Hombe Gowda, J.
This is a plaintiff's Second Appeal and arises out of a suit filed by him for the recovery of a sum of Rs. 4,000/- being the principal and interest executed by the respondent in favour of his father Rama Subbiah. The mortage-bond stipulated a period of six years from its date for redemption. It further stipulated annually and that interest at nine per cent. was payable annually and that if there was a default in its payment during any one of the years the mortage money without waiting till the stipulated period.
The respondent did not pay the interest regularly as it fell due. Hence the mortage on 20/12/1938 issued a registered notice calling upon the respondent to pay up the entire mortage money with in ten days of the receipt of the notice. He further stated in the said notice that if the respondent failed to pay the amount without any further notice. In spite of this notice the mortgagor did not pay the mortage money but yet Rama Subbiah ( the mortgagee) did not file a suit for its recovery.
Rama Subbiah the mortgage died in or about the year 1940, leaving behind him the appellant as his sole surviving heir. The appellant filed a suit for the recovery of the mortgage money on 12/6/1952 in the Court of the Subordinate Judge, Bangalore. The respondent in his written statement inter alia stated that the suit filed by the appellant on 12th of June 1952 was barred by limitation , the same having been filed twelve years after the money became due.
He alleged that since Rama Subbiah had elected to enforce the default clause and had called for the entire amount by issue of a registered notice dated 20th December 1938, the amount covered by the mortgage bond became due immediately thereafter under Article 132 of the Limitation Act and as the present suit had been filed beyond twelve years, from the said had been filed beyond twelve years form the said date the same was barred by limitation. The learned Subordinate Judge accepted this contention of the respondent and dismissed the suit.
The learned Subordinate Judge felt himself bound to follow and apply the decision of the High Court of Mysore reported in M. Govinda Rao v. Ramachandrachar, 19 Mys L J 447 in which it had been held that where the mortgage bond in which the time for payment of the mortgage debt had been fixed, stipulated that interest was to be paid every year regularly and that if there was failure to pay the interest at the time fixed every year the principal sum would be repaid immediately on demand, the suit filed for recovery of the mortgage money more than twelve years after the first default in the payment of interest was barred by limitation under Article 132 of the Limitation Act.
The appellant preferred an appeal of the learned Principal Subordinate Judge to the Court of the District Judge, Bangalore. The learned Additional District Judge dismissed the appeal concurring with the trial Court in Mysore were bound to follow and apply the decisions in Naranappa v. Puttiah, 19 Mys CCR 169; 19 Mys LJ 447 and Nandhi Basappa v. Venkata Subba Rao, 28 Mys LJ 114 and that the right to sue in the instant case had accrued to the father of the appellant on 147th of June 1938 that is, on the date of the first default and therefore, the suit filed by the present appellant on 12th of June 1952 was barred by limitation under Article 132 of the Limitation Act being beyond twelve years of such default.
The decision in Lasa Din v. Mt. Gulab Kunwar, was cited before the Courts below and it was urged that the law laid down by their Lordships of the Private Council in it should be accepted in preference to the decisions of the High Court of Mysore. The lower Courts rejected this Chief Justice Really in 19 Mys LJ 447 as an effective answer to it. The said observations are as follows :
'Now, whatever may be the view in some other parts of the India about the effect of such a provision it was decided in 19 Mys CCR 169 that such a default clause making the whole amount of the debt due on a failure to pay interest in any year would make the whole make the whole debt due within the meaning of Article 132 of the Limitation Act and we are bound by that decision.'
It was urged before the Courts below that the time stipulated for payment in a mortgage bond was or this benefit of this mortgagee and that in cases where a default clause making the whole amount repayable on failure to pay the interest in any year is incorporated bank in the bond, the mortgage money became 'due ' only when the mortgagee had in exercise of his option called for the entire amount as in such cases the right to redeem the mortgage accrues to the mortgagor. They rejected this contention relying upon the observations of Subramaniya Iyer, J. In the cases referred to above which are to the following effect:
In Mysore, the term ordinarily provided in the mortgagee bond is considered to be for the benefit of the mortgagors. As has been held in Najundappa view. Krishniah Setty, 40 Mys HCR 435 which followed Muniga v. Adam Sab, 16 Mys CCR 113 when there is nothing explicit to show that the mortgagor cannot redeem before a certain date, the mortgagor may redeem at any time , unless the nature of the mortgagee or the circumstances show that he has not that right.'
It is, therefore, clear that the lower appellate Court felt that it was bound by the decisions of the erstwhile Mysore High Court and was not at liberty to accept the law as laid down by their Lordships of the Privy Council inner 1932 PC 207. Having reached the said conclusion the learned District Judge dismissed the appellants appeal . It is against this decision that the present appeal has been filled by the appellant .
