerned they were within time, the Art. applicable being Art. 132, Limitation Act. The fact that the mortgage bonds provided that the suit might be brought on the happening of a default would not make the mortgage money any the less due on the expiry of the period of repayment. Whatever doubt there might have been on this question, must now be taken to be set at rest by the decision of the Judicial Committee in Lasa Din V/s. Mt. Gulab Kunwar . Nor is there any question that the application for a personal decree under Order 34, Rule 6, was within time, having been made within three years from the date of the sale, that being the date when the right to apply accrued within the meaning of Art. 181, Limitation Act. The sole question, as I have already stated, is whether or not the unsatisfied balance due under the mortgage decrees was legally recoverable. The test for determining whether or not the balance was legally recoverable is to see the limitation at the date of the suit. Both the suits here were instituted on 28 September 1929, and the question therefore arises whether or not on this date the mortgagee had the right to recover a personal decree against the mortgagors. Both the Courts below have decided against the mortgagee on this question, and the reason which influenced their decision seems to be that the cause of action must be deemed to have accrued not at the end of the period of repayment stipulated for in each bond, but on the occurring of the default which gave rise to a right to sue for the entire amount. In other words, it was held by the learned Subordinate Judge and the learned District Judge that the cause of action accrued at the end of Falgoon 1325 in the first case, and at the end of Falgoon 1327 in the other, and as the suits were not instituted within six years from that date, the claim to a personal decree must be held to be barred.

(3.) In my opinion, the Courts below did not approach the question from the correct point of view. Whether the claim would be barred or not will depend upon the particular Art. of the Limitation Act applicable. It is no use entering into a discussion as to when the cause of action for the suits arose, unless the date of accrual of cause of action is made the starting point for reckoning limitation under the appropriate Article. The material question therefore is to find out the proper Article. On the face of it, Art. 75 would appear to be quite apt. It refers to a suit on a promissory note or bond payable by instalments, which provides that if default be made in payment of one or more instalments, the whole shall be due, and the period of limitation is three years from when the default is made unless where the payee or obligee waives the benefit of the provision, and then when fresh default is made in respect of which there is no such waiver.