S.R. Das Gupta, J.
1. This is an appeal against a decree passed by S.N. Banerjee J. declaring that the amount due to the plaintiff under the mortgage mentioned in the plaint in the suit for principal and interest is Rs. 5,000/- and a preliminary mortgage decree for sale and for costs, except costs of hearing after the amendment of the plaint. The plaintiff is the appellant before us and his contention in this appeal is that the learned Judge should have decreed the suit in full with all costs and not for a part only of the claim and costs. The respondents Nos. 1(a) and 1(b) are the heirs of John Carapiet Galstaun, since deceased who was the original defendant in the suit.
2. The case of the plaintiff as made in his original plaint as filed was as follows: The plaintiff is the mortgagee of properties belonging to thesaid John Carapiet Galstaun. The properties mortgaged were (a) premises No. 24 Amratolla Lane,Calcutta, (b) premises No. 96 Karaya Road, Calcutta, (c) premises No. 167/1 and 167/5 Dhurrumtolla Street (Chandni bazar) Calcutta. The mortgages were created by deposit of title deeds madein September 1926. It was agreed by and betweenthe plaintiff and the said Mr. Galstaun that thedeposit of title deeds in respect of all the saidproperties would cover advances already made andto be made thereafter by the plaintiff and interestdue thereon. The monies lent and advanced andsecured by the mortgages as aforesaid were asfollows:
The said John Carapiet Galstaun agreed to pay interest at 9 p. c. per annum on the amounts lent and advanced as aforesaid. Prom time to time the said Mr. Galstaun paid to the plaintiff towards the monies so lent and advanced and interest due thereon the total sum of Rs. 30,000/-. The total amount due to the plaintiff including interest at 8 p. c. per annum on the monies lent as aforesaid was Rs. 4,64,213-5-8 and the plaintiff claimed a decree for the said sum and a preliminary mortgage decree in accordance with Order 34, Rule 4 Civil P. C., and for other incidental reliefs.
3. The case made by the said John Carapiet Galstaun in his written statement filed in this suit was one of total denial. He inter alia denied delivery of documents of title or that the said properties were mortgaged or that there was any agreement that the said deposit would cover advances made or to be made. The said Mr. Galstaun in his written statement further stated that the premises No. 167/5 Dhurrumtolla Street was sold to Khan Bahadoor Shapoor Fredoom Mazda and the premises No. 24 Amratolla Lane was sold by him long ago.
4. By an order made on 23-3-1944 the said Khan Bahadoor Shapoor Fredoom Mazda (Respondent No. 2) was added as a defendant in the suit and necessary amendments were made in the cause title and in the body of the plaint. By another order dated 9-1-1945 Hasan Ayoob (Respondent No. 3), the purchaser of the premises No. 24 Amratolla Lane, Calcutta, was added as a defendant in the suit and necessary amendments were also made in the cause title and in the body of the plaint. The added defendants filed their respective written statements and the defence taken in their written statements is more or less the same as that of the defendant John Carapiet Galstaun. The only additional plea which was specifically taken by the said added defendants was the plea of limitation.
5. Before the suit came on for hearing the defendant John Carapiet Galstaun died and by an order dated 16-3-1949, the respondents (1), (1a) and (1b) as his sons, were substituted in his place as his heirs and legal representatives. On 16-3-1950 the hearing commenced before S.N. Banerjee, J. The plaintiff gave evidence and Mario Galstaun the youngest son of John Carapiet Galstaun and one of the substituted defendants also gave evidence. It is unfortunate that no issue was framed. The principal question agitated at the hearing seems to have been the question of limitation. It appears from the Judgment of the learned Judge that at the time of argument the learned counsel for the plaintiff felt that the plaint required amendment and he asked for an adjournment of the suit in order to enable his client to apply for such amendment which was granted on certain conditions as to payment of costs.
6. Thereafter an application for amendment of the plaint was made and on 3-4-50 an order was made allowing the amendment asked for. As a result of the said amendment two paragraphs numbered 4A and 6A were added, in paragraph 4A the plaintiff stated that there was no specific time for payment of his dues and at the time each advance was made it was agreed by and between the plaintiff and the said Galstaun that the monies so advanced would become due and be repaid on demand being actually made by the plaintiff or on his behalf. In paragraph 6A it was stated that the said 'Galstaun acknowledged his liabilities of the plaintiff's claim in suit by letters dated 5-3-1932 and 17-2-1943 and signed by him thereafter on the day when the suit was again called on for hearing the learned Judge at the request of the learned counsel for the plaintiff gave him leave to recall the plaintiff.
7. Thereafter the plaintiff was further examined and cross-examined.
8. The principal question which, was agitated before the learned Judge was limitation. The learned Judge came to the conclusion that the only debt which was not barred by limitation was the sum of Rs. 2500/- advanced in November1931 and the plaintiff was entitled to recover thesame with interest at the agreed rate. The learned Judge further held that having regard to theBengal Money Lenders Act the plaintiff was notentitled to recover more than double the saidamount. On that basis he declared that theamount due on the mortgage was Rs. 5000/- anddirected a preliminary mortgage decree to bedrawn up accordingly.
9. Against this decree the plaintiff has preferred this appeal. The respondents Khan Bahadoor S.F. Mazda and Hassan Ayoob have also filed a cross-objection.
10. The only question involved in this appeal is the question of limitation. The relevant Article of the Limitation Act is Article 132 the material part of which reads as follows:
'132.To enforce payment of moneycharged upon immovable property.
Whenthe money sued for becomes due.'
11. Mr. Sanyal appearing for the appellant contended before us that the learned Judge was wrong in holding that his client's claim in the suit, except the sum of Rs. 2500/-, was barred by limitation. He contended that learned Judge should have decreed his client's claim in full. In support of his said contention Mr. Sanyal put forth several grounds before us. In the first place Mr. Sanyal contended that if there was a mortgage made on a particular date to secure monies advanced and to be advanced (if that was the agreement between the parties) then there is a single mortgage covering all the sums advanced. In this case, Mr. Sanyal urged, there being an agreement between his client & Mr. Galstaun, as alleged in para 2 of the plaint, namely, that the deposit of title deeds in respect of all the properties would cover advances already made & to be made, the plaintiff's claim in the suit was in respect of a single mortgage covering all the advances. That being so, Mr. Sanyal contended, the period of limitation would run from the date of last advance & because of the acknowledgement contained in the letter dated 17-2-1943 there was no question of limitation relating to any portion of the plaintiff's claim.
12. In support of his contention, namely, that if there is an agreement, that the title deeds will remain security for monies advanced and to be advanced then there is a single mortgage covering all the advances, Mr. Sanyal referred us to the definition of mortgage as given in Section 58, Transfer of Property Act. Section 58 reads as follows:
'58. A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.'
