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J.P. Rego Vs. Phillip Tauro and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1929Mad371; (1929)56MLJ580
AppellantJ.P. Rego
RespondentPhillip Tauro and anr.
Cases ReferredReeves v. Butcher
Excerpt:
- - if i fail to pay to you the amount of interest payable annually and also the principal amount according to the vaidas mentioned above and keep in arrears the amount of any one of the instalments the future vaida to pay the principal amount shall become cancelled and i shall be liable to pay to you all the amounts immediately irrespective of future vaidas together with interest at 10 per cent per annum from the date of default of payment of the said instalment on the principal and interest of the instalment amount kept in arrears and also on all the amounts due to you by me in respect of future instalments. but, as a matter of fact, the two issues are really connected with each other, because if the right of action to sue for the whole amount arose in 190s, when the first default.....ramesam, j. 1. this appeal arises out of a suit on the foot of a mortgage bond (ex. a), dated 31st may, 1918. the amount borrowed under the bond was rs. 5,000 and the interest was 8 per cent, per annum. the principal was payable in four instalments on the 31st may of each year beginning with 1919 and ending with 1922. it is also stipulated that on the same day the interest due on that date should be paid. then there is the further clause:if i fail to pay to you the amount of interest payable annually and also the principal amount according to the vaidas mentioned above and keep in arrears the amount of any one of the instalments the future vaida to pay the principal amount shall become cancelled and i shall be liable to pay to you all the amounts immediately irrespective of future vaidas.....
Judgment:

Ramesam, J.

1. This appeal arises out of a suit on the foot of a mortgage bond (Ex. A), dated 31st May, 1918. The amount borrowed under the bond was Rs. 5,000 and the interest was 8 per cent, per annum. The principal was payable in four instalments on the 31st May of each year beginning with 1919 and ending with 1922. It is also stipulated that on the same day the interest due on that date should be paid. Then there is the further clause:

If I fail to pay to you the amount of interest payable annually and also the principal amount according to the vaidas mentioned above and keep in arrears the amount of any one of the instalments the future vaida to pay the principal amount shall become cancelled and I shall be liable to pay to you all the amounts immediately irrespective of future vaidas together with interest at 10 per cent per annum from the date of default of payment of the said instalment on the principal and interest of the instalment amount kept in arrears and also on all the amounts due to you by me in respect of future instalments.

2. The mortgagor committed default in the payment of the first instalment on the 31st May, 1919. The mortgagee then filed a suit (O.S. No. 404 of 1919) to recover the said instalment. The plaint is Ex. I. In paragraph 4 of the said plaint it is alleged that the plaintiff waives the benefit of the provision in the bond and reserves his right to sue defendant separately should he commit default in payment of the subsequent instalments. In calculating the amount due to him, he calculated interest on the amount of the instalment from the 1st June, 1919 up to the date of suit at 10 per cent, per annum. That suit was decreed. It was a decree for sale of the mortgaged property or a sufficient part thereof. The present suit was filed on the 21st February, 1923 to recover all the amounts of the remaining instalments, interest being calculated at 8 per cent, up to the date of each of the instalments and at 10 per cent, per annum from the date of default. The defendant raised the question that the suit was barred under Order 2, Rule 2 of the Civil Procedure Code. This is the subject of the first issue. The Subordinate Judge found that the suit was barred except as to a certain item which it is unnecessary to refer to and dismissed the suit so far as the amounts of instalments are concerned. The plaintiff appeals.

3. The question whether in such a case the suit is barred under Order 2, Rule 2, Civil Procedure Code, has been argued recently before me and my learned brother, Jackson, J. Our decision is reported in Mukyaprana Bhatta v. Kelu Nambiyar : AIR1928Mad705 . The only difference between that case and the present case is, that that was a case of a mortgage arising out of a chit fund. Otherwise the two cases resemble, and if we follow that case we will be bound to hold that the suit is barred under Order 2, Rule 2, Civil Procedure Code. But Mr. Sitarama Rao, the learned Advocate for the appellant, who also happened to argue the former case brought to our notice certain additional considerations, and the cases bearing upon them, and the appeal has also been elaborately argued by Mr. K. Bhashyam Aiyangar for the respondents.

