1. [His Lordship after setting out the facts of the case and dealing with a point not material to this report, proceeded.] Then the second point raised by Mr. Gokhale was that the suit for foreclosure was misconceived when the transaction in suit evidenced only a usufructuary mortgage. It cannot be disputed that the present suit is a suit instituted only for foreclosure. The relief prayed for in the plaint is that if the mortgage amount is not paid as directed by the Court, the defendant should be ejected and plaintiff's possession confirmed and he be held entitled to apply for a final decree debarring the defendant from all rights to redeem the mortgaged property. It is also undisputed that an usufructuary mortgagee cannot institute a suit for foreclosure In view of the provisions of Section 67 of the Transfer of Property Act. But is the mortgage on which the suit is instituted an usufructuary mortgage as contended by Mr. Gokhale? We have been supplied with a copy of an official translation of the original mortgage-deed which is exh. PI on the record. We direct that the copy be taken on the records of the appeal. The relevant portions of the mortgage-deed may be set out herein below :-
I Ramprasad son of Dagaduram... have mortgaged with possession with Tarabai Saheba wife of Motilal Saheb, the owner of the shop, 'Narayandas Chunilal Hirakhan' Jalna the whole of the ginning factory owned and possessed by me, known as 'Saraswati Gin'...under a possessory mortgage deed dated 5-9-1927 in consideration ofRs. 30,000.... It was agreed that the amount was to be paid by instalments upto 6-9-1932 and in the event of default a right of foreclosure was given to the aforesaid mortgagee according to the above mentioned deed. As the period of mortgage has expired and as executant could not make the full payment of the claim and that the below mentioned amounts of the claim of the aforesaid lady are due by the executant....
The sum of Rs. 17,351-1-6 in respect of interest on the mortgage amount from 14-9-1927 to 13-12-1934; the total sum being Rs. 47,351-1-6... In all a sum of Rs. 20,996-1-9 has been paid. Thus a sum of Rs. 26,354-15-9 and a sum of Rs. 6,195-0-3 in respect of other claim under the khata making in all an amount of Rs. 32,500 are due by the exacutant. The lady at the request of the executant has relinquished her claim under the mortgage (for) Rs. 7,000. Now, as regards the rest of the claim there remains due and payable by the executant a sum of Rs. 25,550... In lieu of the amount (Rs. 25,550)... the ginning factory is mortgaged with possession in favour of Tarabai Saheba. The mortgagee shall continue to remain in possession and occupation of the said factory as before...
The payment of the amount of mortgage is to be made within the period of 9 years by instalments in the manner that annually Rs. 3,000 and the interest on the whole mortgage amount shall be paid, that the first instalment shall commence from 19-12-1935 and that in this way each year on the said date fixed, the instalment together with interest on the whole mortgage amount shall become payable, that the final instalment shall be of Rs. 1,550 together with the interest on the whole mortgage amount...
In the event of non-payment of continuous or non-continuous five instalments as specified above the mortgagee shall be entitled to recover the entire mortgage amount and in whatever the amount of mortgage remains payable in consideration thereof the aforesaid factory shall be deemed to have been foreclosed in favour of the mortgagee and that the right of redemption of mortgage of the executant shall become extinguished... In the event of there being no profits by reason of the fact that the factory remains closed for any reason whatever or there being no 'joint' or that the same cannot be rented out or that the same cannot be run, then the executant shall be liable to pay the principal and the interest thereon from his personal property...
Sd. Ramprasad Dagaduram.
Mr. Gokhale contends that the terms of the mortgage-deed contain all the essentials of an usufructuary mortgage except where the mortgage-deied contains a clause 'the aforesaid mortgage shall be deemed to have been foreclosed in favour of the mortgagee and the right of redemption of mortgage of the executant shall become extinguished' which according to Mr. Gokhale operates as a clog on the equity of redemption and must, therefore, be ignored. It is not possible to accept this contention. If the document is read as a whole it seems to us that it evidences a transaction of an anomalous mortgage the terms of which expressly confer a right of foreclosure upon the mortgagee. In our view, the learned trial Judge was not right when he held that the mortgage under consideration was no doubt an usufructuary mortgage as denned in Section 58 of the Transfer of Property Act. We have, therefore, no difficulty in holding that the present suit for foreclosure is perfectly tenable if it is not otherwise barred by time.
