1. This is a plaintiffs' appeal arising out of a suit for sale on the basis of two mortgage-deeds.
2. It appears that on 20th March 1906 a mortgage-deed was exeeuted by Bansidhar in favour of Lachhmi Narain and others hypothecating shares in 3 villages: (1) Nahil, (2) Sambhalpur and (3) Nawadia. This was a simple mortgage on the basis of which a suit was instituted subsequently and a mortgage decree obtained in 1916. On 6th May 1919 the mortgagors executed another mortgage in favour of plaintiff Mange Lal and others for Rs. 7,000 carrying interest at Re. 1-4-0 per cent per mensem compoundable annually under which shares in 2 out of the 3 villages, namely, Nahil and Sambhal-pur, only were mortgaged. There was another mortgage of 1st March 1920 in favour of another person, Lachhman Prasad. On 12th March 1921 the mortgagors executed a second mortgage-deed in favour of the plaintiffs Mange Lal and others for Rs. 22,000 carrying interest at 14 annas per cent per mensem compoundable yearly. In this also the same 2 out of the 3 villages, namely, Nahil and Sambhalpur were hypothecated and there was a 4th village, Tukra Jungle, also mortgaged. Money was left in the hands of the mortgagee for payment of the prior motgage decree of 1916 as also for the payment of the mortgage of 1st March 1920 and some other debts and some money was taken in cash for purposes of payment of revenue and private expenses.
3. But for one difficulty the plaintiffs. would have had a plain-sailing case inasmuch as the previous mortgages were both incorporated in the third mortgage, a suit on which was well within time.
4. It however happened that on the date of the mortgage dated 12th March 1921 the mortgagors were not competent to hypothecate village Nahil because there had been a money decree against this village put in execution, of which the execution had been transferred to the Collector under Schedule 3, Civil P. C., and he had taken action thereunder. In view of para. 11 of that rule as interpreted by their Lordships of the Privy Council in Gauri Shanker Balmukund v. Chinnumiya AIR 1918 PC 168 the mortgage of Nahil made in contravention of para. 11, Schedule 3, Civil P. C., was absolutely void and the charge is incapable of being enforced. The whole trouble has arisen because the plaintiffs took a mortgage of this village, and now consider that the total amount is probably insufficient to be realised out of the remaining property.
5. The plaintiffs did not at first pay off the amount due under the previous mortgage decree but when one of the properties, namely, Nahil was put up for sale they deposited Rs. 10,350-4-4, the total amount due under the decree, in Court on the 9th and the 14th September 1921 and thereby got that property released from sale and the previous auction sale set aside. The plaintiffs now claimed that they are entitled to recover this sum paid by them as against a subsequent mortgagee who came on the scene in the following way. Just before the date when Mange Lal made the deposit in Court the mortgagors had already mortgaged their property in Nahil, Sambhalpur and Tukra Jungle to Ram Saran Lal, defendant 3, for Rs. 11,000. This was on 8th December 1921. Ram Saran Lal brought a suit to enforce this mortgage and obtained a decree and himself purchased it again on 22nd March 1927.
6. In the present suit the plaintiffs are claiming to recover the sum of Rupees 10,000 odd on account of the mortgage decree of 1916 against Ram Saran Lal's property, although the second mortgage in his favour of Nahil was void.
7. The learned Subordinate Judge came to the conclusion that the circumstances of this case were such that the parties could not have intended to keep alive the previous mortgage of 1906 on the date when the mortgage of 12th March 1921 was executed. He has pointed out that the rate of interest under the second mortgage was much higher and it was in the interest of the mortgagee to claim this higher rate rather than fall back on the original mortgage decree which was carrying interest at 6 per cent per annum. He has also pointed out that one village, Nawadia, which had been included in the previous mortgage, was not mortgaged again in the second mortgage and has suggested that if the parties had intended to keep alive the mortgage that property also would have been included. He has also commented on the circumstances that neither in the mortgage-deed nor in the previous suit for sale, which was brought and withdrawn by the plaintiffs, was there any mention of the keeping alive of this earlier mortgage. He has also emphasised that by the mortgage of 12th March 1921 the mortgagors had intended to extinguish the rights under the earlier mortgage of 6th May 1919 and when money had been left in the hands of the mortgagee for the discharge of the previous mortgages it was understood that those mortgages should stand extinguished.
8. There is however the fact that there was an intermediate mortgage of 1st March 1920 and it might have been in the interest of the mortgagee to keep alive the earlier mortgage which he was paying off in order to use it against that intermediate mortgagee. We think that it is not necessary to decide this question finally and we are prepared to assume in favour of the plaintiffs-appellants that when they Intended to take the mortgage on 12th March 1921 it was intended that the previous mortgages would not be extinguished when the amounts left in their hands were paid. But the chief difficulty in the way of the plaintiffs is, as has been found by the Court below, that the claim for the recovery of the amount due under the previous mortgage is now barred by time.
9. The learned advocate for the appellants strongly argued before us that by paying Rs. 10,000 odd in September 1921 the plaintiffs acquired a charge on the properties originally mortgaged which they are entitled to enforce within 12 years of the date of the payment. He has relied very strongly on the case of Shib Lal v. Munni Lal AIR 1922 All 153. That case no doubt supports his contention. It has however been dissented from by the Madras High Court in Kotappa v. Raghavayya : AIR1927Mad631 .
