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Kunjmohan Shaha Poddar Vs. Karunakanta Sen Chaudhuri - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1934Cal40
AppellantKunjmohan Shaha Poddar
RespondentKarunakanta Sen Chaudhuri
Cases ReferredBihar and Orissa v. Kameshwar Singh
Excerpt:
- .....(1) that he was a minor at the date of the execution of the bond and is not bound by the mortgage-bond in suit; (2) that the plaintiff has on receipt of a total sum of rs. 9,000, after remitting some amount from the amount due on the mortgage-bond in suit and other bonds, according to an amicable adjustment, admitted that his dues in respect of bonds in suit were all satisfied; and that, out of the said amount fixed on amicable settlement, defendant 2 paid a total sum of rs. 6,258 within the period commencing from the month of kartik up to 10th magh 1326 b.s., by settling some lands owned and possession by defendant 3 and by selling some properties to one anandamayee gupta; in other words, the defendant contended that the mortgage bond had been satisfied by adjustment under the amicable.....
Judgment:

Mitter, J.

1. The suit in which this appeal arises was brought by the plaintiff to enforce a mortgage security executed by Sreematee Bangabasinee Chaudhuranee, Mahananda Sen and Karunakanta Sen (defendants 1, 2 and 3) on 25th Jais-tha 1319, corresponding to 17th June 1912. This suit was tried along with another suit brought by the same plaintiff to enforce a mortgage-bond said to have been executed on 14th Sraban 1321 B.S., corresponding to 30th July 1914, by the first two defendants in the present suit, namely Bangabasinee and Mahananda. The suit in which this appeal arises was numbered as Suit No. 101 of 1922 of the Court of the Subordinate Judge of Dacca. The suit in the later mortgage was numbered as Suit No. 100 of 1922. The present suit was decreed, ex parte against defendant 3 and on contest against defendants 1 and 2 on 29th January 1924. It may be mentioned here that defendant 1 is the mother and defendant 2 is the brother of defendant 3. Defendant 3 applied to set aside the ex parte decree and the decree was set aside so far as he was concerned. The suit proceeded to trial against defendant 3.

2. The defences of defendant 3 were, amongst others, (1) that he was a minor at the date of the execution of the bond and is not bound by the mortgage-bond in suit; (2) that the plaintiff has on receipt of a total sum of Rs. 9,000, after remitting some amount from the amount due on the mortgage-bond in suit and other bonds, according to an amicable adjustment, admitted that his dues in respect of bonds in suit were all satisfied; and that, out of the said amount fixed on amicable settlement, defendant 2 paid a total sum of Rs. 6,258 within the period commencing from the month of Kartik up to 10th Magh 1326 B.S., by settling some lands owned and possession by defendant 3 and by selling some properties to one Anandamayee Gupta; in other words, the defendant contended that the mortgage bond had been satisfied by adjustment under the amicable arrangement. On the question of minority, the Subordinate Judge of Dacca has held against the defendant; on the question of the adjustment, the Subordinate Judge has found that the defendant has paid the sum of Rs. 5,218 to the plaintiff and the plaintiff was bound to appropriate the sum of Rs. 3,468 out of that sum towards the mortgage-bond in suit and if he had done so the mortgage-bond in suit (Ex. 1) must be held to be satisfied. He has come to the conclusion that plaintiff was not justified in appropriating the sum of Rs. 3,468 towards other debts owed only by defendants 1 and 2 and not by defendant 3, and in this view the Subordinate Judge is of opinion that defendant 3 is not liable.

3. The Subordinate Judge below has also rested his decision on a case not raised by the pleadings and on which no issue was joined and has found that the sum due under the mortgage-bond in suit was included in the sum of Rs. 3,000 for which the later mortgage-bond (Ex. 1-A) was taken. On these findings, he has dismissed plaintiff's suit as against defendant 3. Defendants 4 to 7 have been impleaded, as they are said to be purchasers of portions of the equity of redemption. The result is that the plaintiff's suit has been dismissed as against defendant 3 and it has been directed that the preliminary decree passed on 29th January 1924, against the remaining defendants be made absolute. The present appeal has accordingly been brought by the plaintiff against the decree dismissing his claim as against defendant 3.