13. In answer to this contention of Mr. Sanyal, Mr. Gupta appearing for the respondents Nos. 2 and 3 in the first, place submitted before us that there was in fact no such agreement as alleged in para 2 of the plaint and, in any event, no such agreement has been established in evidence. In the second place Mr. Gupta contended that even assuming that there was such an agreement, there being no limit fixed upto which advances would be made, there would be as many loans as advances and separate mortgages in respect of each of such loans. The result, according to Mr. Gupta, would be that there were separate mortgages in respect of each loan and limitation would run separately from the date of each of such loans; Mortgagor in such a case, he contended, had the right to pay each loan separately and the mortgagee, except for the bar created by Section 67A, can sue separately for enforcement of security in respect of each of such loans. In support of his contention Mr. Gupta referred us to Section 79, Transfer of Property Act, which reads as follows:
'79. If a mortgage made to secure future advances, the performance of an engagement or the balance of a running account, expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances or debits not exceeding the maximum, though made or allowed with notice of the subsequent mortgage.'
Mr. Gupta contended that the fact that an intermediate mortgagee can in certain circumstances (mentioned in the said section) get precedence over subsequent advances shows that each advance formed separate loan and. there were separate mortgages in respect of each of such loans. In other words, Mr. Gupta's contention was that if all the advances formed one loan as contended by Mr. Sanyal then there cannot be under any circumstances an introduction of an intermediate mortgage and such introduction is possible only on the basis that each advance formed a separate loan. In other words, if once a loan can be broken then it is not one loan, and similarly, if the unit of a mortgage can be broken then it is not one mortgage. In support of his contention Mr. Gupta also referred us to Section 93 Transfer of Property Act, which inter alia provides that except in the case provided for by Section 79 no mortgagee making a subsequent advance to the mortgagor whether with or without notice of an intermediate mortgage shall thereby acquire any priority in respect of his security for such subsequent advances. Mr. Gupta also relied on -- 'Hopkinson v. Rolt', (1861) 9 H. L. C. 514 (A); -- 'Union Bank of Scotland v. National Bank of Scotland', (1886) 12 A. C. 53 (B); -- 'Imperial Bank of India v. U Rai Gyaw Thu & Co. Ltd.', AIR 1923 PC 211 at pp. 215-217 (C) and contended that Section 79 is an exception to the general rule that priority of mortgages would be in order of dates and such exception also came to be made in the English law (Hals. Vol. XV, p. 273).
14. In my opinion if there was an agreement as alleged in para 2 of the plaint then the contention of Mr. Sanyal should prevail. In other words, if I hold that there was an agreement between the plaintiff and the said Galstaun that the deposit of title deeds in respect of all the properties would cover the advances already made and to be made then there is a single mortgage covering all the advances and the period of limitation would run from the last of such advances. But I am unable to hold on the facts of this case that there was any such agreement. At the very outset I should mention that it does not appear that this contention of Mr. Sanyal was raised before the trialCourt. On the other hand the learned Judge in his judgment stated as follows:
'The plaintiff in his evidence has made it quite clear that the loans given at different dates were distinct transactions and his counsel has admitted limitation runs from the different dates on which the advances were made.'
His Lordship then proceeded to deal with the question of limitation on that basis. I find it difficult to understand how in the face of these observations Mr. Sanyal can still contend that there was such an agreement as alleged in para 2 of the plaint and urge his points of law on the basis of such, an agreement. However as Mr. Sanyal did not concede before us that such an admission as mentioned by the learned Judge in his judgment was in fact made by the learned counsel appearing for the plaintiff we allowed him to urge this point in this appeal. But as I have already said I am unable to hold that there was any such agreement.
15. The agreement in question has been pleaded in paragraph 2 of the plaint. Except stating that there was such an agreement no particulars thereof have been given in the said paragraph. Neither the date nor the place of the said agreement is mentioned nor has it been stated whether the said agreement was verbal or in writing. It was only when the defendant's attorney wrote to the plaintiff's solicitor asking for particulars as to 'when & where the alleged agreement took place' that the plaintiff through his solicitors stated that it was 'In September 1926 at defendant's office in Calcutta and in 1933 at defendant's office In Calcutta.' The evidence of the plaintiff on this point is very unsatisfactory.
Before I deal with the said evidence it would be convenient to refer to the material correspondence which passed between the parties and/or their solicitors and to see whether or not the case of the plaintiff relating to the agreement in question is borne out by the said correspondence. It appears that on 31-8-1926 the plaintiff wrote to Mr. Galstaun that he had advanced a further loan of rupees one lac on that day and Mr. Galstaun had promised to deposit the title deeds of Amratolla Lane and Karaya Road properties as securities for the loan. Prior to the said date and on 2-8-26 a sum of Rs. 2500/- had been advanced by the plaintiff. On 8-9-1926 Mr. Galstaun wrote to the plaintiff inter alia as follows:
'I hand over to you the title deeds of the following properties as collateral security for the repayment of the loan of rupees one lac taken from you and interest thereon.'
The properties mentioned were 24 Amratolla Laneand 96 Karaya Road. Thereafter on 10-9-1926the plaintiff again wrote a letter to Mr. Galstaunand it is upon this letter that Mr. Sanyal placedthe utmost reliance in support of his client's case.The said letter was as follows:
'No. 6726 10-9-1926
J.C. Galstaun, Esqr.,
I thank you very much for handing over to me title deeds of 24, Amratolla Lane and 96, Karaya Road, Calcutta, as security for your debts. I advanced to you today a further sum of Rs. 55,000/-. You have promised to sendme the title deeds of Chandni properties. Please send the same soon. I place it on record that the title deeds of all the above properties should be held by me in deposit as security for the loans already advanced to you and the further loans to be advanced to you by me with interest on such loans at 9 per cent, per annum.
Durga Prosad Chamria.'
Mr. Sanyal contended that this letter shows that there was an agreement that all the title deeds should be held in deposit as security for loans already advanced & to be advanced. I am unable to accept this contention. In the first place there is no letter from Galstaun confirming such arrangement. On the other hand, the letter of B.N. Basu & Co., Solicitors for the plaintiff written on the very next day, i.e., 11-9-1S26 shows quite clearly that there could not have been any such arrangement. In the said letter Messrs. B.N. Basu & Co. wrote as follows:
'No. J/13278. Temple Chambers,
6, Old Post Office Street,
J.C. Galstaun, Esqr.,
Re: 167/1 and 167/5, Dharamtolla Street,
We understand from our client Babu Durga Prosad Chamria that as collateral security for the loan of Rupees 55,000/- advanced by him to you herein you have agreed to deposit with him the title deeds of the premises No. 167/1 and 167/5, Dharamtolla Street. Some of the title deeds have been sent to us by Messrs. K. K. Putt & Co., on your accountable receipt.
We are instructed by our client to request you to instruct Messrs. K. K. Dutt & Co. to cancel our said accountable receipt as those title deeds should now remain with our client as security. Please also send us the remaining title deeds of the properties which will also be held by our client in deposit as security for the said loan. We understand that the loan was obtained by you from our client for obtaining the other title deeds from your 'Bankers.
