Skip to content


Muhammad Zakariya Vs. Muhammad Hafiz and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported inAIR1917All17(2); 41Ind.Cas.233
AppellantMuhammad Zakariya
RespondentMuhammad Hafiz and ors.
Excerpt:
.....xxxiv, ruls 2, 4 - mortgage--covenant to pay principal and interest-suit for interest--subsequent suit for principal, whether barred--'cause of action', meaning of--two suits for sale on same mortgage, whether permissible. - - clause 7, which is in common form, provides that after the expiration of three years the creditor shall be entitled to sue for the whole amount of principal and interest if failure is made to pay the amount of the bond with interest within that time. they would have to prove precisely the same facts if they were suing for the principal. i am not pre-prepared to say that if the plaintiffs had clearly put forward their interpretation of the document as a necessary part of the claim which they were making in the previous suit, and their explanation of the form of..........4 of order xxxiv of the code of civil procedure. the object of these rules seems to be that in any suit for sale on a mortgage, an account should be taken once and for all, of the amount due-for principal and interest on the mortgage.' two successive suits for sale on one and the same mortgage should be an impossibility. i do not believe it to be possible for parties to draw up a contract of mortgage so drafted as to avoid these statutory obligations; but in any case they have not done so on the wording of the document in suit, or on the facts of this particular case. when the suit of 1914 was instituted there was no room for the contention that the entire mortgage-debt, both principal and interest, was not due.'7. if, however, in the suit of 1914, the plaintiffs had in plain terms.....
Judgment:

Walsh, J.