10. In a case which came up before a Full Bench of this Court in Ram Sanehi Lal v. Janki Prasad AIR 1981 All 466 this question did not directly arise though the principle underlying the contention urged on behalf of the appellants arose in that case. Four out of five Judges (p.747) considered that the authorities seem to establish that if the purchaser in execution of a prior mortgagee's decree is not in possession and is suing as plaintiff against the purchaser in execution of a subsequent mortgagee's decree then he can enforce his remedy if limitation on the prior mortgage has not yet run out; but he cannot re cover the mortgage money if limitation has run out. The majority of the judges were clearly of opinion that when a person is suing as plaintiff to enforce a simple mortgage he cannot get a decree for money if the period of limitation prescribed for a suit on the mortgage has already expired. They however thought that if he were found in possession he might be entitled to use the discharge of the previous mortgage as a shield for purposes of defence only and not as a weapon of attack. We are prepared to concede in favour of the appellants that as the point did not directly arise in that case it is not of binding authority in the same way as it is as regards the point which directly arose in that case. Even if we were to assume that the ruling in Shib Lal's case AIR 1922 All 153 was not by implication overruled by this Full Bench, we must point out that the principle laid down therein is contrary to another ruling of this Court, namely, Annupurna Kunwar v. Ram Padarath : AIR1927All417 , where another Bench held that the period of limitation prescribed for a suit brought against a puisne mortgagee was not extended either by execution of an intermediate usufructuary village by the mortgagee. The latter view was based on the facts of that case. The Bench relied for authority on Mohammad Ibrahim Hossain Khan v. Ambika Prasad Singh (1912) 39 Cal 527. This last-mentioned Privy Council case was not brought to the notice of the Divisional Bench in Shib Lal's case AIR 1922 All 153. We agree that the decision of their Lordships in Muhammad Ibrahim Hosain Khan's case (1912) 39 Cal 527 is very much in point. There, in the first place, there was a zaripeshgi lease of 1874 in favour of Girwar Singh for Rs. 12,000 under which possession was delivered. This was followed by mortgages of 1879, 1880 and 1888 January. Lastly there was a mortgage of 17th February 1888 in favour of Mt. Alfan, which was for the express purpose of paying off the zaripeshgi debt which Mt. Alfan discharged (p. 550). The representatives of Mt. Allan brought a suit in 1900 to enforce not only the mortgage of 17th February 1888 but also to recover the sum of Rs. 12,000 due on the zaripeshgi lease on the ground that they had paid that amount, and thereby acquired priority as against the intermediate mortgagees of 1879, 1880 and January 1888. There were pleas of res judicata and limitation and also a plea that the charge created by the zaripeshgi lease had not been kept alive. On p. 555 their Lordships came to the conclusion that the charge created by the zaripeshgi lease was kept alive for the benefit of Mt. Alfan. On p. 558 their Lordships held that as Mt. Alfan had not been made a defendant in a previous suit brought by an intermediate mortgagee, although she was a necessary party, her rights were not affected by the decree and. there was no bar of res judicata. Having recorded these findings their Lordships went on to observe at p. 558:
But as the Rs 12,000 were, under the zaripeshgi deed of 20th November 1874, repayable in jeth 1294 Fasli (September 1887) and this suit was not brought until 22nd September 1900, the claim of the plaintiffs to priority is barred by Article 132, Schedule 2, Lim. Act, 1877.
11. Mt. Alfan's representatives were therefore not allowed to claim priority on account of their having paid off the amount due under the zaripeshgi lease although that lease was prior in point of time to the mortgages of the contesting defendants; and the ground on which the claim was disallowed was that the period of limitation prescribed for the enforcement of the charge under the zaripeshgi had expired. The mere fact that Mt. Alfan paid off the lease in July 1888 did not entitle her representatives to recover the amount.
12. It is possible that even 12 years had expired from the, date of payment when the suit was brought as it is stated on p. 550 that possession was delivered on 15th July 1888. But their Lordships did not base the dismissal on this ground but based it on the ground that the claim on the zaripeshgi deed itself had become time-barred under Article 132, Limitation Act. The authority of this case is therefore in point.
13. We find that the Patna High Court in the case of Sibanand Misra v. Jagmohan Lal AIR 1922 Pat 499 has come to the same conclusion and put the same interpretation on the decision of their Lordships in Muhammad Ibrahim Hossain Khan's case (1912) 39 Cal 527. We are accordingly of opinion that it is too late now for the plaintiffs to recover the amount paid by them to discharge the previous mortgage of 1906.
14. By paying it off they acquired a right for reimbursement but that did not given them any charge on any immovable property capable of being enforced within 12 years. They might have enforced their personal right of re-imbursement under Section 69, Contract Act, for which there is a shorter period of limitation though it would start from the date of payment. But they cannot claim that the payment made by them created a fresh charge in their favour which gave them a fresh start of limitation as against everybody concerned. We may note that this view has been expressed in Sir D.F. Mulla's new treatise on the Transfer of Property Act at p. 486.
15. The plaintiffs are undoubtedly entitled to claim this amount as a charge against the villages other than Nahil, inasmuch as they hold a mortgage of 12th March 1921 on those properties. They have already got a decree for this from the Court below. But we are clearly of opinion that they are not entitled to enforce this charge against Nahil of which the mortgage was void in law and cannot take the case of the law of limitation by pleading that a fresh charge was created in their favour. The appeal is accordingly dismissed with costs.