We further understand that until the transactions mentioned in our letter No. J/13191 dated the 10-9-1926 are completed the above premises will stand charged with the payment of all our client's dues.
B. N. Basu & Co.'
16. The transaction referred to in the last paragraph was a proposed lease for 99 years in favour of the plaintiff of the said Dharamtolla Street properties (Chandney Bazar) with option of purchase but the said transaction did not materialise. Reliance was placed by the learned counsel for the appellant on the words 'will stand charged with the payment of all our client's dues' appearing at the end of the said letter in support of his client's case. In my opinion, reading the letter as a whole the words 'all our client's dues' must mean dues secured on the premises No. 167/1 and 167/5 Dharamtolla Street. In other words, all that is indicated in the last paragraph of the said letter is that until the transaction mentioned therein (i.e. proposed lease in favour of the plaintiff with option to purchase) is completed the charge created on the said premises will continue. There is no mention in this letter of any agreement to hold all the title deeds as security for the loans advanced and to be advanced. On the other hand this letter shows that the agreement was that the title deeds of the Dharamtolla properties would be deposited as collateral security for the loan of Rs. 55,000/- and the said title deeds would be held as security for the said loan. The matter does not rest here. It appears that on 15-9-1926 Messrs. B. N. Basu & Co. solicitors for the plaintiff wrote another letter to Mr. Galstaun wherein it was stated as follows:
'You have made over to us the original conveyance from the Official Assignee in your favour. The said conveyance will also remain in deposit with our client Babu Durga Prosad Chamria along with the other title deeds as collateral security for the loan advanced by him to you until the transactions mentioned in our letter No. J/13191 of the 10th instant are completed. Please confirm this.'
Thereafter Mr. Galstaun by his letter dated 16-9-1926 confirmed that the said conveyance had been deposited by him with Babu Durga Prosad Chamaria as collateral security for the loan taken by him from Babu Durga Prosad Chamaria. Mr. Gupta contended that this loan was the Joan of Rs. 55,000/- only. In any event the loan referred to in the said letter must be the loan advanced upto the date of that letter. Even then the result is the same. This correspondence instead of supporting the contention of Mr. Sanyal negatives the same. In my opinion the correspondence shows quite clearly that there was no such agreement as alleged in para 2 of the plaint.
17. I shall now deal with the oral evidence of the plaintiff; I have already indicated that the oral evidence of the plaintiff on, this point is very unsatisfactory. I should mention once again that the plaintiff at first gave evidence at the trial on his case as made in the original plaint. Thereafter the case was adjourned and subsenuently the plaint was amended. Thereafter the plaintiff was recalled and he was again examined and cross-examined. I shall first consider his evidence given before the amendment of the plaint and see whether or not the case of the agreement as alleged in para 2 of the plaint can be said to have been established on such evidence. It should be remembered that in the plaint as originally filed this agreement was pleaded. Therefore one would expect that the 'plaintiff would give whatever evidence he could give regarding the said agreement in his evidence given before the amendment. But his only evidence, given on this point prior to the amendment is as follows :
'82. Q. Particularly the letter of 16-9-1926? A. There is reference to the properties at Dharamtolla commonly known as Chandni Chawk in the letter of 16-9-1926. That letter was addressed to B. N. Basu & Co. and written by Mr. Galstaun on my behalf. The title deeds were deposited With my agent B. N. Basu & Co., in respect of the money that I had advanced and also in respect of future advances and all these properties were to remain charged to me for the money that I had advanced and that I would be advancing in future.'
Except a bare statement that the title deeds were deposited in respect of monies that he had advanced and future advances the plaintiff did not say anything about any Agreement between him and Mr. Galstaun nor does he give the date or other particulars of such agreement.
18. It was after he was recalled, and not before a number of questions were put to him by his counsel, that he stated that on 10-9-1928 the terms were settled amongst others that for all these loans which he had advanced and which he might advance in future all the said three properties would remain as security (Q. 333-334). But prior to this the plaintiff had stated that the deposit of title deeds of Dharamtolla properties were made to his agent Messrs. B. N. Basu & Co. (Q. 304) and that with regard to the loan, that the plaintiff gave him, Mr. Galstaun did not hand over any title deeds to him personally (Q. 308). What could then be the occasion for this discussion and settlement of the terms between him and Galstaun. In fact even in answer to Q. 333-334 the plaintiff does not say that the terms were settled between him and Galstaun although that was his case as made in the answer given to the particulars asked for by the defendant's solicitor. Except the plaintiff no one else was called to give evidence on this point. It is impossible for me to hold, on this state of evidence, that there was any such agreement as alleged in para 2 of the plaint. In my opinion the plaintiff has failed to establish that there was arty agreement between him and Mr. Galstaun that the deposit of title deeds in respect of all the properties would cover the advances already made and to be made in future.
Having come to the aforesaid conclusion it becomes unnecessary for me to decide the question of law raised by Mr. Sanyal, because such question would arise for our consideration only if we hold that there was in fact such an agreement between the plaintiff and Mr. Galstaun. But as the question has been argued at some length by the learned Advocates for both parties I shall shortly indicate my views thereon. In my 'opinion, as a pure point of law, the contention of Mr. Sanyal, namely, where there is an agreement that the title deeds deposited would cover, advances already made and to be made there is one mortgage covering all the advances, and the limitation would run from the date of the last advance made, should be accepted as correct. 'A mortgage' as defined in Section 58, Transfer of Property Act
'is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.'
Thus there can be a mortgage for the purpose of securing money advanced and also to beadvanced. If therefore there is transfer of an interest in immovable property (either by a deed or deposit of title deeds) and such transfer is made to secure advances already made and to be made then there is a mortgage and all the advances which may have been made both prior to the date of the said transaction and subsequent thereto would be covered by the said mortgage. In other words, there is in such a case one mortgage covering all such advances. This result, in my opinion, follows from the definition of 'mortgage' as given in the Transfer of Property Act. I do not think Section 79 indicates, as contended by Mr. Gupta, that in respect of subsequent advances, even under such an agreement, there are separate mortgages. I cannot accept Mr. Gupta's contention on this point.
Section 79 as also Section 93, Transfer of Property Act only deal with the question of priority, i.e., question of adjustment of the rights of the different mortgagees. In other words, these sections deal with the question as to what would be the position of an intermediate mortgagee, what are the circumstances under which such intermediate mortgagee would have priority over subsequent advances in respect of the first mortgage. Effect of Section 79 is that if a mortgage made to secure, future advances expresses the maximum to be secured thereby, a subsequent mortgagee, if he tabes with notice of the prior mortgage, shall be postponed to the prior mortgagee in respect of all advances made subsequent to his mortgage. Effect of Section 93 on the other hand is that in all other cases, not covered by Section 79, i.e., where maximum is not expressed or where subsequent mortgagee has no notice of prior mortgage, the intermediate mortgagee will get precedence over all subsequent advances. Thus these two sections deal with respective rights of two different mortgagees and this question of priority of their respective mortgages. They do not deal with the question relating to the constitution of a mortgage.