1. I have come to the conclusion that this appeal must be allowed. The suit is one to recover the principal due, the interest being abandoned under circumstances which I will mention in a moment, and for the sale of the property hypothecated under a bond, dated the 14th of September 1910. The plaintiffs in April 1914 had brought a suit against the defendant for interest for three years and seven months due from the date of the bond, namely, the 14th September 1910 to the 14th of April 1914, the date of the suit. That action had been brought and determined after the expiration of the period of three years from the date of the bond, three years being the period stipulated for the re-payment of the money; and the question which arises in the present suit, raised by the defendant and decided against him by the learned Subordinate Judge, is whether having regard to the provisions of Order II, Rule 2 of the Code of Civil Procedure, and of this particular bond, the plaintiffs can, after having sued for the interest in the way which I have mentioned, nonetheless institute a fresh and a subsequent suit for the principal. The question really turns on the view we take of the meaning of Order II, Rule 2, and of the provisions of this particular bond. The preliminary clause of the bond recites the advance of the money and promise of the obligor to re pay within three years at a stipulated rate of interest. Clause 7, which is in common form, provides that after the expiration of three years the creditor shall be entitled to sue for the whole amount of principal and interest if failure is made to pay the amount of the bond with interest within that time. If that clause providing for re-payment of principal and interest and for the right of the creditor upon default stood alone, there would be, in my opinion, no doubt at all that claims for principal and interest would be clai us which the plaintiffs were entitled to make within the meaning of Order II, Rule 1. The provision of that Rule is that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action.' The meaning of the expression 'cause of action' has long been judicially settled and finally pronounced in the Courts in England in Bead v. Brown (1889) 22 Q. B. D. 128 : 58 L. J. Q. B. 120 : 60 L. T. 250 : 37 W. R. 131. and adopted by a Full Bench of this Court in Murti v. Bhola Ram 16 A. 165 : A. W. N'. (1894) 65 : 8 Ind, Dec (N.S.) 106. a decision which is binding upon us, to mean every fact necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. This definition obviously involves in it the addition made by Lord Justice Fry in Bead v. Brown (1) 'everything which if not proved gives the defendant an immediate right to judgment.' Applying that definition to this case, the plaintiffs in order to recover the interest would have to prove the execution of the bond, the advance although of course that would be involved in the bond, unless there was some circumstance calling upon them to do it, the terms of the bond, and the right to recover interest under Clause 7, namely, the nonpayment of the principal. They would have to prove precisely the same facts if they were suing for the principal. And I feel constrained to hold that if Clause 7 stood alone, the application of Order II, Rule 2, would compel the plaintiff to include both principal and interest in one suit, being the whole of the claim which he was entitled to make in respect of the cause of action. It is quite true that one or two authorities which are entitled to great respect have been relied upon by Dr. Sapru for the respondents, which throw doubt upon the correctness of this view. It is sufficient to say that in each of these oases, namely, Yashvant v. Vithal 21 B. 267 : 11 Ind. Dec. (N. S.) 181. and Barn Bhaj v. Devia 123 P. R. 1881. the circumstances of the contract were not the same as that before us, and the ratio decidendi proceeds upon a consideration of English authorities which are not really relevant to this point, inasmuch as the provision we are now considering does not occur, so far as I am aware, in any express provision of English Law. It should be observed that no injustice is contemplated or really can occur by the application of this provision, because any result of that kind is carefully guarded against by the further provision which enables the Court in a proper case upon the application of the plaintiff to allow him to pursue one or other of his claims and to suspend the other. We have, however, to give effect to all the provisions of this document and in interpreting it as a whole, to examine each independent provision relied upon in support of the plaintiff contention. It is argued on behalf of the respondents that even if Order II, Rule 2, has the effect which we think it has, Clause 2 of the bond enables them to do what they did here. I do not agree. I think the meaning of Clause 2 is quite clear. It gave the creditor an additional right inconsistent with that contained in Clause 7, and was, therefore, a modification of that clause. I think that it relates only to the period between the expiration of six months from the date of the bond and the expiration of three years from the date of the bond. And all that Clause 2 does is to confer upon the creditor an option to do two things during that period which otherwise he could not do. One is to sue for the principal within three years, secondly, to sue for interest without suing for the principal. I think this is the only possible construction which can be read consistently with Clause 7. The respondents' contention makes Clause 7 superfluous, and this is the error we think the learned Judge below, who agreed with the respondents', view, fell into. Clause 7 is the basis of the contract, Clause 2 provides for a special contingency and confers special rights, Clause 3 merely as the result of Clause 2 defines the rights given by Clause 7 and provides that the rate of interest and mode of payment shall be the same and are not to be affected by the provisions of Clause 2.

2. The result may seem somewhat startling. The defendant out of a debt of Rs. 14,000 with considerable accumulation of interest has re-paid only Rs. 3,000, and the learned Judge, being in a difficulty with regard to the authorities, not unnaturally took a view which lie thought was in accordance with the justice of the case But if the law is clear, we have no right to consider the consequences, and it is to be borne in mind, as already observed, that the plaintiffs might have protected themselves against such consequences by an ordinary application such as that indicated in the last Clause of Order II.

3. A further contention has been raised on behalf of the respondents which creates] a certain amount of difficulty. I am not pre-prepared to say that if the plaintiffs had clearly put forward their interpretation of the document as a necessary part of the claim which they were making in the previous suit, and their explanation of the form of the claim, in such a way that the defendant ought to have but did not contest it, it might not be held that the parties were bound by that view of their own contract whatever the general law might otherwise be. But when the proceedings in the first suit are carefully examined, it is clear that nothing of the kind really occurred when the plaintiffs were, so to speak, cutting down their claim to a claim for interest. In the plaint in the previous suit they said that Rs. 3,010 were due on account of interest in respect of which only the claim was brought according to the terms of the bond. That was a correct statement of a claim for interest. In paragraph No. 5 of the plaint they stated that they were entitled to realize only the amount of interest due under this bond without instituting a suit in respect of the principal. That was a perfectly innocuous and accurate statement. In paragraph No. 6 they alleged that they were entitled to bring the property to sale subject to the principal and the remaining amount of interest due on the bond. Nowhere did they allege that they still had a right, be claimed to have a right, or intended to pursue such right, to sue for the principal at a subsequent date. And inasmuch as the defendant did not appear and put in no written statement, it is impossible to hold that any issue as to the construction of the bond on this point was raised and determined in that suit, or that the plaintiffs compelled the defendant to plead to the point. Furthermore, the Court rightly and carefully decided the plaintiffs' suit in the proper from, that is to say, gave a decree for sale of the mortgaged property in respect. of the amount claimed in the suit, but made no decree in the form claimed by the plaintiffs indirectly in paragraph No. 6 of the plaint; so that even if it could be said that the plaintiffs raised the point in the former proceeding, the Court left it entirely undecided. As a matter of fact the place and time to determine such a point is on a proper application by the plaintiff to abandon a part of his claim and to have it decided by the Court before the suit is finally entertained.

