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Karan Raj and anr. Vs. Chunnilal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 37 of 1958
Judge
Reported inAIR1964Raj72
ActsTransfer of Property Act, 1882 - Sections 58; Evidence Act, 1872 - Sections 101 to 103; Code of Civil Procedure (CPC) , 1908 - Sections 34 and 100 to 101; Registration Act, 1908 - Sections 49; Limitation Act, 1908 - Schedule - Article 66
AppellantKaran Raj and anr.
RespondentChunnilal and ors.
Appellant Advocate Chandmal Lodha, Adv.
Respondent Advocate B.N. Chanda, Adv.
Cases ReferredJeth Mal v. Amb Singh
Excerpt:
.....that the finding of the trial court that the transaction between the parties as evidenced by the deed of mortgage was bad for lack or sham nature of the consideration was entirely erroneous and his conclusion on this aspect of the case was that the defendant upon whom the burden of proving want of consideration lay had failed to prove that the mortgage deed was without consideration and that it had been executed by them fictitiously in order to save the house from the clutches of their creditors and that on the contrary the evidence produced in the case was good enough to establish that the deed was executed in lieu of the consideration mentioned therein. having so found, the learned judge went on to hold that though the mortgage-deed failed fordefective registration, there was no..........appeal that the plaintiffs had three years' limitation within which to bring their suit this three years limitation would start from the expiry of four years from the date of the bond under article 66 of the limitation act. in other words, limitation against the plaintiffs commenced to run from the 16th may, 1953, and inasmuch as the present suit was brought on the 17th may, 1955, it was well within the period of three years computed from that date. the plea of limitation, therefore, also fails and must be dismissed. 12. turning next to the plaintiffs' cross-objection, the contention is that the learned district judge fell into an obvious error of law when he failed to allow pendente lite and future interest to the plaintiffs on the principal amount decreed by him. this contention has.....
Judgment:

I.N. Modi, J.

1. This is a civil regular second appeal by the defendants against the judgment and decree of the District Judge, Balotra, dated the 21st December, 1957, in a suit for mortgage money and arises under circumstances presently to be mentioned. The plaintiffs have also filed a cross-objection. I propose to dispose of both these matters by a single judgment. The appellant Udaichand having died during the pendency of this appeal is represented by the other defendant Nath-mal who was already on the record and by Karan-raj, a minor son of Nathmal under the latter's guardianship.

2. The case of the plaintiffs was that on the 17th May, 1949, defendant No. 1 Udaichand as manager of the joint Hindu family consisting of himself and his son Nathmal had found a sum of Rs. 5500/- to be due to the plaintiffs and as a security for the repayment of this debt made a possessory mortgage of the suit house in favour of the plaintiffs by a mortgage-deed Ex. 5. It was agreed between the parties that the said defendant would pay interest at the rate of eight annas per cent. per mensem on the aforesaid sum and, that whatever rent is realised from the house by the plaintiffs will be credited towards the interest on the mortgage money. It was further agreed that the mortgage was to be redeemed after a period of four years. By a rent-note of the same date, that is, the 17th May, 1949, the said defendant took the suit house on rent from the plaintiffs and agreed to pay a rent of Rs. 27/8/- per mensem for the same.

The plaintiffs' case further was that the defendant did not repay the mortgage money as promised at the end of the term of four years and that they had been able to realise a sum of Rs. 935/- only towards interest upto Smt. 2008 Falgun Vadi 5th, and, consequently, a sum of Rs. 5500/- as principal plus a further sum of Rs. 107/2/8/- as interest at the stipulated rate was due to them from the defendants. It was further alleged by the plaintiffs that defendant No. 2 had executed an agreement on Jeth Vadi 7 Smt. 2005 accepting the responsibility for this mortgage and consequently he was also personally responsible for the return of the mortgage-money together with interest.

According to the plaintiffs, the value of the mortgaged house had fallen considerably and therefore it did not constitute adequate security for the loan outstanding against the defendants, and, therefore, they had given a notice to the defendants on the 24th November, 1953, for furnishing additional security or for the return of the entire amount outstanding against them but without, any result. Consequently, the plaintiffs instituted the suit, out of which this appeal arises, on the 17th May, 1955, for the return of the mortgage-money with interest amounting to Rs. 6572/8/- or in default for sale of the house in suit, and in case the proceeds of sale were found to be insufficient, for the amount of the decree, then a personal decree was prayed for. In the alternative, the plaintiffs also prayed that they be put in possession of the suit house and such possession be ordered to continue until the defendant should pay the entire mortgage money together with the interest such as may be payable by them in accordance with the terms agreed between the parties.