4. I must start the discussion by observing that in most cases, if not in all cases, the considerations arising in a case where the defendant relies on Order 2, Rule 2 are the same as where the defendant's plea is one of limitation. I made observations to the same effect in the former decision though I was willing to keep aside the decisions bearing on the question of limitation following the example of several learned Judges who dealt with similar points. In Srinivasa v. Chanbasappa Gowda (1922) 25 Bom. L.R. 203,a case not mentioned on the last occasion, Macleod, C.J. and Crump, J., observe:

But, as a matter of fact, the two issues are really connected with each other, because if the right of action to sue for the whole amount arose in 190S, when the first default was made, then clearly the present suit was barred by limitation. It was also barred under Order 2, Rule 2, because the plaintiffs chose to file a suit in 1905 for two instalments, when they ought to have claimed the whole of the relief to which they were then entitled.

5. I am inclined to agree with the learned Judges to the extent that both the issues were connected with each other and either both must be decided for the plaintiff or both must be decided against him in general. Remembering this consideration I will now proceed to discuss the cases. So far as the two decisions of the Privy Council in Kishen Narain v. Pala Mal and Muhammad Hafiz v. Muhammad Zakariya (now relied on by the Subordinate Judge) are concerned, I adhere to what I said in my last judgment, i.e., they do not help either way as they are plain cases where Order 2, Rule 2 ought to be applied. This is also the view of our learned brothers, Kumaraswami Sastri and Curgenven, JJ., in Sivasubramania Pillai v. Nagappa Pillai (1926) 52 M.L.J. 636. Then there is a group of cases in which the bond contains words like 'when required' or 'when you require' or 'if you choose.' I am willing to say that such cases stand on a different footing, and I collected all such cases in my former judgment. Whether the decision in Velliappa Chettiar v. Venkatasubbarayulu Nayudu : AIR1926Mad160 should be classed in this group--because the words there are 'You shall be at liberty to recover' and may be said not to require any overt act on the part of the mortgagee--is not a matter which requires any decision now; for, in the present case, the words are 'I shall be liable to pay.' To that list may, however, be added the decision in Sawmy Rao v. Official Assignee of Madras : (1925)49MLJ474 , in which the words are 'whenever demanded.' The case in Kunjunnni Nair v. Kunjunni Nair (1911) 1 M.W.N. 79 is not a case of mortgage. It strictly falls under Article 75 of the Limitation Act and therefore 1 was not quite correct in saying in my former judgment that it was in conflict with the decision in Gayadin v. Jhumman Lal I.L.R. (1915) A. 400, but this fact does not affect the rest of the judgment. Similarly the decision in Sitab Chand Nahar v. Hyder Malla I.L.R. (1896) C. 281 is a case in which the learned Judges considered the question of waiver and as it was found in that case that there was no waiver, they decided it against the plaintiff. It oughat not to be grouped with the decision in Gayadin v. Jhumman Lal I.L.R. (1915) A. 400. Leaving these two decisions aside, there still remains the main point to be discussed, namely, the conflict between the decision in Narna v. Ammani Ammal : (1916)31MLJ865 and the decision in Gayadin v. Jhumman Lal I.L.R. (1915) A. 400. The question therefore arises whether these cases can be distinguished and, if not, which ought to be followed.