(2) It was urged by Shri Adinarayana Rao the learned council for the appellant that now a Full Bench of this High Court has held in Basappa v.State , 1958 -36 Mys LJ 580' (AIR 1959 Mys 1) that this High Court established under the States Reorganisation Act 1956 is not bound by the decision of the Chief Court of Mysore and of the High Court of Mysore delivered prior to 1/11/1958. We should accept the decision of their Lordships of the Privy Council reported in AIR 1932 PC 207 as the same has been uniformly followed and accepted by all the other High Courts in India and that we should hold that the suit filed by the appellant is within time and is not barred by function.
(3) The only question for considerations in this appeal is as to the date on which the mortgage money became due under the mortgage deed Exhibit A. The document stipulates a period of six years for repayment of the mortgage money and therefore ordinarily the amount would have become due on the expiry of the period of six years, that is, on 14th of June 1940. As already stated this mortgagor by the said deed covenanted to pay interest at 9% per annum regularly and that at this interest for any year was not paid as and when it became due the mortgagee was at liberty to call for the whole amount forthwith without waiting for the stipulated period. The default clause upon which the defence was successfully founded reads as follows:
'If I fail to pay you the interest regularly and this put you to hardship, I have no objection, for your taking, without Waiting for the expiry of the stipulated period, such ships as may be necessary for the recovery of both the principal and the interest from me from out of the mortgaged property, my personal security and also both such other moveable and immovable properties belonging to me'.
It inter state admitted that the respondent defaulted in the payment of interest in the very first year it because due and on such default the mortgagee became entitled to enforce his right and call for the mortgage money from the respondent. The several decisions of the former Mysore High Court have often taken the view that once the default inter state committed by the mortgagor in the payments of interest the mortgage money became due even if the mortgagee does not take advantage of the default and call for the mortgage money and the period of limitation commences to run from the date of the first default.
It is urged by Mr. Adinarayana Rao that the view taken by these decisions is incorrect and that we should therefore, accept and apply the law laid down by their Lordships of the Privy Council in Lasa Din's case . It is contended that if the view of the former High Court of Mysore is accepted it would virtually be conferring a right on the mortgagor to redeem before the expiry of the term fixed in the bond; that would lead to an impossible result in that he could by refusing to pay the interest break his contract and redeem the mortgage regardless of the term fixed.
He further contended that the term or period fixed for payment is for the benefit of the mortgage and that if the view of the former High Court of Mysore is accepted such a term becomes superfluous and valueless as the mortgagor can get the right to redeem by committing the default. There is considerable force in these contentions of Mr. Adinarayanan Rao. What is the effect of such a default clause in a mortage in which time for redemption has been fixed was considered by their Lordships of the Privy Council in . After reviewing the several conflicting decisions of the several Courts in India their Lordships held as follows :
'There can be no doubt that as pointed out by Lord Blanesburgh a proviso of this nature is inserted in a mortgage deed 'exclusively for the benefit of the mortgages', 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 his 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 mortgages is in effect converted into an option in the mortgage. 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 ' eo instanti' as Lord Blanesburgh says he is entitled to redeem. If the principal money is 'due' and the stipulated term has gone out of the contract it follows in their Lordships' opinion that the mortgagor can claim to repay it was recognised by Wazir Hasan, J. in his judgment in the Chief Court. Their Lordships think that this is an impossible result. They are not prepared to hold that the mortgagor could in this way take advantage of his own default ; they do not think that this an impossible result. 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 Art. 132, Lim. Act until both the mortgage's right to enforce his security have accrued. This would of course also be the position if the mortgage exercised the option reserved to him.'
It is, therefore, clear that in their Lordships' opinion the mortgage money does not become due until there is a mortgage can call in his money. It is further clear that a default in payment of interest by the mortgagor without any act on the part of the mortgage to call in the entire mortgage money will not confer a right on the mortgagor to redeem on such default regardless of the fixed term for payment.
(4) Reference may also be made to a decision of the Calcutta High Court in Durga Prasad Chamaria v. Mario Galstun, (S) : AIR1955Cal194 in which it is held that it is only when the right of the mortgagor to redeem and the right of the mortgage to the mortgage to call in the entire mortgage money coalesce that the mortgage money 'becomes due'. My Lord the Justice (he was then the Judge of the Calcutta High Court) who delivered the main judgment in the case, dealing with this point observed as follows:
'As laid down by their Lordships of the Judicial Committee in the case of the mortgage money does not 'become due' until both the mortgagor's right to redeem and mortgagee's right to enforce his security have accrued. In other words, the mortgagor money would become due when both the rights of the mortgage to sue and of the mortgagor to redeem would coalesce.'
In his concurring judgment, Chakravathi, C.J. dealing with this question observed :
'The other question of law is as to whether money advanced under a mortgage does not become due within the meaning of Art. 132, Limitation Act until and unless a demand is made. Mr. Sandal contended that a demand due and time could begin to run. The difficulties of that view have been sufficiently dealt with by my learned brother. The difficulties arise from the fact that under the exposition of the word 'due' as given by the Judicial Committee in the case of , 'money does not become due within the meaning of Art. 132 Limitation Act until both the mortgagor's right to redeem and the mortgage's right to enforce a security have accrued.'