2. The third point raised by Mr. Gokhale is that the present suit which is instituted on February 10, 1954, is barred by limitation The learned trial Judge held that Article 147 of the Limitation Act which prescribes a period of 60 years for instituting a suit by a mortgagee for foreclosure or sale applied to the present suit and that even assuming that Article 132 applied as was contended before him by the defendant, the suit would still be in time as it had been, instituted within 12 years from the date when the mortgage money became due. In the view of the learned Judge the period of limitation whether under Article 147 or under Article 132 started on the expiry of nine years as stipulated in the mortgage-deed.
3. On. the date of the execution of the mortgage-deed and even on December 13, 1943, when according to the plaintiff his cause of action for the present suit arose, the Hyderabad Limitation Act was in force. Under Article 133 of that Act the period prescribed for instituting a suit for foreclosure was 30 years. Mr. Kotwal emphasises the distinction between the wording of the first column of Article 133 of the Hyderabad Limitation Act and that of Article 147 of the Indian Limitation Act. of 1908. In the former it is a suit for foreclosure only; while in the latter it is a suit for foreclosure or sale. In Vasudeva Mudaliar v. SrinivasaPillai it was held that Article 147 of the Indian Limitation Act was restricted to suits on mortgages when the mortgagee is entitled to either of the two remedies of foreclosure or sale in the alternative. Therefore, the article would apply only to an English, mortgage (as denned in the Transfer of Property Act before its amendment of 1929) in which alone 'the suit can be, and always is brought for 'foreclosure or sale' '. In the present case the mortgagee is not entitled to either of the two remedies of foreclosure or sale in the alternative and the suit is instituted only for foreclosure. It is, therefore, clear that Article 147 of the Limitation Act of 1908 does not apply to the present suit. Mr. Kotwal, however, says that it is Article 133 of the Hyderabad Limitation Act which referred to a suit for foreclosure only (and not to a suit for foreclosure or sale in the alternative) and which was in force at the time when the cause of action arose that is applicable to the present suit, and that the aforesaid decision of the Privy Council which construed the words of the first column of Article 147 cannot be relied upon in construing the words of the first column of Article 133 of the Hyderabad Limitation Act which are materially different from those of Article 147 of the Indian Limitation Act, 1908. The Hyderabad Limitation Act was repealed and the Indian Limitation Act, 1908, was extended to the State of Hyderabad by the Part B States (Laws) Act, (III of 1951) and it is not disputed that it was the Indian Limitation Act, 1908, which was in force on the day on which the present suit was filed. But Mr. Kotwal says that in view of the proviso to Section 6 of the Part B States (Laws) Act (III of 1951) the repeal of Hyderabad Limitation Act shall not affect any right acquired under that Act and any legal proceeding in respect of any such right may be instituted as if Part B States (Laws) Act (III of 1951) had not been passed. in other words, the contention is that the present suit, though instituted after the Part B States (Laws) Act (III of 1951) came into force, is still governed, for the purpose of limitation by the former Hyderabad Limitation Act. Proviso to Section 6 of the Part B States (Laws) Act (III of 1951) says
Provided that the repeal shall not affect-...
(b) any right, privilege, obligation or liability acquired, accrued or incurred under any law sorepealed,...
(d) any investigation, legal proceeding, or remedy in respect of any such right, privilege, obligation, liability...as aforesaid;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced... as if this Act had not been passed.
It is difficult to accept the contention of Mr. Kotwal made in this behalf. No right whatever was acquired by the mortgagee or his heir under the form Hyderabad Limitation Act in respect of which the present suit is filed. The light to obtain a decree for foreclosure accrued to the mortgagee under Section 67 of the Transfer of Property Act and under the terms of the mortgage-deed and not under the Limitation Act. It is well settled that an Act of Limitation being a law of procedure governs all actions and proceedings to which its provisions are applicable from the moment of its enactment except so far as its operation is expressly excluded. In Masjid Shahid Ganj Mosque v. SMromani Gurdwara Parbandhak Committee, Amritsar : (1940)42BOMLR1100 ,P.C., their Lordships of the Privy Council observed that the rules of limitation which apply to a suit are the rules in force at the date of institution of suit, limitation being a matter of procedure. The statute of limitation prescribes only a period of limitation and does not create any right in favour of any person or define or create a cause of action. In Hurrinath Chatterji v. 'Mohunt Mothoor Mohun Gosivami , their Lordships of the Privy Council observed that the intention of the law of limitation is not to give a right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right.
4. If, therefore, it is the Indian Limitation Act, 1908, that applies to the present suit and if Article 147 of that Act does not apply to any mortgage other than an English mortgage as held in Vasudeva Mudaliar v. Srinivasa Pillai, which then is the Article of the Limitation Act that applies to a suit for foreclosure as in the present case? Mr. Gokhale contended before us that Article 120 would apply to the present suit and the suit having been filed more than six years after the right to sue accrued to the plaintiff was barred by time. In the trial Court, however, the defendant relied upon Article 132 and contended that the suit was barred under that Article. Mr. Kotwal urged that the suit would be governed only by Article 132 and had been filed within 12 years from December 13, 1943, on which date alone the money sued for had become due (after the expiry of the period of 9 years stipulated in the mortgage-deed) as required under the 3rd column of the Article.
5. The Article 132 runs as follows:-
Time from which
Description of suit. Period of limitation.
period begins to run.
132-To enforce payment of Twelve years. When the money sued for
money charged upon im- becomes due.
This article in terms does not refer to a suit for foreclosure just as the Article 147 refers to a suit for foreclosure or sale. If we look into the history of legislation on this subject it will be seen that under Act XIV of 1859 (an Act to provide for the limitation of suits) no period of limitation had been expressly prescribed for a suit for money secured by a mortgage or otherwise charged upon immovable property, nor for a suit for possession, nor for foreclosure by a mortgagee. In Juneswar Dass v. Mahabeer Singh (1875) L.R. 3IndAp 1, a case under Act XIV of 1859, it was held by their Lordships of the Privy Council that a suit by the mortgagee to recover the amount due on the mortgage bond by sale of the mortgaged lands was in substance a suit for the recovery of immovable property or of an interest in immovable property and fell, therefore, within Clause 12 of Section 1 of the Act. Clause 12 of the section had prescribed a period of 12 years.
6. The Indian Limitation Act of 1871 (Act No. IX of 1871) repealed the earlier Act of 1859. Under this Act Article 132 provided for a suit to recover money charged upon immovable property. But there was no provision at all as regards suits for foreclosure. It seems, however, that a suit for foreclosure was treated as a suit for money charged upon immovable property and, therefore, fell within Article 132 of the Act. Same view was taken in some English' cases. In Dearman v. Wyche(1839) 9 Simons 570, the Vice-Chancellor (Sir L. Shadwell) observed (p. 575):.although it has been said that a bill for foreclosure only seeks the exclusion of an Equity, yet it is, in substance, a suit in Equity for the recovery of money. If the opinion of any counsel were asked how money due upon mortgage could be recovered or got in, he would, at once, advise a bill of foreclosure. It is a suit to recover money;.