In other words, these two sections do not purport to deal with the question which is now before us, i.e., whether or not in a case where there is a transfer of interest (by deed or by deposit of title deeds) to secure past as well future advances there is one mortgage covering all the advances or different mortgages in respect of different advances made. Those sections deal with a case where there are two different mortgagees and determine their respective rights and priorities in the circumstances mentioned. They have no relevancy to a case where there is only one mortgagee and to the question relating to the character or constitution of the said mortgage. On the other hand, the language used in Section 79 suggests that a mortgage to secure future advances as well is one mortgage. The starting words of Section 79 are 'If a mortgage made to secure future advances.......... expresses the maximum to be secured thereby'. These words to my mind suggest that a mortgage in all to secure future advances is one mortgage. This view is also supported by the subsequent words used in the section, namely, 'be postponed to the prior mortgage in respect of all advances'. Thesewords also in my opinion suggest that the advances though subsequently made are all in respect of one mortgage, i.e., 'the prior mortgage.'
19. I have therefore come to the conclusion that had the agreement pleaded in para 2 of the plaint been established then in law there would have been one mortgage covering all the advances and the limitation would have run from the last date of such advances. But in view of the fact that on the evidence in this case I am not prepared to hold that there was any such agreement the question as to whether or not there was in law one mortgage covering all the advances does not arise. This ground urged by Mr. Sanyal must therefore fail.
20. As for the English decisions cited by Mr. Gupta, I need only say that the same, in view of the clear provisions of the Indian Law, are of no assistance to us for the present purposes. The decision in AIR 1923 PC 211 (C), lays down nothing more than what is provided in Sections 79 and 93, Transfer of Property Act. As in that case the maximum was not fixed it was immaterial to consider whether notice was to be imputed to the second mortgagee because he had omitted to enquire for the documents. I do not think this case is of any help to Mr. Gupta for his present contention.
21. I shall now consider the other contentions raised by Mr. Sanyal. Mr. Sanyal contended that the learned Judge should have held that at the time each advance was made it was agreed between the plaintiff and Mr. Galstaun that the monies so advanced would become due on demand being actually made for it. I should at this stags mention once again that this case was made for the first time in para 4A of the amended plaint. It was not made in the plaint as it originally stood. No explanation is available as to why this was not done. It should also be remembered that the amendment was asked for after the evidences were closed and at the stage of the argument. Apart from these circumstances, there is really no evidence on which the case as made in para 4A of the plaint can be said to have been established. The only evidence is to be found in answer to Q. 206 which reads as follows;
'206. Q. What were the terms of the loan? A. The terms were as follows : whenever I would be demanding money, the money would be paid back by Mr. Galstaun with interest at 9 per cent. per annum and alternatively when Mr. Galstaun would feel it convenient to pay back the money to me, I would be accepting it. There was no period of time fixed for the repayment of the loan.'
This answer to my mind does not establish the said case of the plaintiff. In this answer the plaintiff is not saying that the money would be payable only when demand was made. In other words, the plaintiff is not making the case that whenever he would want money he would have to make a demand. That is not the effect of this answer. On the other hand the latter portion of this answer suggests a contrary effect. It shows that Mr. Galstaun can pay the moneyat any time (whether or not any demand is made for it) convenient to him and the plaintiff would be bound to accept the same. Mr. Gupta contended, and I agree with his contention, that not only there is no evidence to support this case of the plaintiff but whatever evidence there is destroys the said case. There is another answer of the plaintiff (Answer to Q. 76) to which the learned Judge referred in his judgment while dealing with this question. That answer also in my opinion does not in any way improve the plaintiff's position relating to this matter. The plaintiff does not in his said answer say that it was one of the terms of the agreement between the parties that the mortgage money would become due and payable 'only' when demand is made. All that the plaintiff says in his said answer is that in case he demanded money and Galstaun did not pay he might realise his money from the property. This is something different from saying that the money would not become payable unless demand is made.
22. Mr. Sanyal then referred us to the plaintiff's answer to Q. 334 as supporting the plaintiff's case regarding the said agreement. In my opinion the said answer instead of supporting the said case of the plaintiff negatives it. In this answer the plaintiff said that whenever he would demand the money it would be repaid by Galstaun and whenever Galstaun would feel convenient to pay the amount he would be entitled to do so. As laid down by their Lordships of the Judicial Committee, in the case of -- 'Lasa Din v. Gulab Kunwar , the mortgage money does not become due until both the mortgagor's right to redeem and mortgagee's right to enforce his security have accrued. In other words, the mortgage money would become due when both the rights of the mortgagee to sue and of the mortgagor to redeem would coalesce. Judged by this test this answer does not show that money would become due on demand. If Galstaun can pay the money whenever it is convenient to him to do so then he can pay even before a demand is made. How then can it be said that the mortgage money would become due only when a demand is made? Because if that was so then Mr. Galstaun also could not pay before a demand was made. This answer in my opinion instead, of supporting the plaintiff's case regarding the agreement as alleged in para 4A of the plaintiff destroys it. This contention of Mr. Sanyal must, therefore, fail.
23. Mr. Sanyal then contended before us that if in a mortgage no time for payment is fixed then the mortgage money becomes payable only when a demand is made. In trying to maintain this contention Mr. Sanyal found himself in a difficult position. When asked by, us as to what would be the consequences, if before demand is made mortgagor offers to pay the mortgage money, can the mortgagee in such a case prevent the mortgagor from making the payment and say that the mortgagee is not bound to accept She same until he chooses to make a demand? Mr. Sanyal had to change his original position and said that the starting point of limitation would be from the expiry of the period of reasonable notice to be given by either side. Then when asked as to what would be the starting point of limitation if notices are given by both the parties containing different dates or if both notices are unreasonable Mr. Sanyal had, once again, to change his position and said that in such a case the Court will fix the period on the expiry of which the limitation will begin to run. I am unable to accept the contention of Mr. Sanyal. I agree with the learned Judge that if no date is fixed then the money becomes due on the date of the mortgage and the limitation under Article 132 would run from the said date, (-- 'Nilcomal Pramanick v. Kamini Koomar', 20 Cal 269 (E)).
Mr. Sanyal relied on the decision of the Judicial Committee in the case of 'Nilkanth Balwant v. Vidya Narasimh , and on the observations of their Lordships at pp. 192-193. In my opinion it was on the facts of that case that their Lordships of the Judicial Committee held that the money did not become due until a demand was made. Their Lordships did not lay down any general proposition that in every case where no date for payment is fixed in the mortgage deed the mortgage money would not become due until a demand is made for the same. This seems to be clear from the very observations of their Lordships on which Mr. Sanyal relies which read as follows :
'There was no specific time fixed for payment and their Lordships are of opinion on the facts of this case that the money did not become due and the cause of action did not arise until demand for payment of the mortgage debt was made by the mortgagee and it was refused by the mortgagor'.
