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Chhotalal Karsandas Vs. Vishnu Ganesh Gokhale - Court Judgment

LegalCrystal Citation
SubjectLimitation;Property
CourtMumbai
Decided On
Case NumberSecond Appeal No. 770 of 1919
Judge
Reported inAIR1921Bom182; (1921)23BOMLR84; 60Ind.Cas.903
AppellantChhotalal Karsandas
RespondentVishnu Ganesh Gokhale
DispositionAppeal allowed
Excerpt:
.....of mortgage in a setekhat-fresh mortgage-deed not validly executed-creation, of charge suit to have the charge declared.;the defendants executed a mortgage in 1887. to pay off the mortgage they borrowed rs. 4,000 from one of the mortgagees under a satekhat, datod 22nd august 190, which acknowledged the mortgage of 1887 and contained an undertaking to pass a fresh mortgage for the advance. a fresh mortgage deed was passed in 1902, but not having been duly attested, it was inoperative. in 1914, the mortgagee sued to recover his money by subrogating on the mortgage of 1887 : -;(1) that the mortgagee could ask the court for a declaration that he was entitled to charge on the property to the extent of ths money advanced, or that be was entitled to be put in the same..........the fact that the bank also held another security. he is entitled to a declaration that he has a right to a charge on the manor road property for 450 and interest at 5 per cent., that being the rate of interest charged by the bank, and to have his security enforced by the usual foreclosure judgment in the case of an equitable mortgage.'6. now there is no doubt that the payment in 1901 created a set of circumstances which enabled the person who paid the money to establish his right to a charge. but with regard to the property sold, the mere payment would not give the parson who paid it any right against the property either to go into possession or to sell it. it would only give him a right to ask the court to come to his assistance, on the ground that the facts which he relied upon.....
Judgment:

Norman Macleod, Kt., C.J.

1. The plaintiff sued to recover the sum of Rs. 3,553-11-0 and costs with future interest by sale of the mortgaged property.

2. The mortgage is dated 30th of November 1902. It is common ground that the mortgage deed was not properly attested and therefore the suit on the mortgage must fail. The plaint was allowed to be amended so as to enable the plaintiffs to ask the Court to declare that they were entitled to subrogate and fall back upon the previous deed of the 29th December 1887 and that the claim on that deed was not time-barred as it was acknowledged in the deed of 1902, the Satekhat of 22nd August 1901 and also the Vasul mentioned in the plaint.

3. The facts of the case are simple. In 1887 the mortgage of the plaint property was executed in favour of four brothers. In 1901, the four brothers partitioned and they were paid off on the day that the last payment was made on account of the mortgage. Ganesh, the son of one of the mortgagees, agreed to pay the mortgagor Rs. 4,000, and we may take it as admitted that Ganesh paid Rs. 4,000 to enable the mortgagor to pay what was required to make the last payment on account of the mortgage of 1887. No doubt it was intended that Ganesh should get a mortgage of the property to secure the re-payment of the Ra. 4,000 and the parties thought that they had executed a deed of mortgage for that amount in November 1902, That mortgage not having been executed in accordance with law must be ruled out of consideration altogether.

4. Then the question arises, what is the position of the plaintiff who had, on the 22nd August 1901, advanced the sum of Rs. 4,000 to enable the mortgagor to pay off the mortgage on the understanding that a further mortgage would be executed by the mortgagor. I do not think that there will be the slightest doubt that though Ganesh had no legal title to the plaint property he had a right to get a mortgage or to be placed in the same position as the previous mortgagee, and that right would be recognized if he came to a Court of Equity.

5. It may be said that in India there is no distinction between law and equity, but that makes no difference on a question 1920 of this kind, except that it only necessitates a little change in phraseology, and it may be said that Ganesh had no right in law to be considered as having any interest in this property Vishnu until he came to a Court of law which administers doctrines of equity to have his right established. That makes little difference where it can be said that Ganesh can ask the Court for a declaration that he is entitled to a charge on the property to the extent of the money advanced, or that he is entitled to be put in the same position as the mortgagees who have been paid off with his money. We have been referred to the case of Butler v. Rice [1910] 2 Ch. 277 where Warrington J. at page 282 says: 'The statement of claim proceeds on the well-known equitable doctrine that if a stranger pays off a mortgage on an estate he presumably does not intend to discharge that mortgage, but to keep it alive for his own benefit, The statement of claim asks for a declaration that the plaintiff is entitled to a charge on the Manor Road property for 450 and interest'. And again at page 283: 'The plaintiff did not know there was any other property; he intended to keep alive the security on the Manor Road property, and that intention was not affected by the fact that the bank also held another security. He is entitled to a declaration that he has a right to a charge on the Manor Road property for 450 and interest at 5 per cent., that being the rate of interest charged by the bank, and to have his security enforced by the usual foreclosure judgment in the case of an equitable mortgage.'

6. Now there is no doubt that the payment in 1901 created a set of circumstances which enabled the person who paid the money to establish his right to a charge. But with regard to the property sold, the mere payment would not give the parson who paid it any right against the property either to go into possession or to sell it. It would only give him a right to ask the Court to come to his assistance, on the ground that the facts which he relied upon created a charge. I think, therefore, the question of limitation in this case is one of primary importance. This is not the case of a party coming into Court to enforce a charge by a suit which is provided for by Article 132 of the Indian Limitation Act, which only relates to a suit brought to enforce a charge in existence and recognised at the date of the suit.

7. I cannot agree with the learned pleader for the respondent when he says that in a suit of this kind it is not necessary that the plaintiff should ask for a declaration. That declaration has to be made before the Court can exercise its jurisdiction over the property in suit. Otherwise the plaintiff can only be considered as a simple creditor who has made a payment to his debtor for a particular purpose.

8. An equitable mortgagee has a lien or interest in the property. He has possession of the title deeds, but cannot go into possession, and he cannot assert the right to sell the property unless he comes to a Court and gets a declaratory decree that he is entitled to a charge on the property. It appears to me that the only Article in the Indian Limitation Act which can apply to a suit of this nature is Article 120. Therefore, the plaintiff is barred unless he filed his suit within six years of the payment of the Ra. 4000. Even if the period is twelve years, the plaintiff would be no better off, because the suit was filed in 1914. I think the trial Judge has taken the right view when he says at paragraph 29 of the judgment:-' The question thus arises whether the plaintiff's claim on the lieu thus created by law is in time. The charge was created on the date of payment, 22nd or 23rd August 1901. The suit is filed on 19th November 1914 and thus the point is, if there are acknowledgments of such part payments or payments of interest as would extend the period of limitation. Payments are not relied upon.'

9. Thus it is found that there was nothing after the 23rd August 1901 which would start a new period of limitation running. The plaintiff's claim is, therefore, barred by limitation. The result is that the appeal is allowed and the suit dismissed. There will be no order as to costs.


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