1. Mohan Lal Sah filed a suit for recovery of Rs. 12,500 on the basis of a simple mortgage dated 15th March 1936 for Rs. 8000 executed by the defendants Hari Prasad Tamta and Lalta Prasad Tamta who are the appellants before us. The mortgage deed carried interest at nine annas per cent. per annum compound interest with half yearly rests. The defendants pleaded that they were entitled to the benefit of the Agriculturists' Relief Act and the Debt Redemption Act. The trial Court held that as Lalta Prasad was assessed to income-tax in the year 1934-35 on the basis of his income in 1933-34 he must be deemed to have been assessed to income-tax on the date when the mortgage deed in suit was executed and the mere fact that he suffered loss and was not assessed to income-tax in 1935-36 would not entitle him to claim that he was an agriculturist and was entitled to the benefits of the Agriculturists' Relief Act. The lower Court therefore refused to give the defendants the benefit of the Agriculturists' Relief Act and the Debt Redemption Act and decreed the plaintiff's suit in its entirety.
2. The only point raised before us is whether the defendants-appellants were or were not entitled to the benefits of the Agriculturists' Relief Act and the Debt Redemption Act. The lower Court has relied on a ruling reported in Rajnarain v. Bindaban : AIR1936All449 . In that case this Court while dismissing a civil revision observed that the words ' is assessed ' obviously meant ' was assessed at the last occasion,' that is to say 'was assessed during the last financial year.' Since the decision by the Court below there have been two more decisions of this Court. In Brij Jiwandas v. Kawal Mani Bibi ('42) 29 A.I.R. 1942 All. 444 a mortgage deed had been executed on 2nd August 1935. The question was whether the mortgagor was an agriculturist on the date of the execution of the mortgage. The mortgagor was assessed to income-tax in the year 1935-36 on the basis of the income of the year 1934-35, and it was held that he was not an agriculturist. The relevant observations were as follows:
Their contention is that Brij Jiwan Das was an agriculturist because, although he was assessed to the payment of income-tax in the year 1935-36, that assessment was made on the income of the year 1934-35, and that the question whether he was or was not an agriculturist should not depend upon payment of income-tax in the year of assessment but on the receipt of income in the year upon which the assessment was based. In our judgment there is no justification for this argument. The rule in the Agriculturists' Belief Act, Section 2 (2), is that no person shall be deemed to be an agriculturist if he is assessed to income-tax with certain provisos with which we are not here concerned. There can be no doubt that Brij Jiwan Das was assessed to income-tax for the year in which he executed the deed of mortgage, and there is nothing in the Act which suggests that it is necessary to go into the question upon what basis that assessment was made.
The other case is reported in Ganeshi Lal v. Shiam Lal : AIR1943All190 . That was a suit on the basis of a promissory note dated 15th October 1934. The executant had paid income-tax from the year 1931 up to the year ending 30th April 1935, but had not paid income-tax for any of the succeeding years. The suit was instituted on 18th September 1937 on which date the appellant was admittedly an agriculturist. The main point in the case was whether it was necessary for an agriculturist to prove not only that he was an agriculturist on the date of the suit but also on the date of the loan. The case in Rajnarain v. Bindaban : AIR1936All449 was considered and it was mentioned that all that was decided in that case was the meaning of the words 'is assessed' in proviso 2 to Section 2 (2) of the Act and the learned Judges did not decide the point of time to which the assessment was referable in any particular case. The reference was answered by Collister J. in these terms:
I would answer the reference by saying that for a person falling under Section 2(2)(f) the criterion is whether he was assessed to income-tax for the year in which the loan was advanced and to what amount he was thus assessed. (Bajpai and Dar JJ. agreed).
3. The use of the words 'is assessed,' if we may say so, is not a happy one. Income-tax is not assessed on the first day after the close of the previous year, and during a particular financial year the assessment may take place at any time and in some exceptional eases assessment may be delayed even for several years. To illustrate this further, if a document is executed in the financial year 1935-36, i.e., between 1st April 1935 and 31st March 1936, and the executant is assessed to income-tax during that financial year on the basis of his income for the year 1934-35, if the assessment takes place by about the middle of the year, say about July and August, will he be deemed to be an agriculturist if he executes a bond prior to the date of his assessment, and not an agriculturist if he executed the deed after the Income-tax Officer passed an order assessing him to income-tax? It is more likely that the Legislature meant that he was assessable to income-tax in that particular year when it used the words 'is assessed' to income-tax. But it is not necessary for us to express any final opinion on the point as we propose to decide this part of the case on another point.
4. The mortgage deed in suit was executed by Hari Prasad and Lalta Prasad, the owners of the firm Hari Prasad Lalta Prasad Tamta. It appears that they were carrying on some contract business in Ranikhet., In the document it is mentioned that the executant Lalta Prasad was not an agriculturist under' the U.P. Agriculturists' Belief Act, and the two executants were carrying on business jointly. Under the Agriculturists' Belief Act Section 2 (2), proviso 3, if an agriculturist joins with him a non-agriculturist in a transaction of loan he is not entitled to the benefit of the Agriculturists' Belief Act. The proviso reads as follows:
Provided further that if a non-agriculturist joins with an agriculturist in any transaction of loan, save for the purpose of adding his name as security, the agriculturist shall not be considered as such for the purpose of that transaction.