In my opinion therefore this contention of Mr. Sanyal must fail.
24. Mr. Sanyal then contended before us that if no time is fixed then the intention of the parties as to the time of payment should be gathered from the circumstances. In this case, Mr. Sanyal contended, the parties did not intend that the money would be payable immediately but the intention of the parties, as it appears from the circumstances, was that the money would be payable only when a demand was made. This case was not made in the plaint. There is no suggestion in the plaint of any implied agreement. On the other hand the case made in the amended plaint was that of an express agreement. In the premises plaintiff in my opinion should not have been permitted to urge this point at the hearing. The learned Judge, however, has gone into the merits of this contention and has come to the conclusion that there is no substance in the same. I see no reason to differ from the view taken by learned Judge on this point. The- peculiar feature, in this case, on which reliance was placed by the plaintiff to show that the intention of the parties was that the money would become payable only when a demand is made, was the negotiation for lease of the Dharamtolla properties. But, as the learned Judge pointed out in his judgment, the negotiation for the lease came to an end in 1926 and that is also the evidence of the plaintiff himself. I am unable to accept this contention of Mr. Sanyal who also, after some time, did not press this point.
25. I therefore hold that there being no such agreement as pleaded in para 2 of the plaint and demand not being a term of the contract time runs from the date of each loan.
26. I now come to the last and perhaps the most important question involved in this appeal and that is the question of acknowledgment. The plaintiff in para 6A of his plaint relied on two letters whereby the said Galstaun is said to have acknowledged his liabilities of the plaintiff's claim in this suit. They are dated 5-3-1932 and 17-2-1943. On behalf of the respondent it is admitted that the letter dated 17-2-1943 amounts to an acknowledgment. The real dispute is with regard to the letter dated 5-3-1932. Does it amount to an acknowledgment? I should at this stage mention that the letter dated 17-2-1943 only saves the last of the advances in question, i.e., the advance made on 27-11-1931 for the sum of Rs. 2500/- from the bar of limitation. The rest of the advances are not saved by the acknowledgment contained in the said letter. I should also mention that it was admitted by both, the parties before us that in case we hold that the letter dated 5-3-1932, amounts to an acknowledgment of the plaintiffs claim by Mr. Galstaun then only the sums of Rs. 20,000/- and Rs. 35,000/- (total Rs. 55,000/-) both advanced on 10-9-1926 would be saved from the bar of limitation. Therefore the real question in dispute between the parties is, does the said letter dated 5-3-1932 amount to an acknowledgment? The said letter dated 5-3-1932 reads as follows:
1A, Mission Row,
'My dear Durgaprosad,
Chandney Bazar is again advertised for sale on Friday the 11th instant. I am afraid it will go very cheap. I had a private offer of 275000 a few days ago, but as soon as they heard it was advertised by the Registrar they withdrew. As you are interested why do not you take up the whole. There is only about 70000 due to the mortgagee -- a payment of 10000/- will stop the sale.
Mr. Sanyal contended before us that this letter constitutes an acknowledgment of the debt secured by the Chandni Bazar property and this he says is clear from the words used in the letter, namely, 'as you are interested' and 'why not take up the whole'. Mr. Gupta on the other hand contended that the words in the said letter do not amount to an acknowledgment of an existing mortgage in favour of the plaintiff, because, it is not known what other transactions Galstaun had with the plaintiff.
27. In my opinion the contention of Mr. Sanyal on this point should be accepted. As the learned Judge himself pointed out in his judgment
'an acknowledgment needs only facts from which the Court can reasonably draw an inferenceof liability. The acknowledgment itself neednot specifically state the debt that is payableor any legal inference which the Court is todraw from the facts stated.'
Again, evidence is admissible to show how the language used is related to the existing facts. In other words, the true meaning of the language used -- whether or not there is an admission of debt -- may be gathered from the surrounding circumstances. 'Beti Maharani v. Collector of Etawah', 22 Ind App 31 at p. 40 (PC) (G), per Pry, L. J. quoted at p. 518 and p. 632 in --'Spencer v. Hemmerde', (1922) 2 AC 507 (H). In the present case, the statements in the letter in question, from which an inference of liability is sought to be raised are 'as you are interested' and 'why not take up the whole'. Mr. Sanyal contended and I agree with him that the surrounding circumstances of this case make the meaning of these words clear and there is an admission of an existing mortgage debt. What then are those surrounding circumstances? Durga Prosad was the mortgagee of the Chandney Bazar property over which there was a first mortgage. The said property was previously advertised for sale at the instance of the first mortgagee and 27-11-1931 was the date fixed for sale by the Registrar. On 26-11-1931 Galstaun wrote the following to Durga Prosad Chamaria :
1A, Mission Row,
'My dear Durgaprosad,
Will you kindly see me tomorrow morning between 9 & 10 a.m. as the Chandney Bazar property is being sold at the Registrar's sale on behalf of the first mortgagee tomorrow at 12 O'clock? The matter is urgent, otherwise the property will be sacrificed.
28. It appears that on 27-11-1931 Durga Prosad Chamaria paid to Galstaun Rs. 25,00/- by way of loan and the sale was stopped for the time being. The said property was again advertised for sale on 11-3-1932. It was then that Mr. Galstaun wrote the letter in question to Durga Prosad Chamaria. The language used in the letter has to be understood in the light of these circumstances. In that letter Mr. Galstaun informed Durga Prosad Chamaria that the said property was again advertised for sale and expressed his apprehension that it will go very cheap. He then wrote as follows :
'As you are interested why do not you take up the whole? There is only about Rs. 70,000 /- due to the mortgagee -- a payment of Rs. 10,000/- will stop the sale.'
The crucial question is what is the meaning of the words 'you are interested, why not take up the whole'. Interested as what? What is 'the whole' which Chamaria is being asked to 'take up'. If the word 'interested' means interested as a mortgagee then there is an acknowledgment of the mortgage debt in respect of the said property. Having regard to the circumstances to which I have referred the word 'interested' in my opinion means. 'interested as mortgagee'. This view alsofinds support from the use of the words 'why not take up the whole' and 'there is only Rs. 70,000/-due to the mortgagee'. In my opinion having regard to the circumstances mentioned the words 'take up the whole' means 'take up the first mortgagee's interest as well' -- Chamaria having only the interest of a second mortgagee -- and only Rs. 70,000/- being due to the said mortgagee.
Mr. Gupta contended that we do not know what other transaction Galstaun had with Durga Prosad Chamaria. But Chamaria in his evidence made it quite clear that at that time he had no Interest except as mortgagee. (Vide Q. 100, 101, 194 and 198). The negotiation for buying the property, about which he gave evidence in his previous answers, took place in 1926. No such negotiations took place in 1932 and in 1932 only the mortgage was standing. In Q. 121 he was again asked if there was any other account between him and Mr. Galstaun apart from the mortgage and he stated quite clearly in answer to the said question that there was no other account at that time. In my opinion, having regard to all the circumstances to which I have referred, the 'interest' mentioned in the said letter must mean the 'interest' of a mortgagee and there is thus an acknowledgment of the mortgage debt over the Chandni properties in favour of Durga Prosad Chamaria. In this view of the matter I hold that the claim of Rs. 55,000/- secured on the premises No. 16771 and 16775 is not barred by the law of limitation.