4. Two further observations may be made. It is a remarkable circumstance that in view of the fact that the original suit for Rs. 3,010 was brought by these plaintiffs for interest only, they should in the suit now before us have expressly-abandoned any claim for interest on conscientious grounds; secondly, it by no means follows from this decision, nor indeed does Order II appear to provide, that the liability for the principal is extinguished, and it may be that any view of the justice of the case may be reconciled by a subsisting liability from the defendant to the plaintiffs to pay interest so long as the principal is outstanding. As to this I express no opinion. The parties can, if so advised, raise that question in another suit.

5. The result is that we allow this appeal, set aside the decree of the Court below and dismiss the plaintiffs' suit with costs here and in the Court below.

Piggott, J.

6. While concurring generally in the above judgment I desire to add a few remarks. In the suit of 1914 the plaintiffs asserted that they were entitled to bring the mortgaged property to sale, 'subject to the principal and the remaining amount of interest due under this bond.' I am clearly of opinion that such a claim could not be sustained, in view of the provisions of Rules 2 and 4 of Order XXXIV of the Code of Civil Procedure. The object of these rules seems to be that in any suit for sale on a mortgage, an account should be taken once and for all, of the amount due-for principal and interest on the mortgage.' Two successive suits for sale on one and the same mortgage should be an impossibility. I do not believe it to be possible for parties to draw up a contract of mortgage so drafted as to avoid these statutory obligations; but in any case they have not done so on the wording of the document in suit, or on the facts of this particular case. When the suit of 1914 was instituted there was no room for the contention that the entire mortgage-debt, both principal and interest, was not due.'

7. If, however, in the suit of 1914, the plaintiffs had in plain terms claimed the relief to which they said they were entitled, namely, a decree for the sale of the mortgaged property subject to the principal debt due on the same bond, and to any further interest that might accrue due under the same, it might with some force be contended that an obligation would thereby have been cast on the defendant-mortgagor of resisting this claim. A defendant who deliberately elects to enter no defence against an improper claim, or one legally unsustainable, cannot complain if in a subsequent litigation he finds himself caught by the Rule of res judicata.

8. I do not find any such Rule to be applicable in the present case. When we come to look at the plaint in the suit of 1914, we find that the plaintiffs carefully refrained from including this inadmissible relief, to which they said they were entitled, in the specification of the reliefs actually claimed What they asked for was simply that the amount due may be awarded, with interest pendente lite and future interest: otherwise the property mortgaged may be sold by auction.' This claim the defendant obviously could not resist: the amount claimed was due from him and the mortgaged property was liable lo be sold in satisfaction of the debt. I do not see that any obligation was cast on the defendant of warning the plaintiffs as to the probable consequences of their claiming a decree for a much smaller amount than was due to them on the date of the suit. The Court decreed the claim as brought; that is to say, the decree passed was for the sale of the mortgaged property and not of the equity of redemption of a subsisting mortgage of Rs. 14,000.

8. Under these circumstances I agree with my learned colleague that a second suit for sale on the same mortgage is not maintainable.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //