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Bans Gopal and ors. Vs. Sheo Ram Singh and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in32Ind.Cas.95
AppellantBans Gopal and ors.
RespondentSheo Ram Singh and ors.
Excerpt:
.....the whole principal lent become due upon failure to pay interest at a certain time. the foreclosure was, as against hari narayan perfect on or before the 31st march 1873; the purchasers from him were not served with notice as required by the..........444. there can be very little doubt that this enactment led to the institution of many doubtful mortgage suits. it is not alleged that from the date of the mortgage to the institution of the suit any payment had ever been made upon foot of principal or interest secured by the mortgage. the plaintiffs were unable even to produce the original mortgage-deed, but no question on this point is before us in the present appeal. the claim is at least an exceedingly stale one. the court below has held the suit barred by limitation. the copy of the mortgage, which has been allowed to be given in evidence, will be found at page 7 of the appellant's book in first appeal no. 382 of 1911. the translation is not particularly accurate. it begins by a statement that the mortgagor has borrowed rs. 3,000.....
Judgment:

1. This appeal arises out of a suit for foreclosure of a mortgage said to have been made on the 25th of February 1866. The principal sum alleged to have been secured wag Rs. 3,000. The interest claimed is Rs. 16,000: in all Rs. 19,000. The suit was instituted in August 1910, a few days before the expiration of the special period of grace allowed by Section 31 of the Limitation Act, IX of 1908. This provision was passed in consequence of the injustice supposed to be likely to occur by reason of the decision of their Lordships of the Privy Council in the case of Vasudeva Mudaliar v. Srinivasa Pillai 30 M. 426 : 17 M L.J.444 : 4 A.L.J. 625 : 9 Bom. L.R. 1104 : 6 C.L.J. 379 : 11 C.W.N. 1005 : 34 I.A. 187 (P.C.); 2 M.L.T. 333 : 17 M.L.J. 444. There can be very little doubt that this enactment led to the institution of many doubtful mortgage suits. It is not alleged that from the date of the mortgage to the institution of the suit any payment had ever been made upon foot of principal or interest secured by the mortgage. The plaintiffs were unable even to produce the original mortgage-deed, but no question on this point is before us in the present appeal. The claim is at least an exceedingly stale one. The Court below has held the suit barred by limitation. The copy of the mortgage, which has been allowed to be given in evidence, will be found at page 7 of the appellant's book in First Appeal No. 382 of 1911. The translation is not particularly accurate. It begins by a statement that the mortgagor has borrowed Rs. 3,000 and has mortgaged the property for six years under conditions specified therein. The first clause provides that interest on the Rs. 3,000 at the rate of 1 per cent, per mensem should be paid every year in the month of Baisakh for six years. It goes on to provide that the mortgagor is to remain in possession and to pay the Government revenue. Clause 3 deals with redemption. Clause 4 provides that the mortgagor may make payments on account of principal in the manner specified therein, Clause 5 provides that if after the expiry of the six years anything remains due to the mortgagees, the mortgagees may forthwith enter into possession of the mortgaged property and realise the principal and interest. Clause 6 provides that the property shall not be transferred so long as any principal or interest remains unpaid and that if it is transferred, or if the money due to the mortgagees is not paid, the latter without waiting for the expiry of the six years may bring a suit to recover principal and interest and may also get possession by 'completion of sale.' The translation possession by foreclosure' is not strictly accurate. The real meaning is that the mortgagees will get the possession as that of a purchaser. It will be seen from the terms of this mortgage that the purchasers were to remain in possession until some (one or more) of the events mentioned in the deed occurred. This mortgage seems more like a simple mortgage' within the definition of such a mortgage in Section 58 of the Transfer of Property Act than a mortgage by conditional sale. Save for the words in Clause 6, the mortgagor does not appear ostensibly to sell' the mortgaged property, words which occur in the definition of a mortgage by conditional sale' as defined in the same section. The appellants contend that they were never entitled to get possession as owners' of the property until they had taken proceedings under Clause 8 of Regulation A VII of 1806, that they could not take any such proceedings until the expiration of six years from the date of the mortgage, that consequently time could not possibly begin to run against the mortgagees until the year 1872, that as the law stood at that time (in the year 1872) they had 12 years within which they might institute a suit for possession or take proceedings for foreclosure, that Act XV of 1877, Article 147, gave them a right to sue for foreclosure within 60 years of the time of the money becoming due, that on the passing of Act IV of 1882 (the Transfer of Property Act) proceedings under that Act for the realization of the mortgage debts were substituted for the provisions of Clause 8 of Regulation XVII of 1806, and that consequently their suit having been brought within the period prescribed in Section 31 of Act IX of 1908, the suit was within time.