29. I have already held that the advance of Rs. 2500/- made on 27-11-1931 is not barred by the law of limitation because of the acknowledgment contained in the letter dated 17-2-1943. Mr. Gupta also did not dispute that the said letter 'although' to use his own expression 'was an extreme case of an acknowledgment' amounted to an acknowledgment of Galstaun's liability to the plaintiff. The said advance was made to stop the sale of Dharamtolla properties and in the circumstances it should be regarded as a fresh advance on the security already furnished, namely, Dharamtolla properties. I therefore hold that the decision of the learned Judge regarding the said sum of Rs. 2500/- should stand.
30. Before concluding my judgment I should refer to the cross-objection filed by the respondent Khan Bahadoor Shapoor Fredoom Mazda and Hassan Ayoob against the judgment and decree of Benerjee J, Several grounds have been taken in the memorandum of cross-objection but none of them was pressed before us. Mr. Gupta however in the course of his arguments stated that the only loans which were secured were Rupees one lac secured on Karaya and Amratolla properties and Rs. 55,000/- secured on Chandni Bazar properties and there were ho securities for other loans. The only effect of this contention on the result of this appeal would be that in respect of Rs. 2500/- advanced on 27-11-1931 only a money decree could be passed. As I have just now said, no such ground has been taken in the memorandum of cross-objection. Mr. Gupta also, except referring to it in his argument, did not develop it. In any event as I have already held the said sum should be regarded as a fresh advance on thesecurity already furnished, namely, Chandnibazarproperties.
31. In the result, therefore, this appeal is allowed in part. The judgment and decree of the Court below is, so far as it relates to the advance of Rs. 55,000/-, set aside. We hold that the principal amounts due to the plaintiff are Rs. 55,000/-and Rs. 2500/- and the rate of interest payable therein is 8 per cent simple, the total amount payable being subject to the maximum allowable under the Money Lenders Act. There will be a usual preliminary mortgage decree in Form No. 5, Appendix D, to the Code of Civil Procedure. The account is to be taken in accordance with the provisions of Bengal Money Lenders Act and decretal amount will be payable in two equal annual instalments, the first of such instalments to be paid within six months from, the date of countersignature of the Report of the Registrar and the 2nd within a year therefrom. The costs of the appellant of this appeal and of the lower Court will be added to his claim. The decree to be drawn up in accordance with the provisions of Bengal Money Lenders Act. The question as to the appropriation of Rs. 50,000/- paid by Galstaun to earlier items of amounts advanced by the plaintiff is left open to be dealt with in the accounts. Further directions regarding the substituted security and any other matter to be dealt with by the trial Court.
32. Certified for two Counsel.
33. I agree that the appeal should be disposed of in the manner proposed by my learned brother and for the reasons given by him. In view however of the very interesting argument addressed to us on the question of law involved, I should like to add a few words on them.
34. All the questions of law bear on the point of limitation. It was contended on behalf of the appellant that the deposit of title deeds with him was for the purpose of securing the repayment of moneys advanced and to be advanced and that what resulted from the transaction was a single, mortgage, covering all the advances made. If there was a single mortgage, it was said that it operated in law to bind together all the several loans covered by it and that from that circumstance two results followed. The first was that if, for the reason that no time was fixed for payment, the money became due within the meaning of Article 132, Limitation Act, at the date of the loan, such date would be the date when the last of the advances was made, because it was on that date that the making of the loan was completed. Time would not therefore begin to run before the date of the last of the advances. The second result of the several advances constituting a single loan, it was said, was that if there was a subsequent acknowledgment of liability, it would cover all the several advances and save limitation with respect to all of them. Since the last of the advances in the present case was made on 27-11-1931 and the suit was not brought till 18-5-1944, the appellant needed acknowledgments to save limitation for his suit, even if the advances he was suing to recover constituted a single loan. Two acknowledgments were therefore relied on. But it was also argued that there was a stipulation between the parties that the advances would be repayable only upon a demand being made and as no, demand was made till 29-4-1944, it was contended that no question of limitation could arise, even -if the loans were separate loans. It was also argued that irrespective of any stipulation for a demand, the money would not become due and time would not begin to run till the demand was made, since there was no time fixed for payment.
35. My learned brother has found and I agree with him that, as a matter of fact, there was no mortgage in this case to secure the payment of advances made and to be, made, but only separate loans, though they might all be secured. Apart from any other circumstance, it appears to me that if all the advances were but parts of a single loan, being parts of the consideration for a single mortgage, it is strange that in making up the accounts, the appellant should have computed the interest on the several advances separately as from their respective dates. My learned brother has also found and again I agree with him that the appellant has failed to prove a stipulation that the loans would not become due and payable before a demand was made. I also agree with my learned brother in the construction placed by him on the letter of 5-3-1932 as constituting an acknowledgment of liability in respect of the sum of Rs. 55,000/- advanced on the security of the Dhurumtolla properties.
36. In view of the above findings, no question of law really arises, except the general one that whenever there is no time fixed for the payment of a mortgage loan, it does not become due till a demand for payment is made, even if there be no stipulation for such a demand. I shall, however, deal with the other question as well on the assumption that the mortgage created in this case by the deposit of title deeds was intended to secure the advances made before the deposit as well as those made after and that our finding to the contrary is wrong.
37. To take the latter question first, the appellant contended that it was involved in the very definition of mortgage contained in Section 58(a), Transfer of Property Act, that when there was a mortgage to secure advances made & to be made, all the advances covered by the mortgage constituted a single loan. The respondent contended on the other hand that, even in such a case, the advances were separate loans, as would appear from Section 79 and the second part of Section 93 of the Act. More fully stated, the respondent's contention was as follows: when advances are made from time to time on the security of the same properties, there are as many loans as the advances, though all are secured by the same property and the result is that in respect of each loan, time runs separately from its own date. The mortgagor has the right to pay off each loan separately and relieve the property of the burden of that debt under the provisions of Section 61 of the Act and the mortgagee cannot say that all the loans must be paid. The mortgagee himself can sue separately for the enforcement of his security in respect of each loan, except for the bar of Section 67A, which compels him to join all his claims in the absence of a contract to the contrary, but the right given to the mortgagor by Section 61 is in no way affected by the restriction imposed on the mortgagee by Section 67A. Both Section 79 and the second part of Section 93 clearly regard the several advances made under the same mortgage as separate loans.
