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Gulab Chand and anr. Vs. Mansab Ali - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad High Court
Decided On
Judge
Reported in(1888)ILR10All85
AppellantGulab Chand and anr.
RespondentMansab Ali
Excerpt:
.....on account should be endorsed upon it, and that no unendorsed credits should be claimed by syed mansab ali, no payments have been endorsed on the instrument. i shall cause the payments i make to be endorsed on this document, and if i, the declarant, claim any payment not entered on the back of this document, such claim shall be false and untenable. the damages are claimed in respect of the breach of a contract in writing registered within the meaning of article 116 of the second schedule of the indian limitation act, 1877, and, unless section 23 applies, the period of limitation is six years from the date of the breach (see articles 116 and 115 of the second schedule to the indian limitation act, 1877). it cannot be said that there were here successive breaches within the meaning..........1885, upon a registered hypothecation bond, dated the 5th january 1868, executed by the defendant syed mansab ali in favour of the plaintiff gulab chand and one beni prasad, who was the agent of the plaintiff's firm of babu lal and shankar lal of banda. the defendants yad ali, karam ali, the sons of mir syed ali, deceased, and musammat khair-ul-nissa, the widow of mir syed ali, were made defendants, as they laid claim to the hypothecated property, alleging that it was purchased by mir syed ali for himself, although in the name of his eldest son, the defendant syed mansab ali. the defendants baldeo, hazari and chote are the representatives of beni prasad mentioned in the hypothecation bond in suit. the defendants baldeo, hazari and chote admitted, by their written statement filed on the.....
Judgment:

Edge, C.J. and Tyrrell, J.

1. This is an appeal by Syed Mansab Ali, one of the defendants, from the decree of the Subordinate Judge of Banda, dated the 31st July 1886. The action was brought on the 24th November 1885, upon a registered hypothecation bond, dated the 5th January 1868, executed by the defendant Syed Mansab Ali in favour of the plaintiff Gulab Chand and one Beni Prasad, who was the agent of the plaintiff's firm of Babu Lal and Shankar Lal of Banda. The defendants Yad Ali, Karam Ali, the sons of Mir Syed Ali, deceased, and Musammat Khair-ul-nissa, the widow of Mir Syed Ali, were made defendants, as they laid claim to the hypothecated property, alleging that it was purchased by Mir Syed Ali for himself, although in the name of his eldest son, the defendant Syed Mansab Ali. The defendants Baldeo, Hazari and Chote are the representatives of Beni Prasad mentioned in the hypothecation bond in suit. The defendants Baldeo, Hazari and Chote admitted, by their written statement filed on the 21st December 1885, that in the transaction in question Beni Prasad was merely the agent of the plaintiffs' firm, and that the money secured by the bond was the money of the plaintiffs' firm. In the bond in question Beni Prasad is described as the gomashta of the firm of Babu Lal and Shankar Lal at Banda. The plaintiffs claimed as against the defendants Syed Mansab Ali, Yad Ali, Karam Ali, and Musammat Khair-ul-nissa, payment of Rs. 2,300 principal money and Rs. 10,483-11 as interest from the 5th January 1868, to the 20th November 1885, further interest during suit and until payment, and costs, and in default of payment foreclosure and possession. The defendant Syed Mansab Ali in the first and second paragraphs of his written statement raised a defence which depended on the construction of the bond: that defence has not been supported by any argument on appeal before us. We agree with the judgment of the Subordinate Judge on that point. Mansab Ali also pleaded that Beni Prasad was a creditor in fact under the bond to the extent of one-half. That contention was not pressed before the Subordinate Judge and has not been raised before us. He also pleaded payment and an adjustment of the account. The defendants Yad Ali, Karam Ali and Musamrnat Khair-ul-nissa pleaded that the hypothecated property was purchased by Mir Syed Ali with his own moneys; that the defendant Syed Mansab Ali only managed the cultivation and collections and the Court business; that Mir Syed Ali was the real owner of the property, and that Syed Mansab Ali had no power to mortgage the share of the pleading defendants. They also pleaded an arbitration and award of 1863, and that the Settlement Officer had affirmed in 1875 their right to have their names entered in the register as proprietors.

2. The Subordinate Judge found on all the substantial issues in favour of the plaintiffs and made a decree in their favour as against the defendants Syed Mansab Ali, Yad Ali, Karam Ali, and Musamrnat Khair-ul-nissa. From that decree the defendant Mansab Ali has brought the present appeal, and from it the defendants Yad Ali, Karam Ali, and Musamrnat Khair-ul-nissa have brought a separate appeal. The two appeals came on together to be heard by us.