6. Mr. Sitarama Rao, relying on Narna v. Ammani Amma : (1916)31MLJ865 argued that there is a general principle in all such cases according to which the obligee of the bond can waive the higher alternative offered to him on the happening of the obligor's default; and though in the case of Article 75 such an option or right of waiver is cut down by the legislature it remains in the case of mortgage bonds which are governed by Article 132. The learned Judges certainly seem to be of that opinion in the judgment in Narna v. Ammani Amma : (1916)31MLJ865 . But, when the grounds of decision are examined, I am not satisfied with them even assuming the conclusion is correct. The first decision referred to by the learned Judges is Astley v. Earl of Essex (1874) 18 Eq. 290. That was a case of a forfeiture of a lease. It turned upon the construction of the words of the proviso in Section 4 of 3 and 4 Will. IV, c. 27. The next case referred to was Governors of Magdalen Hospital v. Knotts (1876) 5 Ch.D. 175. The case went up on appeal to the Court of Appeal in Governors of Magdalen Hospital v. Knotts (1878) 8 Ch.D. 709 and then to the House of Lords in President and Governors of Magdalen Hospital v. Knotts (1879) 4 A.C. 324. The learned Judges overlooked the fact that the case went up on appeal. The views taken by the Court of Appeal at page 725 and the House of Lords differed between themselves and differed from the view of Jessel, M. R., whose observations are therefore of no weight. The next two cases referred to only for not being followed, are Reeves v. Butcher (1891) 2 Q.B. 509 and Hemp v. Garland (1843) 4 Q.B. 519. As pointed out by the Allahabad High Court in Shib Dayal v. Meharban I.L.R. (1922) A. 27, these cases are accepted law in England. Vide Hals. Vol. 19, p. 44.

7. I am not satisfied with the reason in Nama v. Ammani Amma : (1916)31MLJ865 for not following them. Mr. Sitarama Rao referred to the case of Davenport v. The Queen (1877) 3 A.C. 115. This is a case of a lease of Crown lands. It was held that the forfeiture can be waived. At p. 128 it was observed that in construing clauses of forfeiture in leases declaring them void on breach of conditions by the lessee, they will be held voidable only at the option of the lessors. We then have got these observations:

The same rule of construction has been applied to other contracts where a party bound by a condition has sought to take advantage of his own breach of it to annul the contract. See Doe v. Bancks (1821) 4 B. & A. 401 : 106 E.R. 984, Roberts v. Dwey (1833) 4 B. & A. 664 : 110 E.R. 606 and other cases in the Notes to Dumpor's case 1 Sm. L.C. 41.

8. Now I find that Doe v. Bancks (1821) 4 B. & A. 401 : 106 E.R. 984 is also a case of a lease. Roberts v. Davey (1833) 4 B. & A. 664 : 110 E.R. 606 is a case of a license which is akin to a lease. In the Note's to Dumpor's case 1 Sm. L.C. 41 the only cases of other contracts which we are able to find are : (1) Malins v. Freeman (1838) 4 Bing. N.C. 395 : 132 E.R. 839. That was discussed by Sir Montague Smith at page 129 in Davenport v. The Queen (1877) 3 A.C. 115. It was a case of an auction being voidable under the terms of a statute. (2) Hughes v. Palmer (1865) 19 C.B.N.S. 393 : 144 E.R. 839 Hyde v. Watts (1843) 12 M. & W. 254 : 152 E.R. 1193. These two cases are cases of composition deeds and it was held that the contract was voidable at the option of the creditor with reference to the term in the contract. Now it seems to me that cases of forfeitures of leases and licenses and cases of voidable contracts stand on a somewhat different footing from the cases before us. In those cases the question is whether a party can avoid the lease or contract and fall back on his prior higher rights which were cut down by the contract of lease or composition. In the class of cases with which I am now dealing the question is not whether a person can avoid a contract but whether he has the option to take advantage of a clause giving him a higher right than the prior right existing. These are not cases of voidable contracts and it seems to me that both are not on the same footing. Mr. Sitarama Rao also referred to a decision in James v. Young (1884) 27 Ch.D. 652. That was a case of a sale in the Forest of Dean and it was held that the lease was voidable. North, J., quotes from a judgment of Blackburn and Mellor, JJ., in Claugh v. L. & N. W. R. Company (1871) L.R. 7 Ex 26. This extract contains a further quotation from Bramwell, B., in Croft v. Lumley (1858) 6 H.L.C. 705. After this second quotation is finished Lord Blackburn proceeds to observe : 'In all this we agree, and think that, mutatis mutandis, it is applicable to the election to avoid a contract for fraud.' Finally North, J., discusses the case before him with reference to these observations of Lord Blackburn. Now again we see that the cases discussed are, however, those of a forfeiture or a contract voidable on the ground of fraud. The observations I have already made apply to this. In my opinion, this case cannot help the case of the kind I am now discussing. The result is I am not able to agree with the reasons given in the judgment in Narna v. Ammani Amma : (1916)31MLJ865 and to hold that there is any such general principle as contended for by Mr. Sitarama Rao.

