1. This is a defendant's appeal from the decision of the learned Civil Judge, Dehra Dun decreeing the plaintiff's suit for the enforcement of a mortgage bond. The facts are these. The plaintiffs Harnam Dass, Ramanand and Vishwanath alleged that the first defendant Bawa Takhat Singh (the fourth respondent in this appeal) mortgaged several properties in their favour as security for a sum of Rs. 9,000 borrowed by him. The properties were in Pakistan except one house in Mussoorie known as Oakleaf. The mortgage deed was executed at Lahore on 28-4-1939 and registered at the office of the Sub-Registrar. An entry was also made in the register of the District Registrar of Saharanpur and, the sub-Registrar of Mussoorie. Under the terms of the loan interest was fixed at one rupee per cent per mensem simple, and the entire amount together with interest was payable on demand.
2. The plaintiffs alleged that they instituted a suit for the enforcement of the mortgage in the Court of the Sub-Judge First Class, Lahore in 1947 but were forced to migrate to India after the outbreak of communal disturbances, and consequently the suit was dismissed for default under Order 9, Rule 3, Civil P. C., on 7-4-1948. They also alleged that the original mortgage deed had to be filed in Court in Pakistan in connection with some litigation between the mortgagors and mortgagee and was not available; hence a copy of it was filed with the plaint in this suit. The plaintiffs also stated that the mortgage was in favour of one of the brothers Purshottam Dass (the second defendant) but it was the joint property of Purshottam Dass and the plaintiffs, and under a subsequent partition the amount due under it was allotted to the share of the plaintiffs. The third, fourth, fifth, sixth and seventh defendants were impleaded as subsequent transferees of the property in suit as they were interested in the equity of redemption.
The plaintiffs alleged that the mortgagor had made no payment whatsoever either on account of principal or interest and that a sum of Rs. 11,880 had accrued as interest. Adding a sum of Rs. 120 as expenses incurred for compulsory registration of the mortgage deed, the plaintiffs claimed a sum of Rs. 21,000 as due to them. However, as only the Kothi called Oakleaf in Mussoorie was within the-jurisdiction of the Court and all others situate in Pakistan, they asked for a decree under Order 34, Rules 4 and 5, Civil P. C., for the sale of this property. The suit was contested only by the 6th and 7th defendants who were the transferees of the original mortgagors. The other defendants did not even file a written statement. However the second defendant, who is a brother of the plaintiffs, appeared and supported the plaintiffs' suit and filed a written statement to this effect. He also gave evidence in favour of the plaintiffs. The 7th defendant also pleaded that he was a bona fide transferee for value without notice and, in the alternative, entitled to marshalling under Section 56 of the Transfer of Property Act.
2. The learned Civil Judge rejected all the pleas of the defendants. He held that the present plaintiffs had acquired the right to recover this loan under a partition award, that the suit was not barred, that the mortgage was for consideration, that the 7th defendant was not a transferee without notice and that he could not claim the right of marshalling as this would prejudice the plaintiff's rights as mortgagees. Accordingly he decreed the suit for Rs. 20,880 with proportionate costs and interest pendente lite and future at 12 per cent. per annum on the principal amount till six months from the date of decree, and thereafter at 3 per cent. The first defendant and defendants 3 to 7 were directed to pay the amount of the decree within six months, and in case of their default a final decree was directed to be passed after six months and the plaintiffs held entitled to realise the decretal amount by the sate of the property. Against this decision the sixth defendant, one of the transferees of the mortgagor, has come to this Court in appeal.
3. Mr. G.P. Bhargava, learned counsel for the appellant urged the following arguments in support of this appeal ; that the plaintiffs had no right to sue as the partition award allotting this claim to them had not been made a decree of the Court; that the mortgage deed was not a genuine document; that the execution of the mortgage had not been properly proved and the learned Judge should have admitted secondary evidence in proof; that the appellant was a transferee for value without notice; and that in any case he was entitled to the right of marshalling. We have heard learned counsel at some length but we see no reason to differ from the view of the learned Judge before whom all these arguments were advanced.
4. Mr. Bhargava contended that the plaintiffs-were not entitled to claim any rights under the partition award as it had not been made a decree of the court. Learned counsel cited a number of authorities in support of his argument that an award should be made a decree of the court before it can be enforced, but they are not applicable to the present case because no question of the enforcement of an arbitration award arises. This is a case where members of a joint family agreed to partition their property in terms of an award made by arbitrations. The partition was effected a long time ago and the parties concerned have not challenged it. In all the cases cited by learned counsel the award was challenged by one of the patties to the arbitration proceedings, but we do not think that a stranger can challenge an award when the parties have submitted to it and carried out the partition according to its terms. Learned counsel submitted that if the award is not converted into a decree of the Court, even a third party may challenge its validity in collateral proceedings. We cannot take this argument seriously. If the members of a joint family have agreed to partition the property in terms of an award and the partition has been completed, it is not for any third person to question the method of doing it. If the parties accept the terms of the award, the partition is by agreement, and therefore valid, even if the award could not have been enforced.
5. Learned counsel then argued that the execution of the mortgage was not properly proved. He repeated the arguments which were advanced before the trial court and rejected by it. Learned counsel contended that the plaintiffs were guilty of neglect in having left the original mortgage deed in the custody of the Pakistan court, but this argument is without substance. As observed by the learned Judge the plaintiffs were entitled under Section 65(a) of the Act to, produce secondary evidence of the mortgage deed' because the original was in the custody of a person beyond the jurisdiction of the Court at the relevant time.
6. Learned counsel then contended that the mortgage deed was not genuine and without consideration. But this argument was not supported by any substantial evidence and we agree with the findings of the trial court on this point. We took the precaution of examining the original letter of the Punjab National Bank, Lahore Exhibit 1 which proved that the cheques paid to the original mortgagor were duly cashed. Learned counsel did not challenge the genuineness of the document.
7. Next Mr. Bhargava contended that the appellant (the 6th defendant in the suit) was a transferee for value without notice and, therefore, not liable under the mortgage deed. The trial court has dealt with this argument and rejected it, and we see no reason to differ from its finding. An entry with regard to the mortgage deed was made in the registers of District Registrar at Saharanpur and Sub-Registrar at Mussoorie and the appellant must be deemed to have had notice of the encumbrance.
8. Mr. Bhargava then argued that the appellant was entitled to the right of marshalling, but this argument was also rejected by the trial court and we think rightly on the ground that the marshalling could not be done without prejudicing the rights of the mortgagee as all the other properties were now situate in Pakistan.
9. Lastly, Mr. Bhargava contended that the interest was excessive and he asked this Court to reduce it under the Usurious Loans Act. But the trial court held that the rate of interest was not excessive. We do not think that 12 per cent per annum simple interest is excessive.
10. No other point was urged. The appeal fails and is dismissed with costs.
11. The plaintiff respondents have filed a cross-objection against the decision of the trial court granting them interest at the rate of 3 per cent per annum only after the expiry of six months from the date of the decree. Learned counsel for the respondents argued that interest should have been at least at the rate of 6 per cent per annum. But this was a matter within the discretion of the trial court and no material has been placed before us to persuade us that the discretion has been improperly exercised. The cross objection must be dismissed with costs.
12. Stay order passed by this Court is discharged.