3. On the question as to whether the defendant Syed Mansab Ali was the purchaser on his own behalf, and, at the date of the hypothecation sued on, the sole proprietor of the property hypothecated by that bond, we find in favour of the plaintiffs, agreeing substantially with the reasons and conclusions of the Subordinate Judge. The sale-deed of the 3rd January 1860, is evidence of a sale to the defendant Syed Mansab Ali as the sole vendee. This deed might not be conclusive evidence on the point. The proceedings of the Collector's Court of Hamirpur of the 12th March 1860, of the holding of which notice must have been previously given, refer to the defendant Syed Mansab Ali as the purchaser of the 10 annas 8 pies share in question. Dewan, one of the vendors of the 3rd January 1860, has proved that the sale was made to the defendant Syed Mansab Ali alone, that there was no other purchaser, and that Syed Mansab Ali paid the price and got possession. The mortgage-deed of the 22nd June 1866, the conditional sale-deed of the same date, and the sale-deed of the 11th December 1869, show that the defendant Syed Mansab Ali was dealing with the property in question as the sole vendee and owner of it, and this subsequently to the alleged award of the 10th July 1863. The witnesses Pershad and Gauri Shankar prove that for several years the defendant Syed Mansab Ali was the person who was in possession of the property in question.

4. The evidence of the defendant's witness Jagannath, where he says that Mir Syed Ali gave the purchase-money to Basant, is contradicted by Dewan, one of the vendors, who says that it was Syed Mansab Ali who paid the price. We believe the witness Dewan. The evidence of the defendant's witnesses, Jagannath, Dhamna and Umrao, as to the persons who made the collections is at variance with the written statement of the defendants Yad Ali, Karam Ali and Musamrnat Khair-ul-nissa, in which they say that Syed Mansab Ali managed the cultivation and collections and the Court business, and is contradicted by the evidence of Gauri Shankar, and inferentially by that of Dewan and Pershad. The defendants have relied upon the report of the Tahsildar of pargana Mahoba of the 13th October 1875, and the order passed on the 6th November 1875 (documents Nos. 147 and 148). The observation which we make as to these documents is that there is nothing to show that the plaintiffs were aware of the application referred to in them, and that it is more than probable that that application was collusively made with the object of providing evidence to defeat the rights of the plaintiffs which had accrued four years previously, that is to say, in 1871. The defendants tendered in evidence before us a document alleged to be a copy of an award made on the 10th July 1863. We rejected this evidence on the ground that it was not proved to our satisfaction that any such award was made, and that the absence of the original, if made, was not satisfactorily accounted for. The story as to the loss of the original document and that of the other instrument referred to in the Subordinate Judge's judgment, and the finding of the pieces, appeared to us to be too' suspicious to be acted upon by us. No arbitration agreement was produced although Sarfaraz Husain, a witness for the defendants, had stated that it remained with the Kazi. Besides, no such agreement to refer or award is alluded to in the deed of agreement, dated the 1st November 1878, executed by the defendants Syed Mansab Ali, Yad Ali and Karam Ali, by which disputes as to property, including the property in question, were referred to arbitration. The evidence of the defendant's witnesses as to what was the subject and scope of the alleged arbitration and the nature of the alleged award we have rejected on the ground that the alleged agreement to refer and the alleged award have not been produced, and the absence of those documents has not been satisfactorily accounted for. As to the defence of payment, we agree entirely with the finding of the Subordinate Judge and his reasons. Further, if the evidence as to the payment is to be credited, the defendant Mansab Ali within two years after the execution of the bond made payments which were more than sufficient to discharge the principal and interest then due. No receipt has been produced, and although the bond provides that all payments on account should be endorsed upon it, and that no unendorsed credits should be claimed by Syed Mansab Ali, no payments have been endorsed on the instrument. If the payments had been made, it is inexplicable that the mortgagor would have allowed the mortgagees to retain possession of the bond from 1870 to the present day. As to the paper No. 43, the Court below properly rejected it as evidence, as we also have done.

5. Finding as we do, for the reasons which we have already stated, that the property hypothecated by the deed of the 5th January 1868, was the separate property of Syed Mansab Ali, and that the principal and interest made payable by that deed are still due and unpaid, it remains to be considered to what extent the claim of the plaintiffs is to be decreed.

6. It is clear that the plaintiffs are entitled to the principal, together with interest at the agreed rate of Rs. 2-2 per mensem for three years and six months from the date of the execution of the bond, the 5th January 1868, up to the 30th of June 1871. It is not disputed that this at least is the legal construction of the bond and the result of our findings on the facts. The plaintiffs, however, claim to be entitled in addition to interest from and subsequent to the 30ch June 1871. They contend that by the bond itself such additional interest is expressly made payable, or that we should infer from the wording of the bond that it was the intention of the parties that interest should be payable until the principal should have been repaid, or that the plaintiff's are entitled to damages for the non-payment on the 30th June 1871, of the principal and interest then due, and that such damages may be awarded for the period of six years immediately prior to the commencement of this action. This latter contention was based on the further contention that the non-payment of the principal and interest on the agreed date constituted a continuing breach, giving a continually renewed cause of action from day to day from that date up to the commencement of the action. As we read the authorities, interest as interest cannot be allowed on money lent in India on a hypothecation bond, or on a deed of conditional sale, unless it appears from the bond or deed that it was the intention of the parties that interes should be payable, and then only for the period during which it so appears that it was intended that interest should be payable. The principal authorities on this point are collected in the notes at pages 113 and 114 of Macpherson's Law of Mortgage in British India, 7th ed. In the case of Cook v. Fowler, L. R., 7 H. L., 27, it was decided in the House of Lords, (so far as the law in England is concerned) that in a contract for the payment of money borrowed for a fixed period on a day certain, with interest at a certain rate down to that day, a further contract for the continuance of the same rate of interest after that day until actual payment is not 'to be implied, unless there is something to justify it upon the words of the particular instrument; and that although in cases of this class interest for the delay of payment post diem ought to be given, it is on the principle, not of implied contract, but of damages for a breach of contract.' See Lord Selborne's judgment in that case.