9. The question then remains whether we can uphold the conclusion in Narna v. Ammani Amrna : (1916)31MLJ865 at least for other reasons. I find that the case has been followed in a number of cases in this Court, and, it seems to me, if there is a legal way of doing it, I ought to agree with the conclusions, if not, with the reasons.

10. It seems to me there is such a way. Where the contract contains terms of default, which fall within the scope of Section 74 of the Contract Act it is clear that the mortgagee has no right to enforce the terms as they are, for, the law declares that the Court can award reasonable compensation not exceeding the stipulation in the contract and when a party knows that he is not entitled to enforce the contract as it is but that the law enables the Court to meddle with it and give only a reasonable compensation, it stands to common sense to hold that the party himself may, to the best of his ability, lessen the rigour of the stipulation and try to find out what is reasonable or what a Court would award as reasonable and may himself insist on the contract only to that extent. To so hold is not in conflict with the general principle of law that, if a man has got a bare cause of action he is not entitled to say:

I will cut it up into parts or I would ignore the adverse act of the opposite party and wait for some time more to recognise the cause of action thus avoiding the bar of Order 2. Rule 2. or of limitation.

11. We are not now dealing with a case of a bare cause of action but a case where, first, there is one right for which the cause of action has accrued and then in the alternative on the happening of a default, a higher right was stipulated for in the document but which under the law a Court is entitled to interfere with. In such cases the general principle does not apply, and it seems to me that the party himself can exercise his discretion and choose to insist on the performance of a lesser thing than that stipulated in the contract. The question whether he should exercise it soon after the default or can disclose his choice only in the final suit does not arise in this case, for, in the case before us he has clearly stated his choice in the first suit which was filed immediately after default. I have already quoted from the plaint in that case. Mr. Bhashyam Aiyangar for the respondents argued that he must either accept the whole clause on default or reject it altogether. In the present case, he chose to claim 10 per cent, after default in the first suit. But I am not able to accept this argument. All that the plaintiff claims to do in such a case is to find what is reasonable, to find out if possible what the Court itself would have done. In the present case, he said:

I do not want to rely upon the clause relating to the calling of the other instalments. But I want to rely upon 10 per cent, interest from the date of default.

12. On principle I do not see any reason why he should not do this and why he should accept and reject both together. This is also the view taken by our brothers Kumaraswami Sastriar and Curgenven, JJ., in Sivasubramania v. Nagappa (1926) 52 M.L.J. 636. To this extent I agree with it. The result is that I hold that, in all cases where the clause is penal and is governed by Section 74 of the Contract Act, the mortgagee has an option and I confine such option to such cases only. The decision in Narna v. Ammani Amma : (1916)31MLJ865 would, according to such a view, be correctly decided and it would not then be in conflict with the decision in Gayadin v. Jhumman Lal I.L.R. (1915) A. 400 in which there is no penal clause but merely a clause providing that in default of the payment of one instalment all the instalments become due. Such a clause is not penal as shown by one of the illustrations to Section 74. On this ground I would hold that the present suit is not barred under Order 2, Rule 2. Whether the same principle applies to a case of chit fund is a different matter, for, it is sometimes said that the terms in a chit bond should be strictly enforced. Vide Vaithianatha Aiyar v. Goviwdaswami Odayar (1921) 42 M.L.J. 551. On the other hand, it is sometimes said, even the terms of the chit bond may be penal. Vide Judgment of V.V. Srinivasa Aiyangar, J., in Ramalinga Adaviar v. Meenakshisundaram, Pillai (1924) 47 M.L.T. 833. Whether the decision of myself and my learned brother Jackson, J., in Mukyaprana v. Kelu Nambiyar : AIR1928Mad705 should be regarded as correctly decided depends on the peculiar nature of the chit fund contract. That difficulty does not arise here. In the present case, undoubtedly the terms are penal and the party exercises his judgment in finding out what is reasonable.