3. The defendants resisted the suit on all possible grounds including the invalidity of the registration of the mortgage and the want and the fictitiousness of the consideration. Both these pleas were upheld by the trial Judge with the result that the plaintiffs' suit was thrown out. The plaintiffs then went up in appeal to the learned District Judge, Balotra, who upheld the objection as to the invalidity of the registration. The learned Judge, however, held that the finding of the trial Court that the transaction between the parties as evidenced by the deed of mortgage was bad for lack or sham nature of the consideration was entirely erroneous and his conclusion on this aspect of the case was that the defendant upon whom the burden of proving want of consideration lay had failed to prove that the mortgage deed was without consideration and that it had been executed by them fictitiously in order to save the house from the clutches of their creditors and that on the contrary the evidence produced in the case was good enough to establish that the deed was executed in lieu of the consideration mentioned therein.

Having so found, the learned Judge went on to hold that though the mortgage-deed failed fordefective registration, there was no legal bar against the plaintiffs to recover the debt advanced on the basis of this deed as if it was a simple money bondon the principle that a loan prima facie involveda personal liability to repay, and in this view of the matter, the learned Judge decreed the plaintiffs' suit for Rs. 6572/8/- in favour of them with costs of both the Courts. The learned Judge, however, did not allow any interest pendente liteor future on the principal sum. Consequently,the defendants have come up in second appeal against this decree, and their prayer is that the plaintiffs' suit should have been dismissed. On the other hand, the plaintiffs have filed a cross-objection, and their prayer is that the learned Judge should have allowed pendente lite and future interest to the plaintiffs. I shall take up thedefendants' appeal first.

4. Two grounds were raised before me on behalf of the defendants in this appeal. The firstis that the learned Judge of the first appellate Court had fallen into a grave error in holding thatthe mortgage bond Ex. 5 was supported by consideration and that in returning his finding on this question in favour of the plaintiffs, the learned Judge was wrong in placing the burden of proofon the defendants in all the circumstances of the case. The second contention is that in any viewof the matter, the plaintiffs' suit for a simple money debt, the mortgage having failed on account of the invalidity of the registration of themortgage-deed was barred by time as it was filedmore than three years after the date of the mortgage. As already stated, the mortgage is dated the 17th May, 1949, and the present suit was brought on the 17th May, 1955.

5. I propose to deal with both these contentions in the order in which I have mentionedthem above.

6. I may make it clear at the very outset that when I had questioned learned counsel as to the points which he wished to raise in this appeal he mentioned only two, and these I have already set out. It inevitably followed that learned counsel had no further questions to raise. I mention this because later in the course of hisarguments, he wanted to raise a further question whether the mortgage-deed contained a promiseto pay. Under the circumstances, learned counsel was not entitled to raise this question and I shall, therefore, proceed on the footing that the deed does contain a personal covenant to pay.

7. Having thus cleared the ground I take the question of consideration first. Defendant Udaichand had himself admitted in his written statement that he had executed the mortgage-deed Ex. 5 as well as the rent-note Ex. 3, though his case was that these documents had been executed by him to get out of the clutches of his creditors and were not supported by consideration. So far as the defendant Nathmal is concerned, he undertook the liability to pay the debts covered by the mortgage-deed by a separate writing Ex. 1.It was held by the trial Court that Nathmal had executed this writing. This finding was not questioned before the learned District Judge. In these circumstances, I have no hesitation in saying that the burden of proving want of consideration for the mortgage-bond lay squarely on the shoulders of the defendants and the learned District Judge did not commit any error in disposing of this aspect of the case on that footing. For the rest, it is all a matter of appreciation of evidence, and the finding of the learned District Judge on his evaluation of the evidence of the parties as a whole that the defendants had miserably failed to prove want of consideration is a pure finding of fact which is not vitiated by any error of law whatsoever and this Court has no jurisdiction to allow this question to be reopened in this second appeal. This point, therefore, fails and is hereby repelled.

7a. I then turn to the next question that is of limitation. As already stated, I shall proceed on the footing that the deed does contain a personal covenant to pay. It may be mentioned at this place that an unregistered mortgage-deed may be received as evidence of personal obligation to pay the debt for the purpose of granting a simple money decree. The further question then is whether the suit was barred by limitation at the date when it was brought. The argument of learned counsel for the defendants is that the proper Article of limitation applicable to the suit, assuming it to be brought on a simple money-bond, is either 57 or 67 and in either case, the period of limitation prescribed is three years from the date of the loan or of the bond. According to learned counsel, the suit was obviously brought after three years of such date, and, therefore, it was barred by time. On the other hand, it was contended by learned counsel for the plaintiffs that the case was governed by Article 116 of the Limitation Act, the principle being that where a mortgage deed containing a personal covenant to pay had been executed but illegally registered, the deed being actually registered should be taken to be a registered document for the purpose of enforcing the covenant that is to say, although the mortgage-deed was not validly registered, it was still to be taken as a registered deed for purposes other than that of a mortgage. On this view, the limitation applicable to the suit would be six years.