7. The mortgage-deed in question, so far as it bears upon this question, is as translated in the following words: 'I therefore declare and write that I shall without any objection discharge and pay in full the principal with interest at the rate of Rs. 2-2-0 per cent, per mensem within three years and six months from the date of the execution of this bond up to the 30th June 1871. All the payments made by me, the executant, to the said mortgagees at each harvest and in each year shall first be applied to the payment of interest, and the balance, if any, shall be carried towards the satisfaction of the principal. I shall cause the payments I make to be endorsed on this document, and if I, the declarant, claim any payment not entered on the back of this document, such claim shall be false and untenable. If the mortgage-money together with interest be not paid in full within the stipulated time, then under this document the mortgage on the property hypothecated by me shall be foreclosed, and the mortgagees shall be at liberty to take proprietary possession of my the executant's share.' There is here obviously no express agreement to pay interest post diem, and we are of opinion that no such agreement can be implied from this deed. As we read the deed, the expressed intention of the parties was that if on the 30th of June 1871, the principal and interest then due were not paid, the mortgagees should be entitled to foreclose for the principal and interest due and unpaid on the 30th of June 1871, and not for any interest post diem. In our opinion, the wording of the deed negatives any such implication as that contended for on behalf of the plaintiffs. Whether or not the plaintiffs are entitled to have damages awarded to them for the non-payment of the principal and interest on the 30th June 1871, must depend on whether or not Section 23 of the Indian Limitation Act, 1877, applies to this case. The damages are claimed in respect of the breach of a contract in writing registered within the meaning of Article 116 of the second schedule of the Indian Limitation Act, 1877, and, unless Section 23 applies, the period of limitation is six years from the date of the breach (see Articles 116 and 115 of the second schedule to the Indian Limitation Act, 1877). It cannot be said that there were here successive breaches within the meaning of Article 115. The contract was to pay the amount due on the 30th June 1871, if not previously paid, and on the failure to pay on the day appointed the breach of the contract was committed. There are many contracts of which there may be successive breaches, as for instance contracts by which a party to the contract agrees to do or to forbear doing two or more different things: in such contracts the contracting party may commit several breaches by not doing those things which he has contracted to do, or by doing those things which be has contracted not to do. The contract under consideration was to do one thing; that was to pay the amount due on or before the 30th June 1871, and on the non-payment of the money on the day appointed the breach of the contract was committed. It cannot, in our opinion, be said that there was here a continuing breach. A covenant for title is an instance of a contract of which; according to the English law, there may be continuing breaches. So is a covenant to maintain a building in repair. There is a breach of the covenant for title so long as an adverse title exists, and there is a breach of a covenant to maintain a building in repair so long as the building is out of repair. To take another example from the English law, the period of limitation prima facie begins to run on a promissory note payable on demand from the date of the note, the debt being payable without any demand, and the non-payment of the note is not, according to English law, a continuing breach which extends the period of limitation. The Indian Limitation Act specifically provides for the period of limitation for bringing an action on a promissory note payable on demand, but this fact does not make the illustration from the English law the less apposite. We are clearly of opinion that the breach of agreement here took place on the 30th of June 1871, and that there was no continuing breach within the meaning of Section 23 of the Indian Limitation Act, 1877. Taking this view of the law, we must hold that the claim of the plaintiffs to compensation for breach of the agreement is barred by Article 116 of the second schedule of the Indian Limitation Act, 1877, and must be disallowed. The result is that a decree as against the defendant Syed Mansab Ali will be drawn up in accordance with Section 86 of the Transfer of Property Act, 1882, but limiting the amount to be paid to be Rs. 2,300 principal money and interest thereon at the agreed rate of Rs. 2-2-0 per mensem for three years and one-half, that is, from the 5ch January 1868, up to the 30th of June 1871, with proportionate costs and interest at the rate of Rs. 12 per centum per annum during the pendency of the suit, and at the rate of Rs. 6 per centum from the date of the decree until payment or the expiration of six months from the date of the decree, whichever shall first happen, and to this extent the appeal of the defendant Syed Mansab Ali is allowed with proportionate costs to him to be allowed in account.


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