5. It is argued by Dr. Katju on behalf of the plaintiff that it was not open to the defendants now to plead that the declaration contained in the mortgage deed that Lalta Prasad was not an agriculturist was wrong, and they are estopped from now pleading that he was an agriculturist. Mr. Pearey Lal Banerji on behalf of the appellants, however, has argued that there is no estoppel against statute and this must be deemed to be a declaration not on a question of fact but on a question of law. His argument is that it must be deemed that his client gave out all the correct facts to the mortgagee and mentioned to him that he was assessed to income-tax in the year 1934-35 on the basis of his income in the year 1933-34 and his view that he was not an agriculturist was merely based on the view of law then prevailing, as contained in the ruling reported in 1936 A. L. J. 5011 which was delivered on 19th February 1936 but may have been published a few months later. It is true that there is no estoppel against statute or law The reason is obvious. Every one is supposed to know the law and he, therefore, cannot be said to have been misled on a question of law, but we do not consider that the declaration made by Lalta Prasad can be said to be a declaration on a question of law. There is nothing to indicate in the document itself that Lalta Prasad correctly gave all the facts and therefore did not mislead the mortgagee. It may be that Lalta Prasad when he said that he was not an agriculturist honestly believed that because he had been assessed to income-tax in the year 1934-35 he was not protected. Even if he was labouring under an honest mistake of law, we do not think that he can take any advantage of his own mistake. Lalta Prasad, however, does not state that he was labouring under any misapprehension or mistake of law. His case was that the plaintiff had assured him that because he had some house property in Ranikhet he was not an agriculturist. This statement of his was not accepted by the Court below, and we are not prepared to differ from the lower Court on the point. The fact, therefore, remains that the mortgagors by their declaration intentionally caused the mortgagee to believe that Lalta Prasad was not an agriculturist and the mortgagors would not be entitled to the benefit of the Agriculturists' Belief Act. They will therefore be not allowed to deny the truth of the fact that Lalta Prasad was not an agriculturist. In this view of the matter the mortgagors will not be entitled to the benefit of the Agriculturists' Relief Act. Learned Counsel for the appellant has, however, cited before us the cases reported in Moti Chand v. Khwaja Ikramullah Khan ('16) 3 A.I.R. 1916 P.C. 59, Bithal Das v. Baghunath Das ('22) 9 A.I.R. 1922 All. 430 and Makund Lal v. Mt. Sunita : AIR1931All461 .
6. In Moti Chand v. Khwaja Ikram-ullah Khan ('16) 3 A.I.R. 1916 P.C. 59 a suit was brought to recover damages for breach of an agreement in a sale deed under which the defendants had agreed to relinquish certain sir rights. Their Lordships of the Privy Council held that such an agreement being contrary to the provisions of the North Western Provinces Tenancy Act (2 of 1901), no suit for damages for breach of such an agreement would lie. The case in Bithal Das v. Baghunath Das ('22) 9 A.I.R. 1922 All. 430 was also a case of an agreement to surrender sir and khudkasht rights, and the case in Makund Lal v. Mt. Sunita : AIR1931All461 related to a suit for recovery of money on the basis of a mortgage of occupancy holding which was held to be void under Section 23, Contract Act. None of the three cases therefore has any bearing on the point of estoppel raised before us. The fact that the defendants are not entitled to the benefit of the Agriculturists' Relief Act, however, does not conclude the matter. The U.P. Debt Redemption Act (13 of 1940) was not passed till December 1940 and the fact that the defendants said in 1936 that Lalta Prasad was not an agriculturist would not bar them from pleading that the defendants were agriculturists at the time when the Debt Redemption Act was passed. It is not necessary under the Debt Redemption Act, when the money is recoverable from the property of the mortgagors, to prove that the mortgagors were agriculturists on the date of the loan, (see the Full Bench decision reported in Ketki Kunwar v. Ram Saroop ('42) 29 A.I.R. 1942 All. 390.)
7. It was urged that the mortgage having been executed on 18th March 1936 and the suit having been brought on 5th March 1941 within six years of the date of the execution of the mortgage, the plaintiff had a right to get a personal decree against the mortgagors and it could not be said that the amount was recoverable only from the property of the mortgagors. This suit was brought on the basis of the mortgage for a decree for sale and the plaintiff has got a decree for sale. He cannot therefore now proceed against the person of the mortgagors without selling up the mortgaged property, and after he has sold up the mortgaged property he would be, by reason of Section 21, Debt Redemption Act, debarred from claiming a personal decree under Order 34, Rule 6, Schedule 1, Civil P.C. 1908. The plaintiff's remedy is thus confined only to a right of sale of the mortgaged property and the Full Bench decision quoted above fully applies. In that view of the matter, the defendants are entitled to the benefit of Section 9, U.P. Debt Redemption Act, 1940, and the plaintiff cannot claim interest at a rate higher than 4 1/2 per cent. per annum simple interest and the amount due by the defendants cannot exceed the principal sum due. The defendants are not alleged to have made any payment.
8. We, therefore, modify the decree of the Court below and pass a decree in the plaintiff's favour under Order 34, Rule 4, Civil P. C., in the following terms: The plaintiff will be entitled to a sum of Rs. 8000 with simple interest at 4 1/2 per cent. per annum from 18th March 1936 up to date. The plaintiff will also be entitled to proportionate costs in both the Courts. The plaintiff will further be entitled to interest at the rate of 3 per cent. per annum simple on the principal, interest and costs, up to the date fixed for payment which will be six months from this date. In case the defendants pay into Court on or before the date fixed, that is, six months from the date of this decree, the plaintiff shall deliver up to the defendants or to such person as the defendants appoint all documents in his possession or power relating to the mortgaged property. If however the payment of the amount found due or declared due under this decree is not made on or before the date so fixed, the plaintiff shall be entitled to apply for a final decree for sale under Order 34, Rule 5, Civil P.C. Future interest after the expiry of six months will be on the aggregate sum found due on that date for principal, interest and costs at the rate of 3 per cent, per annum simple. The defendants will bear their own costs in both the Courts.