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Bohra Hoti Lal Vs. Mithu Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad
Decided On
Reported inAIR1935All421; 157Ind.Cas.675
AppellantBohra Hoti Lal
RespondentMithu Lal and ors.
Excerpt:
.....the mortgagee not to avail himself of this option and to wait for the full stipulated period of the..........j.1. this is a plaintiff's appeal and arises out of a suit for sale on the basis of a mortgage-deed dated 11th december 1918. the mortgage was executed by mithu lal defendant 1 in favour of one lachhmi chand and was for a sum of rs. 1,500. the agreed interest was at the rate of 10 annas per cent per mensem com-poundable with six-monthly rests. the debt was payable on the expiry of one year from the date of the execution of the mortgage-deed. but it was stipulated in the deed that:in the case of breach of covenant...and non-payment of a part or whole of the principal, interest and compound interest (the creditor) shall have the right to recover the amount due to him by filing a suit in court....2. it is common ground that default was made in the payment of interest on the expiry of.....
Judgment:

Iqbal Ahmad, J.

1. This is a plaintiff's appeal and arises out of a suit for sale on the basis of a mortgage-deed dated 11th December 1918. The mortgage was executed by Mithu Lal defendant 1 in favour of one Lachhmi Chand and was for a sum of Rs. 1,500. The agreed interest was at the rate of 10 annas per cent per mensem com-poundable with six-monthly rests. The debt was payable on the expiry of one year from the date of the execution of the mortgage-deed. But it was stipulated in the deed that:

in the case of breach of covenant...and non-payment of a part or whole of the principal, interest and compound interest (the creditor) shall have the right to recover the amount due to him by filing a suit in Court....

2. It is common ground that default was made in the payment of interest on the expiry of six months from the date of bond and that no portion of the mortgage debt was paid up to the date of t he suit. Hoti Lai, plaintiff T appellant, filed the suit on 10th December 1931, that is, within 12 years from the date of the expiry of one year from the date of the execution of the mortgage-deed. Hoti Lai alleged that in a partition between him and Lachhmi Chand the mortgage-deed in suit was allotted to his share and as such he was entitled to maintain the suit. The defendants to the suit were Mithu Lal and certain other persons alleged to be subsequent transferees of the mortgaged property. Bohra Lachhmi Chand, the original mortgagee, was also arrayed as a pro forma defendant Kishan Lal, who was arrayed as defendant 5 was exempted during the pendency of the suit in the trial Court and we are not concerned with him in the present appeal.

3. The suit was contested by Chatri Lal, defendant 2, on a variety of grounds. He contended inter alia that the suit was barred by limitation. The trial Court recorded findings on all the issues framed by him, but dismissed the suit on the ground that it was time-barred. The plaintiff filed an appeal in the lower appellate Court and in the memorandum of appeal assailed the findings of the trial Court on the question of limitation as well as on other points that that Court had decided against him. The lower appellate Court agreed with the trial Court in holding that the suit was barred by limitation and accordingly dismissed the appeal filed by the, plaintiff. The lower appellate Court did not record any findings on the other questions raised in the memorandum of appeal. The plaintiff has come up in appeal to this Court and it is contended on his behalf that the view on the question of limitation taken by the Courts below is erroneous. In our judgment this contention is unanswerable and must prevail.

4. The Courts below were of the opinion that in accordance with the terms of the mortgage-deed the mortgage money became 'due' within the meaning of Article 132, Schedule 1, Limitation Act, on the expiry of six months from the date of the execution of the mortgage-deed, viz., on 1st June 1919, when admittedly default was made by the mortgagor in the payment of interest, and as the suit was not filed till more than 12 years after that date the suit was time-barred. This view of the Courts below is in conflict with the decision of their Lordships of the Privy Council in Lasa Din v. Gulab Kunwar 1932 P.C. 207. In that case it was held that, if in the event of the happening of a certain contingency option is given to the mortgagee to enforce his security at once without waiting for the full term of the mortgage, the option is exclusively for the benefit of the mortgagee, and if the mortgagee does not avail himself of the option, the mortgage money does not become due till after the expiry of the full term of the mortgage. In the case before us the term of the mortgage was period of one year and it was clearly stipulated in the mortgage-deed that the principal, interest and compound interest will be paid to the mortgagee on the expiry of one year from the date of the mortgage. The covernant in the deed mentioned above gave an option to the mortgagee not to wait for the full period of one year and to put the mortgage-deed into suit after the expiry of six months in the event of the failure of the mortgagor to pay interest on the expiry of six months. This, at best, was an option given to the mortgagee and it was open to the mortgagee not to avail himself of this option and to wait for the full stipulated period of the mortgage. The money secured by the mortgage-deed in suit therefore did not become due till 11th December 1919 and the suit was therefore within limitation.

5. We accordingly allow this appeal, set aside the decree of the lower appellate Court and remand the case to that Court with directions to readmit the appeal to its original number and to try and dispose of it according to law. The plaintiff is entitled to his costs of this appeal. Costs in the Courts below shall abide the result.


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