38. The view that even when there is a mortgage to secure advances made & to be made, the several advances constitute separate loans will not, it appears to me, work, although I am free to confess that the other view of the unity of the advance is not wholly unattended with difficulty. To begin with Section 58(a) which is the definition section, it speaks of a mortgage 'for the purpose of securing the payment of money advanced or to be advanced by way of loan.' It is well established that this language does not merely contemplate mortgages to secure only moneys already advanced and mortgages to secure future advances only, but covers mortgages to secure moneys already advanced and also to be advanced. The section does not say that when future advances are to be covered by a mortgage, any maximum limit is necessarily to be fixed. It contemplates all cases, whether the future advances are to be upto a stated limit or unlimited & describes the security even in respect of such cases as 'a mortgage', that is to say, one mortgage. If the several advances constituted separate loans even in such a case, it is difficult to see how it would be a case different in any way from a case of successive mortgages of the same property to secure successive loans. The description 'a mortgage' would, on such construction of the transaction, be wholly inappropriate. One mortgage and several loans is, it is needless to say, an impossible notion. If the loans be not paid amicably, it would mean several suits to enforce the same mortgage, to be brought within different periods, computed from the dates of the respective loans. I do not think that either Section 61 or Section 67-A to which reference way made is relevant, because both contemplate 'two or more mortgages' executed by the same mortgagor in favour of the same mortgagee. There is no 'a mortgage' in the contemplation of those sections.
39. On behalf of the respondents it was contended by Mr. Gupta that, in any event, Section 79 and the second part of Section 93 made it perfectly clear that the Act regarded moneys severally advanced on a mortgage to secure advances made and to be made as separate loans. Section 79 is limited to cases where the maximum of the amount, to be secured is stated and it provides that in such cases
'a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances....not exceeding the maximum, though made or allowed with notice of the subsequent mortgage.'
The second part of Section 93 provides that
'except in the case provided for by Section 79, no mortgagee making a subsequent advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his security for such subsequent advance.'
The phrase 'except in the case provided for by Section 79' was construed by the Judicial Committee in the case of AIR 1923 PC 211 (C), as meaning except in the case where a maximum was expressed. The effect of the two sections, therefore, is that where a mortgage to secure future advances expresses the maximum to be secured, but after certain advances within the maximum have been made, a second mortgage is executed, the second mortgagee, if he had notice of the prior mortgage, will have to yield to the prior mortgagee in respect of further advances made by the latter up to the maximum stated, although such advances may be made with knowledge of a subsequent mortgage; but if no maximum was expressed or if the subsequent mortgagee had no notice of the prior mortgage, the prior mortgagee making further advances after the second mortgage will have no priority in respect of such advances. Section 93 is thus complementary to Section 79. Mr. Gupta contended that if the mortgagee of a mortgage to secure advances made and to be made was to be postponed to a subsequent mortgagee in respect of advances made by him after such subsequent mortgage in the circumstances stated in Sections 79 and 93, it was clear that the several advances made under the prior mortgage did not constitute a single loan, because if they did, they would be merely payments by instalments of the original consideration for the prior mortgage and therefore they could not be treated separately and the prior mortgagee could not be denied priority in respect of them.
40. The argument is a plausible one and undoubtedly attractive, but as I have said already, the view put forward by Mr. Gupta will not work. I may state the reason at once. If the several advances were separate loans, as contended by Mr. Gupta, those subsequent to the advance or advances made by the second mortgagee would be subsequent loans in fact and consequently a notice of the prior mortgage ought not to have made any difference and there could be no valid reason for postponing the second mortgagee to the prior mortgagee in respect of such advances in case he had notice of the prior mortgage. The fact that a notice makes a difference and postpones the second mortgagee to the first rather suggests the unity of the advances than their diversity.
41. I confess that it can on the other hand be said, with equal reason, that if there be only one mortgage and only one loan, though constituted of several advances, then there would be a prior mortgage in fact and in law in respect of all the advances and consequently in order to make a second mortgage subordinate to it, no notice of it to the subordinate mortgagee should have been required and, where no maximum is expressed, antecedent advances made by the subsequent mortgagee could not have been given priority in all cases, irrespective of any notice of such subsequent mortgage, as laid down in the second part of Section 93.
42. It appears to me that with regard to the question as between a mortgagor and the mortgagee as to whether advances made under a mortgage to secure moneys advanced and to be advanced constitute a single loan, the answer isnot to be found in Sections 79 and 93. Those sections deal with a case where there is a competition between two mortgagees and an artificial rule of priority is prescribed by them. To seek in the provisions of those sections any guidance as to whether there is a single loan or separate loans when several advances are made under a mortgage to secure moneys advanced and to be advanced, is only to land oneself into difficulties which cannot be satisfactorily solved. Indeed, Mr. Gupta was himself constrained to concede, towards the end of his argument, that at least in cases where a maximum was expressed, advances made up to the maximum could be said to constitute a single loan and he suggested that when Section 58(a) referred to 'a mortgage..... .for the purpose of securing the payment of money advanced or to be advanced', it contemplated a transaction where a maximum was expressed.
I may also point out that Section 79 speaks only of 'a mortgage made to secure future advances' and not of a mortgage to secure moneys advanced and to be advanced. The second part of Section 93(a), again, obviously refers to the same class of cases as is contemplated by Section 79, although it may also refer to a case where a prior mortgagee makes a subsequent advance under a second and separate mortgage of the same property. It is at least doubtful whether those sections at all refer to a case where there is a mortgage to secure both advances already made and to be made, but in any event, they do not seem to be addressed to laying down that each advance made under such a mortgage is a separate loan even as between the mortgagor and the mortgagee.
43. In England, since the case of (1861) 9 HLC 514 (A), it has always been held that a first mortgagee, Whose mortgage is taken to cover what is then due and also future advances, cannot claim the benefit of such advances in priority over a second mortgagee, of whose mortgage he had notice at the time of its execution and before he made the new advances. That case was a case where the maximum of the future advances was stated, but the principle has been applied even to cases where no maximum was expressed, as in the case of -- 'The Bradford Banking Co. Ltd. v. Briggs and Co., Ltd.', (1886) 12 AC 29 (I).
In Hopkinson's case (A), the House of Lords had a dissenter in Lord Cranworth who held that in eases such as the one then before the House, the first mortgagee would be secured for any subsequent advances covered by his security even though he had notice of the second mortgage. The case was a peculiar one, inasmuch as both the mortgages were mortgages to secure a present debt as well as future advances and the considerations to which the noble and learned Lords referred in trying to balance the rights of the parties are interesting in the extreme. It was pointed out on the one hand that if the first mortgagee was postponed to the second in respect of advances subsequently made with notice, he could not be said to be unjustly treated, because he was not bound to make further advances under the mortgage held by him and if he came to know of a subsequent mortgage, he might well be expected and required to consider the credit, of his customer before he made any further advances,knowing that the security would be available for them only after the claims of the second mortgagee had been met.