2. We must mention here that both the events mentioned in the mortgage, which would give the mortgagee a right to possession as a purchaser,' happened in the year 1867. Part of the mortgaged property was transferred in July 1867, and as already mentioned, there has never been any payment on foot of principal or interest. The appellants contend that this can make no difference and rely upon the decision of their Lordships of the Privy Council in Kishori Mohun Roy v. Ganga Bahu Debi 23 C. 228 : 22 1. A. 183 (P.C.). It is true in that case their Lordships of the Privy Council held that 'the stipulated period' mentioned in Section 8 of Regulation XVII of 1806 was the particular period mentioned in the deed and that proceedings under that section could not be brought before the expiration of that period, even where there was a contract in the deed of mortgage making, without reference to redemption, the whole principal lent become due upon failure to pay interest at a certain time. We need hardly mention that the terms of the mortgage in the present suit are wholly different. Under Clause 6 the mortgagees were, in the events which have happened, entitled at once to bring a suit or get possession without waiting for the expiry of the stipulated period. Furthermore, the condition that the property shall not be transferred was very different from a mere stipulation that the money should become due if default was made in the payment of interest. The transfer of the property prejudiced the security for the loan. We think that under the circumstances of this case we must hold that time began to run in July 1867. Proceedings might then have been taken for possession in the Civil Court or for foreclosure under the Regulation within 12 years.

3. In principle the circumstances of the present case seem to be undistinguighable from the case of Srinath Das v. Khetter Mohun Singh 16 C. 693 : 16 I.A. 85 (P.C.); 13 Ind. Jur. 132 : 5 Sar. P.C.J. 315. In that case there was a mortgage, dated the 17th of November 1865. Proceedings had been taken under the Regulation in the year 1873 but only the mortgagor was served with the prescribed notices. The contending defendants who were purchasers from the mortgagor had not been served. Their Lordships state at pages 700: and 701 of the report: 'The inferences of fact which the Court is bound to draw from the evidence or the omission of evidence in the case appear to their Lordships to be as follows: the foreclosure was, as against Hari Narayan perfect on or before the 31st March 1873; the purchasers from him were not served with notice as required by the Regulation; they, therefore, remained unaffected by the proceedings, and the relationship of mortgagee and person entitled to redeem continued to subsist between Shama Sundari and them; the purchasers have continued in undisturbed possession since the time of their respective purchases: no interest has ever been paid on account of the mortgage debt; if any part of the principal has been paid in respect of any of the plots, the latest payment was made in August 1866; therefore, if Article 135 is the one applicable to the case, the 12 years there allowed ran out in the month of August 1878 at the latest.'

4. Their Lordships were referring to Article 135 of Act XV of 1877. That Article provides that a suit by a mortgagee for possession of immoveable property must be brought within 12 years from the time when the mortgagor's right to possession determines. The plaintiffs in the suit had been contending that Article 147 of the same Act was applicable to the case. That Article provides that a suit for foreclosure by a mortgagee might be brought within 60 years from the time when the money became due. It is quite clear that their Lordships held that Article 135 was the Article applicable. We think that the present appeal is concluded by this authority.

5. We may also refer to the cases of Shyam Chandra Singh v. Baldeo 17 Ind. Cas. 467 : 10 A.L.J. 522 and Ram Dawar Rai v. Bhirgu Rai 15 Ind. Cas. 240 : 10 A.L.J. 538, where numerous rulings are referred to. We think that the cause of action accrued to the plaintiff in July 1867, and consequently the present claim was barred within 12 years from the expiration of that date. We dismiss the appeal with costs including in this Court fees on the higher scale.


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