7. Act IX of 1871 was repealed by the Indian Limitation Act, 1877 (Act XV of 1877). In this Act for the first time Article 147 provided for a suit by a mortgagee for foreclosure or sale. But this Article was construed by their Lordships of the Privy Council as applying only to an English mortgage where the mortgagee could claim either foreclosure or sale in the alternative. Thus there was no express provision even under the Act of 1877 as regards suits only for foreclosure. But such suits were held to be governed by Article 132 of the Act of 1877which is the same as the present Article 132 of the Limitation Act, 1908. In Nilcomal Pramanick v. Kamani Koomar Basu I.L.R.(1891) Cal. 269, the learned Judges of the Calcutta High Court were considering the applicability of Article 132 to a mortgage by Conditional sale. In that case plaintiff, the mortgagee, asked for a decree for foreclosure and the. question arose as to which Article of the Limitation Act of 1877 applied to his suit. The learned Judges observed (p. 272) :.Article 147... applies only to those cases in which the mortgagee is entitled to the alternative remedies of foreclosure and sale. Now the mortgage in this case being by conditional sale, the mortgagee is not entitled to the remedy by sale. That being so, Article 147 of the Limitation Act does not apply to this case...the only provision applicable to this case is, we think, Article 132. A comparison of the language of Article 132 of the present Act, which speaks of suit to enforce payment of money, &c;, with that of the corresponding article of the Limitation Act of 1871, and the fact that the first decree in a foreclosure suit under the Transfer of Property Act is one that in the first place directs the mortgagor to pay off the mortgage money, go to support this view.
This view was followed by a Special Bench of the same High Court in Balaram v. Mangta Dass I.L.R.(1907) Cal. 941. In that case also the suit was one for foreclosure of a mortgage by conditional sale. An earlier decision of the Full Bench of the same Court reported in Girwar Singh v. Thakur Narain SinghI.L.R.(1887) Cal. 730, was also relied upon and it was held that (p. 945) :.according to the ruling of this Court in the case of Girwar Singh v. Thakur Narain Singh, the period of limitation prescribed for a suit of this nature is 12 years, as provided in Article 132 of the second schedule to the Indian Limitation Act.
8. The Limitation Act of 1877 was replaced by the present Act IX of 1908. But Articles 147 and 132 remain the same, though there is some alteration in the Explanation to Article 132 which, however, it is not necessary to notice for our present purpose.
9. Thus it will be seen that, as in the previous Acts so in the present Act, there has been no express provision as regards suits for foreclosure only. But such suits for foreclosure under the previous Acts were regarded as suits for money charged upon immovable property and were governed by 12 years' rule for the purpose of limitation. In Juneshwar Dass v. MahabeerSingh, a case under Act XIV of 1859, a suit to recover the amount due on a mortgage bond by sale of the mortgaged lands was regarded as a suit brought, in substance, for the recovery of immovable property or of an interest therein and, therefore, the 12 years' rule was held to apply to such suit. The same period of limitation was held to apply to suits for foreclosure arising under the Acts of 1859 and 1871; see Bam Chunder Ghosaul v. Juggutmonmohiney Dabee I.L.R.(1878) Cal. 283. In Nilcomal v.Kamini, a case under the Limitation Act of 1877, Article 132 was held in terms to apply to a suit for foreclosure. Such a suit was regarded as a suit to enforce payment of money charged upon immovable property, in view of the fact that the first decree in a foreclosure suit under the Transfer of Property Act was one which directed the mortgagor to pay off the mortgage money. Under the present Civil Procedure Code a preliminary decree in a foreclosure suit also directs the defendant mortgagor to pay the mortgage dues in Court on or before a day to be fixed by the Court, As held in the English case referred to above, a suit for foreclosure is in substance a suit for the recovery of money, for enforcing payment of money charged upon immovable property. It is now well settled that a suit to recover money due upon a simple mortgage-deed is governed by art, 132. Such a suit is regarded as a suit to enforce payment of money charged upon immovable property. There is no reason why a suit for foreclosure should be differently treated and not considered as a suit to enforce payment of money charged upon immovable property. In the one case the enforcement of the payment of money is brought about by the sale of the mortgaged property, in the other by a decree that the mortgagor shall be absolutely debarred of his right to redeem the property. The manner in which the payment of money is enforced in the two cases may be ultimately different. But what is sued for in both the cases is essentially the same. It is the payment of money charged upon the immovable property.