13. Mr. Sitarama Rao has referred to a number of cases relating to construction of compromise decrees. I think it is safer to keep the cases of decrees apart and to deal with them on a different footing and not to import principles of construction in the case of decrees and apply them to cases of bonds. So I abstain from dealing with them.

14. Mr. Sitarama Rao argued that the suit is not barred under Order 2, Rule 2 on another ground. He relied on Narasinga Rau v. Venkatanarayana I.L.R. (1892) M. 481 and Subba Rao v. Rama Rao (1867) 3 M.H.C.R. 376. The latter decision was on the Act of 1859 and it is safe to ignore it. The decision in Narasinga Ran v. Venkatanarayana I.L.R. (1892) M. 481 receives some support from the observations of Lord Buckmaster in Kishen Narain v. Pal Mal :

If, therefore, the plaint originally brought came to be properly interpreted as claiming only a personal relief in respect of the unpaid interest, the appellant's case would he on surer ground.

15. These observations were also given effect to by my Lord the Chief Justice and Krishnan, J., in Sawmy Rao v. Official Assignee of Madras : (1925)49MLJ474 . But in the present case the former suit was not on a mere personal covenant but for the sale of the property. I do not think therefore the contention of Mr. Sitarama Rao can be sustained. The result is I would allow the appeal on the other ground only and decree the suit with costs throughout. The usual mortgage decree will issue. Time for redemption 15th July, 1929.

16. The memorandum of objections is dismissed but without costs.

17. I agree with my learned brother that this is a matter suitable for amendment of Order 2, Rule 2, Civil Procedure Code, or Article 135 of the Limitation Act, or, both.

Venkatasubba Rao, J.

18. This appeal raises a question of some importance in regard to the application of Order 2, Rule 2, Civil Procedure Code. The suit is based upon a mortgage bond, dated 31st May, 1918. The sum secured by it is Rs. 5,000 to be repaid with interest at 8 per cent, in four annual instalments in the following manner:

Rs.Interest at 8 per cent, on Rs. 5,000, viz., Rs. 400plus the first instalment of principal Rs. 1,250... 1,650Interest, viz., Rs. 300 on the balance of principal Rs. 3,750 plus the second instalment of principal Rs. 1,250... 1,550Interest, viz., Rs. 200 on the balance of principal Rs. 2,500 plus the third instalment of principal Rs. 1,250... 1,450Interest, viz., Rs. 100 on the balance of principalRs. 1,250 plus the last instalment of principal... 1,350

19. Then comes the important clause which is to the effect that in default of payment of any instalment, the whole amount shall become due and in that case the rate of interest shall be 10 per cent, on the arrears then due and on the amount subsequently payable. -The actual words in the bond are:

The provision in regard to the payment by instalments shall in that event become cancelled.

20. The same idea is again but differently expressed in the next clause, which runs thus:

You are entitled to collect the amount from me in that manner.