In other words those two rights must co-arise and coincide. Mr. Gupta contended that the further observation of the Judicial Committee that 'this would of course also be the position if the mortgage exercised the option reserved to him' in a case where he had a right to enforce immediate payment of the entire mortgage money in default of some stipulated was perhaps not appropriate but I am unable to see any difficulty. The entire mortgage money would certainly not become due automatically as soon as the default occurred but he mortgage had the right to made it due by exercising his option and the moment he did so, his right to redeem would both accrue.'
It is not necessary to multiply decisions. It is sufficient to state that all the High Court in India have uniformly accepted and applied the law as laid down by their Lordships of the Privy Council in Lasa Din's case, referred to above.
(5) The following principles of law are deducible from the several decisions: (1) The time stipulated in a mortgage deed is for the benefit of the mortgage money repayable on failure to pay interest in any year is incorporated in the bond, the entire money does not become 'due' automatically on the mortgagor's default in payment of interest and that the mortgagor cannot take advantage of his own default and repay the amount before the time stipulated; (3) The mortgage money in such case 'becomes due' only when the mortgage in exercise of his option takes steps to call for the entire amount; (4) Once the mortgage exercises his option calls for the entire mortgage money, the stipulated term goes out of the contract with the result the right of the mortgagor to redeem and the right of the mortgagee to enforce the security would both accrue and (5) the mortgage money becomes then due within the meaning of Article 132 of the Limitation Act.
The above principles are, in my opinion, unexceptionable able. Now the territories of former Mysore State and the areas of the former State of Bombay, Madras, Hyderabad and the entire State of Coorg have gone to make up the present State of Mysore; the maxim stare decisions is and the danger of want of continuity in the interpretation of the law if the decisions of the former High Court are not applied, do not apply in the instant case as the Full Bench of this High Court has held that the decisions of the former State of Mysore are not binding on this High Court.
I, therefore, unhesitatingly hold that the decisions of the former High Court which took a view contrary to the view of their Lordships of the Privy Council are not correct. In my opinion, the view of their Lordships of the Privy Council in Lasa Din's case, which has been uniformly accepted and applied by all the High Court in India, should be accepted in preference to the view of the erstwhile Mysore High Court.
(6) The above conclusion does not, however, help the appellant in any way as Rama Subbiah, father of the appellant had exercised his option by issue of a registered notice Exhibit II dated 20-12-1938 and called for the entire amount. It was urged by Mr. Adinarayana Rao that Rama Subbiah issued Exhibit II only as a threat and the same cannot be considered to be an act of election on his part to make the mortgage money 'become due'. There is no force in this argument. Rama Subbiah had unequivocally called upon the respondent to pay up the entire money in Exhibit II. The relevant portion of Exhibit II reads as follows:
'My client has instructed me to demand from you of Respondent. 3619/14/0 together with my fees of Rs.5/8/0 be not paid either to me or to my client within ten days of the receipt of this notice a suit will be filed against you without further notice and you will be liable for all the court costs and expenses which my client might incur in this behalf'.
It is clear from the above that Rama Subbiah called for the entire mortgage amount. We questioned Mr.Adinarayana Rao as to whether the mortgagor was not entitled to pay up the entire amount within the time prescribed in the Exhibit II immediately after he received the same and he fairly conceded that he could do so. That means the mortgagor's right to redeem accrued immediately after he received Exhibit II, though the period stipulated in Exhibit A had not expired. It is this clear that Rama Subbiah had by issue of Exhibit II elected to enforce the default clause in Exhibit A and as a result of the notice the mortgage money became due on or from the date of Exhibit II. Therefore, the suit filed by the appellant on 12/6/1952 which was admittedly beyond twelve years from the date of Exhibit II is clearly barred by Limitation.
(7) I t is next contented by Mr.Adinarayana Rao that there are clear indications in the case that the mortgagee had waived his right to enforce the default clause by accepting the payments of interest subsequent to the date of Exhibit II as is clear from the endorsements made on 15/3/1937 and 2/7/1939 on the suit document. I am unable to accept this contention. The payment of interest under Exhibit A1 on 15--3-1937 was before Exhibit II was issued. Therefore, no question of waiver arises in so far as this payment is concerned. In so far as the payment under Exhibit A2, dated 2-7-1939 is concerned the Courts below have concurrently held that P.W. I Venkatarangachar was not a duly authorised agent of the respondent and that he did not make the said payment for and on behalf of the respondent .
As a matter of fact, the concurrent finding of the lower Courts is that the payments covered in the endorsements Exhibit A-1 and Exhibit A--2 were made by P.W.I, venkatarngachar, quite against the specific instructions of the respondent as it clear from the letters produced by the appellant which are marked as exhibits in the case. Therefore, these endorsements, even if they are true, do not in any way support the plea of wavier.
(8) In the result, for the reasons stated above this Second Appeal fails and the same is dismissed. In the circumstances of the case, I am of the opinion that it is necessary in the interests of justice that the parties should be directed to bear their own costs throughout.
S.R. Das Gupta, C.J.
(9) I agree.
(10) HE/M. f..
(11) Appeal dismissed.