10. In this view there should not be any difficulty in putting the same construction on Article 132 of the present Act as was done by the High Court of Calcutta in the cases, which had arisen under the previous Acts, and in holding that a suit for foreclosure as in the present case is governed by that Article for the purposes of limitation. This construction, in the words of their Lordships of the Privy Council, escapes the necessity of attributing to the Legislature a great and sudden change of policy, and it also gives effect to the ordinary presumption that the Legislature when it repeats in substance in a later Act an earlier enactment that has obtained a settled meaning by judicial construction intends the words to mean what they meant before.
11. In Sheoram Singh v. Babu Singh I.L.R.(1925) All. 302, it was held that a suit on a mortgage by conditional sale for money or for foreclosure was governed by Article 132 of the Limitation Act, 1908.
12. In the view we have taken it is clear, therefore, that Article 120 which is a residuary article is inapplicable to the present suit. If Article 132 applies to the present suit, when does the period of limitation begin to run against the plaintiff? What.is the date upon which the principal money became due under the mortgage in the present case? Under the mortgage-deed the mortgage amount had been made payable by certain annual instalments and the first of such instalments was to commence from December 19, 1935. It was further stipulated that 'in the event of non-payment of continuous or non-continuous five instalments, the mortgagee shall be entitled to recover the entire mortgage amount.' No instalments were ever paid by the mortgagor, and it is now contended by Mr. Gokhale that even if it be held that Article 132 applies to the present suit, the suit should have been filed within 12 years from December 19, 1939, whenthe default in the payment of 5 instalments was committed and when, therefore, the whole amount became due within the meaning of Article 132. A similar default clause as the one in the present mortgage-deed came to be considered by their Lordships of the Privy Council in Lasa Din v. Gulab Kunwar (1932)L.E. 59 I.A. 370 : 34 Bom. L.R. 1600, where it was held that under Article 132 a suit to enforce a mortgage for a stipulated period can be instituted within 12 years of the expiry of the period, although a default by the mortgagor has occurred during the period and by the terms of the mortgage, the mortgagee thereupon had an immediate right to enforce the mortgage and that the money becomes payable within the meaning of that article only when either the stipulated period has expired or a default having occurred the mortgagee has exercised his option to enforce the mortgage. In the course of the judgment their Lordships observed that (p. 384) :. a proviso of this nature is inserted in a mortgage deed 'exclusively for the benefit of the mortgagees,' and that it purports to give them an option either to enforce their security at once, or, if the security is ample, to stand by their investment for the full term of the mortgage. If on the default of the mortgagor-in other words, by the breach of the contract-the mortgage money becomes immediately 'due,' it is clear that the intention of the parties is defeated, and that what was agreed to by them as an option in the mortgagees is, in effect, converted into an option in the mortgagor. For if the latter, after the deed has been duly executed and registered, finds that he can make a better bargain elsewhere, he has only to break his contract by refusing to pay the interest, and'co-instanti,' as Lord Blanesburgh says, he is entitled to redeem... They are not prepared to hold that the mortgagor could in this way take advantage of his own default: they do not think that upon such default he would have the right to redeem, and in their opinion the mortgage money does not 'become due' within the meaning of Article 132 of the Limitation Act until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. This would, of course, also be the position if the mortgagee exercised the option reserved to him.
13. In the present case, the mortgagee did not exercise the option reserved to him under the mortgage-deed. In view of the Privy Council decision, it must, therefore, follow that the mortgage money became due only after the expiry of the full-term of the mortgage, i.e. on December 13, 1943. The suit is within 12 years from that date.