21. The 1st defendant, the mortgagor, failed to pay the first instalment. The plaintiff thereupon instituted O.S. No. 404 of 1919 in the District Munsif's Court of Mangalore for the recovery of Rs. 1,700 made up of Rs. 1,650 mentioned above and Rs. 50 interest at 10 per cent, on the said sum from the date of default, namely, 1st June, 1919. The suit was filed on the 24th of September, 1919 and there was the usual prayer in the plaint for the sale of the mortgaged property. Paragraph 4 of that plaint is very important and reads thus:

Though the whole amount of the mortgage money has become payable by reason of the default of the defendant, the plaintiff waives the benefit of the provision in the bond and reserves his right to sue the defendant separately should he commit default in the payment of the subsequent instalments.

22. The decree that was passed in the case recognised this reservations for it said:

The sale shall be held subject to the payment of the balance of principal and interest due under the suit bond.

23. The mortgagor did not make a single payment subsequently and in the present suit the plaintiff seeks to recover the balance due to him under the bond. The 2nd defendant purchased the suit properties subject to the mortgage and in the sale-deed in his favour there is an express mention of the amount due to the plaintiff.

24. There is no defence on the merits. The 2nd defendant pleads that the present suit is barred by reason of the previous suit under Order 2, Rule 2, Civil Procedure Code. The Lower Court has upheld the defendant's contention and the plaintiff has filed this appeal.

25. The question resolves itself into this : When does the right to sue accrue? This at once raises the point, when does the statute begin to run, under Article 132 of the Limitation Act, from the date of the first default, or, from the date when the money becomes due under the main contract? for, in my opinion, the question presents itself in the same form, whether in regard to Order 2, Rule 2, Civil Procedure Code or Article 132 of the Limitation Act, as it is obvious that in either case the same principle applies. The Code enacts that every suit shall include the whole of the claim which the plaintiff is entitled to make and if he omits to sue in respect of any portion, he shall be debarred from afterwards suing for it. The words used in Article 132 are:

When the money sued for becomes due.' The two sets of expressions 'when does the plaintiff become entitled to the money?' (used in the Code) and 'when does the money become due?' (used in the Limitation Act) are for the present purpose indistinguishable. In, my opinion, therefore, the Courts have rightly referred to the same principle, whether a particular case raised a question under the Code or under the Limitation Act. I may mention that on the point we have to decide, there is a conflict of judicial opinion, the Madras cases favouring the appellant's contention and the Allahabad decisions generally supporting the contrary view. In short, the question we have to decide is, which of these two views is the more acceptable one? After listening to very full arguments, I have come to the conclusion that the view taken by our Court is not only the more just but the sounder view and I find no reason to depart from it especially, when I find that it has been adopted almost without dissent in numerous decisions ranging over a long period. Let me now examine the cases. Badi Bibi Sahibal v. Sami Pillai I.L.R. (1892) M. 257, decided so long ago as 1892 by Muthuswami Aiyar and Best, JJ., held that Section 43 of the Civil Procedure Code of 1882 did not bar a second suit where the plaintiff had previously sued for the first year's interest under a bond containing a default clause. The learned Judges observe:The alternative provision in Ex. A is one that was inserted for the exclusive benefit of the plaintiff. He had, therefore, an option to sue either for the first year's interest only, or for the same, together with the principal amount. It was only necessary that he should manifest his intention of waiver by some overt act which could not be recalled. The real test appears to us to be not whether the option was exercised with the privity of the defendants, but whether it was so exercised as to determine the plaintiff's locus penitentiae.