As regards the mortgagor, it was said that even after executing the first mortgage, he remained the equitable owner of all his interests not transferred to the mortgagee and there could be no justification for preventing him from dealing with that interest in the open market, if thereby he could secure a more advantageous bargain for himself. If, when he executed a mortgage in favour of a second mortgagee, the effect would be to make the claims of such mortgagee subordinate to those of the first, the mortgagor would practically have no credit with anyone else and would perforce be tied to the first mortgagee and compelled to obtain further advances from him on the terms of the first mortgage.
It was said on the other hand that if the law was once laid down and understood that a person advancing money on a second mortgage with notice of a prior mortgage, covering future as well as present debts, would be postponed to the first mortgagee to the extent capable of being covered by the prior security, no hardship would be caused, because a second mortgagee, when he made his advance, would be aware of the imperfect nature of the security and if he still made an advance, he would do so at his peril. If the law was not laid down to be so, the flow of money under mortgages to secure advances made and to be made would be impeded and the effect on trade and commerce, in which advances had to be obtained from bankers under running accounts, would be highly prejudicial. To a certain extent, the first mortgagee would be unjustly treated if the law were otherwise, because he would be deprived of the full benefit of an investment for which he had bargained.
44. It would appear that Section 79, Transfer of Property Act, has adopted the dissenting view of Lord Cranworth, but it cannot be said to have done anything more than laying down a rule of priority. Regarded purely from the point of view of priority and so far as Section 93 refers to advances made under a mortgage to secure future advances, the position created by the Act appears to be that the general rule is laid down in Section 48, to which the second part of Section 93 is an exception and Section 79 is an exception to the second part of Section 93. The rules embodied in these sections do not seem to me to apply to a question between the' mortgagor and the mortgagee as regards the unity or diversity of advances made under a mortgage executed to secure moneys advanced and also to be advanced. In my view, such advances cannot be treated as separate transactions as between the mortgagor and the mortgagee and that, taken together, they constitute a single loan.
Dealing with a case where no maximum was fixed, it was observed by Lord Halsbury in the ease of (1886) 12 AC 53 at p. 95 (B), that each fresh advance must have been the subject of a fresh agreement in the sense that the mortgagee must have consented to advance it and on that consent, the previous contract would make such fresh advance a charge upon the interest already mortgaged. It appears to me that in a case where the maximum is fixed, there would perhaps be noquestion of a fresh agreement, but even if therebe a fresh agreement in such a case as well, thefresh advance, upon coming to be charged on theinterest already secured, would be amalgamatedWith the prior advances already charged on thesame interest, because otherwise there could notpossibly be a single mortgage, as laid down in the Indian Act.
45. The other question of law is as to whether money advanced under a mortgage does not become due within the meaning of Article 132, Limitation Act, until and unless a demand is made, Mr. Sanyal contended that a demand was essential before the money could become due and time could begin to run. The difficulties of that view have been sufficiently dealt with by my learned brother. The difficulties arise from the fact that under the exposition of the word 'due', as given by the Judicial Committee in the case of :
'money does not become due within the meaning of Article 132, Limitation Act, until both the mortgagor's right to redeem and the mortgagee's right to enforce a security have accrued.'
In other words, those two rights must co-ariseand coincide. Mr. Gupta contended that thefurther observation of the Judicial Committeethat 'this would of course also be the position ifthe mortgagee exercised the option reserved tohim' in a case where he had a right to enforceimmediate payment of the entire mortgage moneyin default of some stipulated payment, was perhaps not appropriate, but I am unable to see anydifficulty. The entire mortgage money would certainly not become due automatically as soon asthe default occurred, but the mortgagee had theright to make, it due by exercising his option andthe moment he did so, his right to enforce thesecurity and correspondingly the mortgagor's rightto redeem, would both accrue. But no co-accrualof the two rights can ordinarily be conceived, consistently with the liberty of the mortgagor if therequisite of a demand is introduced and surelythere is no warrant for it, either in the relevantArticle or in the general law, though of coursethere may be a special stipulation for a demand.In the absence of any such stipulation, the onlyother theory which will work and which is consistent with the accepted notion of the debtor'sduty to find and pay the creditor as soon as aloan is made, is that the money becomes due atthe date of the mortgage.
It need not be denied that there is some absurdity in that theory, because no one borrows money with one hand in order to pay it back with the other, nor does any one lend money in the expectation of or with a view to getting it back immediately. But the theory does not compel the debtor to repay the money at once and the law, by providing a period of limitation for a suit to recover it, in effect enables the debtor to keep it at least for that period. The theory therefore works.
Mr. Sanyal also relied on the decision of the Judicial Committee in the case of , where no time was fixed for payment andthe Judicial Committee, after referring to that fact, observed that 'on the facts of this case' the money did not become due and the cause of action did not arise until demand for the payment of the mortgage debt was made by the mortgagee and it was refused by the mortgagor. The reason for referring to both the money becoming due and the cause of action arising was that their Lordships were dealing with an argument under both Section 16(1), Limitation Act of 1859 and Article 132, Limitation Act of 1871. Mr. Gupta contended that the case was not relevant and in my view he was right. When their Lordships said that the money did not become due until a demand was made, 'on the facts of this case', I do not think that they were referring to the fact that no specific time had been fixed for the repayment of the debt. The circumstances in that case were somewhat exceptional- There were several mortgages which were admittedly consolidated. Each provided that the mortgagee would have the right to take possession of the mortgaged properties and to collect the rents, an account being taken each year and the balance due for principal and interest being settled. In fact, the mortgagee went into possession although, after some time, he allowed the mortgagor to collect the rent and profits. It seems to me that in those circumstances it could not be said that the money became due at the date of the mortgage, because, first, there were several mortgages executed on different dates consolidated into one and it was difficult to find a date of that mortgage; secondly, it was a mortgage with possession and with a stipulation for the mortgagee applying the rents and profits to the liquidation of his dues and therefore it was obviously not intended that the money would be paid back at once, and, thirdly, the mortgagee having been in possession of the properties, for howsoever short a time, it was necessary for him to notify to the mortgagor to what extent he had paid himself and what was the balance due.
As is well known, it is on the last principle that the English authorities have introduced the doctrine of a demand in cases where a debit balance requires to be ascertained and they have done as on the basis of an implied condition that the result would be worked out and if a debt was found due, a demand for payment would be made. This matter has been dealt with by me in detail In the case of -- 'Montosh Kumar Chatterjee v. Central Calcutta Bank Ltd.', 57 Cal WN 852 (J). The decision of the Judicial Committee in , rests, to my mind, on the special circumstances I have indicated and do not warrant the general proposition contended for by Mr. Sanyal. In my view, time began to run in the present case from the date of each of the loans, since we have found that the loans were separate transactions; and even if there had been a mortgage to secure moneys advanced and to be advanced and therefore a single loan constituted of the several advances, time would begin to run from the date of the last advance, in which case too, the present suit was beyond twelve years from the date when the money became due. I agree with my learned brother that the appellant could recover only such sums as were saved from the bar of time by acknowledgments and that there areacknowledgments only in respect of the two sums of Rs. 55,000/- and Rs. 2500/-.