14. Mr. Gokhale, however, contended that th,e decision of the Privy Council does not apply to the present case, as in the mortgage-deed in suit there is no period fixed for redemption. If such a period had. been fixed in the mortgage-deed, as was the case before the Privy Council, the mortgagor by taking advantage of his own default could not accelerate his right of redemption before the full term of the mortgage. Mr. Gokhale relies upon the clause of the mortgage-deed which provides that the payment of mortgage is to be made within the period of 9 years by instalments and says that under this clause the mortgagor can pay the amount at any time within 9 years and that, therefore, the principle that the mortgagor would not be allowed to take advantage of his own default and break the contract did not arise in the present case. The Privy Council decision could be distinguished on this ground and, therefore, in the present, case it was the date of the default only on which it must be held that the money became due.
15. It is not possible to accept Mr. Gokhale's construction of the clause in the mortgage-deed relating to the period of time for the payment of the mortgage money. The mortgage-deed says: 'within the period of 9 years by instalments'. The dates of the instalments also are specified and fixed. The first instalment was to commence from December 19, 1935, and the last was to be paid on December 19, 1944. Thus it will be seen that the words 'within the period of 9 years' have been qualified by the words 'by instalments' which are specified in the sentences that follow. The intention of the parties as to the period for redemption must be gathered from all the relevant clauses in the mortgage-deed and from the terms of the rent note which was passed contemporaneously with the mortgage-deed. A copy of the official translation of the rent note, exh. P-2, has been supplied to us. We direct it to be placed on the records of the appeal. The rent note was executed by the defendant on December 13, 1934. Under the rent note, the defendant took the mortgaged property on lease agreeing to pay an amount of yearly rent of Rs. 1,500 for 9 years. This also indicates that the period for redemption of the mortgage was fixed and that the mortgage debt was to remain outstanding, for 9 years. In Vadju v. vadju L.L.R.(1880) Bom. 22 it was held that the general principle as to redemption and foreclosure is that in the absence of any stipulation express or implied to the contrary, the right to redeem and the right to foreclose are co-extensive, In that case the mortgage-deed stipulated that the mortgagor would pay the debt with interest within ten years and redeem the mortgaged property. In a suit for redemption instituted before 10 years, the mortgagee contended that the suit was premature. It was held that the suit was premature as the mere use of the 'within' (Marathi word(sic)) was not a sufficient indication of the intention of the parties that the mortgagor might redeem in a less period than 10 years. On a proper construction of the mortgage-deed it seems to us that the period stipulated for redemption extended for 9 years and that under the terms of the mortgage it was not open to the mortgagor to pay up the amount and redeem the mortgage otherwise than as mentioned therein.
16. Mr. Gokhale has not disputed the correctness of the amount of Rs. 53,089-1-6 as mentioned in para. 5(g) of the plaint; nor has he raised any point under the Money Lenders Act.
17. The result of our findings is that the appeal must be allowed and the decree of the trial Court set aside. There will be a preliminary decree under Order XXXIV, Rule 2, of the Civil Procedure Code, only in favour of plaintiff No. 2 and defendants Nos. 2 and 3. As, however, accounts have to be taken to find out as to what amount would be actually due to the decree holders at the date of the preliminary decree, and as the necessary material in that behalf is not placed before us, we direct the trial Court to take the necessary accounts and find out the total amount due from the defendant on the date on which it would be passing the preliminary decree and then pass the usual preliminary decree in favour of plaintiff No. 2 and defendants Nos. 2 and 3. In taking accounts the trial Court should proceed on the basis that the amount due on January 31, 1954, was Its. 53,089-1-6 as mentioned in para. 5(g) of the plaint. If the amounts due from the defendant under the preliminary decree are paid into Court, the trial Court will consider whether such amounts should be paid to one of the decree holders only or to all of them equally. if the learned trial Judge decides to pay the amounts only to one decree holder he will call upon such decree holder to furnish proper security to safeguard the interests of other decree-holders. The learned trial Judge will pass any other order or orders that may be found necessary or proper after the amounts are paid into Court by the defendant. Similar orders to safeguard the interests of the decree-holders may also be passed on and after the final decree.
18. Since we have held that the question of adoption need not be gone into in the present appeal, the suit will have to be dismissed against him.
19. Costs of this appeal will be costs in the trial Court.