8. It seems to me that there is a conflict of judicial opinion on this point, and if this conflict had to be resolved in order to decide this appeal I should have been inclined, as at one stage I was, to refer this case to a larger bench. Cases on one side of the line, that is, in favour of the view that where registration is invalid the deed is no better than an unregistered document and therefore a suit based for recovery of money on a personal covenant contained therein is governed by Article 57 or 67 are these: Sailendra Nath v. Keshab Chandra, AIR 1937 Cal 347, Jageshwar-prasad v. Mulchand, AIR 1939 Nag 57, Inderdeo Singh v. Ramlal Singh, AIR 1939 Pat 502 and Gauri Shankar v. Nathulal, AIR 1951 All 589-Cases on the other side of the line are these: Joginee Mohun v. Bhoot Nath, ILR 29 Cal 654, Rama Rao v. K. Vedayya, AIR 1923 Mad 447 and Ram Hit Singh v. Dunia Singh, AIR 1927 Oudh 214. As I read deed in the present case, it is not necessary to resolve this conflict in order to be able to properly decide the question of limitation, and it seems to me that the suit is within limitation even if it is taken for granted that the period of limitation applicable to this type of case, speaking broadly, is three years only.

9. Here I wish to draw attention to that stipulation in the deed which says in effect that the mortgagee could not demand his mortgage-money before four years or the mortgagor could not redeem the mortgage before the same period. The relevant clause is this :

, :i;kvkius vly pkj lky ds ckn pqdrk ,d eqLr nsus lwa tk;xkjks dCtks eksjks gksrh** A

Translated in free English the clause means something like this :

'On paying the mortgage money to you after a period of four years in one instalment in full, I shall be able to get possession of my property.'

The expression used is undoubtedly involved to a degree: but it clearly implies that the creditorcould not ask for the return of his money before four years from the date of the deed and by parity of reasoning, the borrower could not ask for possession back of his house by paying the money before a period of four years. That beingso, it clearly seems to me that the cause of action for the repayment of the money could not arisebefore the end of four years from the date of the loan. These four years would end on the 16th May, 1953. The present suit was brought on the 17th May, 1955, which is clearly within three years of the last mentioned date and is therefore well within time.

10. The contention of learned counsel for the defendants was that the benefit of this period could be given to the mortgagee only if the mortgage turned out to be a good one but not when it failed. I have not felt impressed by this argument. For, whether the mortgage failed or not, the mortgagees (plaintiffs) gave four years' time to the mortgagors (defendants) to pay the money. Having so accommodated the defendants, the plaintiffs could not sue the former before four years expired from the date of the bond and on that view limitation should not start running against them before the expiry of these four years. There is ample authority for the view that if a time limit is fixed for the repayment of the money by the borrower in a simple money bond, the limitation against the lender starts from the end of that time-limit and not from before. This principle is clearly deducible in my opinion from Rungo Bujaji v. Babaji, ILR 6 Bom 83 and Latifunneessa v. Dhan Kunwar, ILR 24 Cal 382. The last mentioned case is also authority for the view that where a deed is capable of two interpretations, one favouring or advancing the right to sue and the other hampering it, then the proper construction to put upon the deed is the one which favours the right to sue and which is, therefore, the more liberal of the two. Reference may be made in support of the same view to Jeth Mal v. Amb Singh, ILR (1955) 5 Raj 334 : (AIR 1955 Raj 97) (FB) to which I was a party.

11. My conclusion, therefore, is that assuming but not deciding for the purposes of the present appeal that the plaintiffs had three years' limitation within which to bring their suit this three years limitation would start from the expiry of four years from the date of the bond under Article 66 of the Limitation Act. In other words, limitation against the plaintiffs commenced to run from the 16th May, 1953, and inasmuch as the present suit was brought on the 17th May, 1955, it was well within the period of three years computed from that date. The plea of limitation, therefore, also fails and must be dismissed.

12. Turning next to the plaintiffs' cross-objection, the contention is that the learned District Judge fell into an obvious error of law when he failed to allow pendente lite and future interest to the plaintiffs on the principal amount decreed by him. This contention has force. It is settled law so far as our Courts are concerned that they should as a rule allow pendente lite and future interest on the monetary decrees passed by them and they must give reasons where these may not be allowed. No reasons have been given by the learned District Judge for disallowing the interest claimed in this case, and I can see none. In fact, learned counsel for the defendants has fairly conceded that if the decree of the learned District Judge is maintained, there is no reason why the plaintiffs should be deprived of this additional relief claimed by them, I would, therefore, allow the plaintiffs pendente lite and future interest on the principal sum of Rs. 5500/-at four per cent per annum simple from the date of the suit until the date of realisation.

13. In the result, the defendant's appeal fails and I hereby dismiss it with costs. I further allow the plaintiffs' cross-objection and order that they will be entitled to receive pendente lite and future interest on the principal sum of Rs. 5500/-from the date of suit till the date of realisation at four per cent per annum simple. The plaintiffs will be entitled to their costs of the cross-objection. (Leave for further appeal refused :)


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