26. The next case that deals with the point is Perumal Aiyan v. Alagirisami Bhagavathar I.L.R. (1896) M. 245 : 1896 7 M.L.J. 222, a case on limitation, where a different view was taken; but this was distinguished in Nettakaruppa Goundan v. Kumaraswami Goundan I.L.R. (1898) M. 20 : 1896 8 M.L.J. 167. The last mentioned case was followed in Narna v. Ammani Amma : (1916)31MLJ865 , which, in my opinion, states the principle correctly, although (as has been shown by Mr. Bhashyam Aiyangar, the learned Counsel for the respondents) the English cases cited in the judgment are not quite in point. The fact is, as I shall show presently, that the principle adopted in that case is that recognised in English cases of great authority. The distinction between a right and a privilege is of fundamental importance and this must not be overlooked in construing the word 'entitled' in Order 2, Rule 2. The plaintiff, that rule says, is bound to include the whole of the claim which he is entitled to make, in other words, to which a right has accrued. The point then is, before the first suit was filed, did a right accrue to him to demand the whole amount? The matter may be put somewhat thus : The plaintiff has an option to enforce the clause or not at his pleasure. It is open to him to avail himself of that option or to waive it and there is a third alternative, namely, it is equally open to him not to make election. He may by act or word show that he elects to avail himself of the benefit, and then he determines his election for ever. He may similarly indicate that he waives the option, and in that case again, he cannot afterwards change his mind. Then there is the third alternative, where he makes no election, retaining the right either to exercise the power or to waive it- -and this he may retain till the suit is filed. Construing Order 2, Rule 2 in the light of this principle, it cannot be said of a person, that on the date of the first suit he became entitled to sue for the whole amount, unless he had previously elected by some word or act to take advantage of the default clause. If he had previously done nothing, that is, had made no election, the act involved in bringing the first suit for a single instalment amounts to a waiver on his part of the benefit reserved under that clause. If again, after the default has occurred, he keeps the question open and does nothing, but finally sues for the whole amount, the fact that he has so sued, shows that he has waived the benefit reserved to him under the contract. With great lucidity, these principles are stated by Lord Blackburn in Clough v. London and North Western Railway Company (1871) L.R. 7 Ex. 26, the relevant passage from whose judgment is quoted by North, J., in James v. Young (1884) 27 Ch.D. 652.'

27. Although in Narna v. Ammani Amma : (1916)31MLJ865 these cases were not referred to, it is the principle that was recognised in them that was applied. The contention that was urged in that case was, that it must be shown under Article 132, just like under Article 75, that the payee waived the benefit of the provision. The learned Judges negatived this argument refusing to import into Article 132 words to be found only in Article 75. Another contention which does not seem to have been advanced must also be taken to have been necessarily and by implication repelled by the judgment in that case. That contention is, that while waiver is expressly mentioned in Article 75, omission to refer to it in Article 132, indicates the intention of the legislature, to deny altogether a right of waiver under the latter articles. I have discussed at this length the effect of Narna v. Ammani Amma : (1916)31MLJ865 , as it is recognised as an authority on the point in almost every subsequent case. In some cases, a distinction was attempted on the ground that the words by which the option was reserved contained expressions such as' 'if you require' or 'on demand.' In my opinion this is a distinction without a difference, for the meaning is not altered by the addition of these words. When it is said that a person has a certain power, it means only that, if he so requires it, he may exercise that power. These words thus being necessarily implied in the general words by which the option is reserved, it makes little difference whether they are present or not. It remains only to add in regard to Narna v. Ammani Amma : (1916)31MLJ865 that the learned Judges preferred to agree with the view taken by Bannerjee, J., in his dissenting judgment in Gayadin v. Jhumman I.L.R. (1915) A. 400 and refused to follow the two English cases Reeves v. Butcher (1891) 2 Q.B. 509 and Hemp v. Garland (1843) 4 Q.B. 519, which, in passing, I may note, construed language somewhat different of the English Limitation Act. Narna v. Ammani Amma : (1916)31MLJ865 was refused to be re-considered in unreported Appeal No. 27 of 1916 by a Bench of this Court. That a mortgagee is not bound to take advantage of his debtor's default is again affirmed in Ramadh Bibi v. Kandasami (1917) 9 L.W. 479 (sec the judgment of Spencer, J.).

28. Krishnan, J., observes in the same case:

It is not alleged that the mortgagee made any demand for his money before the due date. He apparently did nothing either to take advantage of his option or on the other hand to waive his right to do so. It seems to me that, when a due date is fixed and an option is given to a creditor to change it, it will he unreasonable to presume that he did change it, when he did nothing at all to produce that effect . If there is evidence that he (the plaintiff) did exercise his option the position is clear; but in the absence of such evidence, I am not prepared to make any presumption to his prejudice.

29. With respect, it seems to me that the position is very clearly stated in this judgment. In that case, a further point was taken that the plaintiff should be deemed to have exercised his option by suing for compound interest and that argument was also rejected. It is also noteworthy that in the bond in that suit occurred the words 'when you require' but that the judgment did not proceed on that ground. The other cases which have taken the same view are Lachakkammal v. Sokkayya (1918) M.W.N. 586 Kaliappa v. Sami Aiyar (1921) M.W.N. 384, Velliappa v. Venkatasubbarayulu : AIR1926Mad160 , Mohideen Kariya Pulavar v. Periyanayakam Pillai : AIR1925Mad233 and Sivasubramania v. Nagappa (1926) 52 M.L.J. 636 .

30. Of these cases, I need refer to only two in some detail. Sivasubramania v. Nagappa (1925) 52 M.L.J. 636 is a decision under Order 2, Rule 2, Civil Procedure Code, and the previous cases on the point which I have cited were followed. In Velliappa v. Venkatasubbarayulu : AIR1926Mad160 the learned Judges observed that they would follow the decisions of this Court in preference to the Allahabad cases. Shib Dayal v. Meharban I.L.R. (1922) A. 27 was not referred to in the judgment but it merely affirms the previous cases of that Court. The only Madras case which has taken a different view is Mukyaprana v. Kelu Nam-biyar : AIR1928Mad705 . That was a case under Order 2, Rule 2, and Jackson, J., seems disposed to take the view, that the principle applicable under that provision is different from what applies under the Limitation Act. With the greatest respect, as I have already said, I am unable to agree with this proposition. I need scarcely refer to the cases cited by Mr. Sitarama Rao, dealing with instalment decrees.

31. The learned Subordinate Judge in deciding against the plaintiff has purported to follow two decisions of the Privy Council which he has completely misread and neither of which is applicable. In Muhammad Hafiz v. Muhammad Zakariya , the three years mentioned in the deed had elapsed before the first suit was brought, so that the whole amount had become then due. This fact is clearly pointed out in the judgment itself. (See p. 11). Similarly in Kishen Narain v. Pala Mal , the first suit was brought in 1908 more than two years after the entire amount had become payable. (See judgment at page 118). Lastly, I may refer to two other decisions of the Judicial Committee, which cannot be treated as authorities on the point, the question having been left open, although the observations of their Lordships tend rather strongly to support the view I am taking--Juneswar Doss v. Mahabeer Singh and Pancham v. Ansar Husain .

32. I am therefore inclined both on principle and on authority to hold that the suit is not barred under Order 2, Rule 2, Civil Procedure Code, in the present case, the plaintiff, as I have said, expressly waived the benefit, but--and that is the point I want to stress--all that the creditor need show is, that he had not elected to take advantage of the default clause.

33. In view of the great importance of this question and the conflict of opinion on this point, it is extremely desirable that Article 132 of the Limitation Act should be so amended as to set the matter at rest. The Judges who felt constrained to hold that the statute runs from the first default, recognised the injustice involved in it. (See, for instance, the judgment of Fry, L.J., in Reeves v. Butcher (1891) 2 Q.B. 509, who observes:

We have not to determine whether the defence here set up is hand-some or conscientious, hut whether it is good at law.

34. It further follows that, in my opinion, it is desirable that Order 2, Rule 2, Civil Procedure Code, should be also similarly amended.

35. In the result, the judgment of the Lower Court is set aside and a decree is passed in favour of the plaintiff for the amount claimed with costs throughout.

36. As regards the time for redemption and the memorandum of objections, I agree with the order passed by my learned brother.


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