4. The appellant has challenged the decree of the Court below on two grounds: In the first place, he contends that in reaching the conclusion that the mortgage-bond in suit has been extinguished by the mortgage of 30th July 1914 (Ex. 1-A), the Subordinate Judge has made a new case for the defendant. It is pointed out that in para. 9 of the written statement, it was admitted that different sums were received for the mortgage-bond in suit and for the other bonds. Indeed it is said that there is no suggestion anywhere in the written statement that the consideration of the second mortgage was in part the sum borrowed on the mortgage-bond in suit. Accordingly, no issue was joined on the point. The Subordinate Judge has really rested his decision on this part of the case on a statement of plaintiff's witness Rajmohan Dutta made in the course of his cross-examination by defendant 3's pleader, that the sum due under the mortgage-bond in suit was also included in the sum of Rs. 3,000 for which bond (Ex. 1-A) was taken. The suggestion of the plaintiff is that this statement must have been made through inadvertence and it seems to us likely to be so, seeing that it was nobody's case that the amount due on the mortgage-bond in suit formed the consideration for the later mortgage (Ex. 1-A). It is also to be noticed that defendant 3 is no party to the second mortgage-bond; on the other hand the defendant, in his examination in-chief, said that

except the debt due under the mortgage-bond, Ex. 1, he was not liable to the plaintiff for any other debt either before or after the said mortgage-bond, Ex. 1. I never took the liability for any debt on behalf of my mother and elder brother Mahananda Sen.

5. It seems to us therefore that the Court below has made a new case for the parties not warranted by the pleadings and evidence and, in these circumstances, we are unable to accede to the contention of the learned advocate for the respondents that the case should be remanded for further elucidation of this aspect of the case. If there was any truth in this new case, namely, that the first mortgage-bond was merged in the second, one would have expected a recital of this circumstance in the second bond. It is said that defendant 3 was not a party to the second mortgage and is not responsible for any statement in the later bond (Ex. 1-A). That may be so, but his mother and brother were parties to the same and it is not likely that they should omit mention of such an important fact which would relieve them from liability under the first mortgage, i.e., the one in suit. The second contention of the appellant is that the Subordinate Judge was clearly in error in holding that the sum of Rs. 3,468 must have been meant to be appropriated towards the debt covered by the mortgage in suit, as the sum was realised from premiums obtained from tenants to whom the mortgage properties were leased out with the consent of the mortgagee and from the sale-proceeds of one of the properties mortgaged to Anandamayee, properties which were the joint properties of all defendants 1, 2 and 3. It is argued that it is common ground that this payment was not made by defendant 3 and it was open to the creditor to appropriate, at his election, the sum towards any debt due to the plaintiffs from defendants 1 and 2. Defendant 3 did not personally make the payments.

6. On the other hand, it appears from the deed of sale by defendants 1, 2 and 3 in favour of Anandamayee for Rs. 1,850 that the money was needed to pay off the second mortgage of 14th Sraban 1321: see Ex. 2, p. 170, part 2. The fact that the plaintiff mortgagee was aware that the sum of Rs. 5,218, made up of Rupees 3,468 and Rs. 1,850, was raised out of the joint properties of defendants 1, 2 and 3 is not a circumstance implying that the payment is to be applied to the discharge of the debt which defendants 1, 2 and 3 owed to the plaintiff within the meaning of Section 59, Contract Act. Another reason given by the Subordinate Judge for holding that the sum of Rs. 3,468 should have been appropriated towards the debt due under the mortgage-bond in suit is that the sum of Rs. 3,468 was actually received by the plaintiff on 25th and 29th Kartik 1326, B. S., and was entered as amanat jama by the plaintiff in his account book and that on 30th Agrahayan 1326. the amount was credited on different heads, and the plaintiff was not justified under the law to keep the matter in abeyance so long but he ought to have appropriated the sum then and there to proper heads Under Sections 60 and 61, Contract Act, and in support of this view the Subordinate Judge has referred to a case of the Allahabad High Court, Kundan Lal v. Jagannath AIR 1915 All 378. It is contended for the appellant that this view is wrong. It seems to us that this contention must prevail. It is now well established that if the debtor does not make any appropriation at the time when he makes the payment, the right of ap-propriation devolves on the creditor and he may exercise that right until the very last moment and need 'not declare his intention in express terms: see the observations of Lord Maenaghten in Cory Brothers and Co. v. Owners of Turkish Steamship 'Mecca' (1897) AC 286.

7. This is no doubt the rule of English law and it was assumed to be the law under the Contract Act by the High Courts of Bombay, Madras and Patna: S. Amerchand and Co. v. Ramdas Vithaldas AIR 1914 Bom 290, Munisami Mudali v. Perumal Mudaly AIR 1919 Mad 534 and Bishun Perkash Narain Singh v. Md. Siddique AIR 1916 Pat 326. The High Court of Lahore has taken the same view in a recent case: see Relu Mal v. Ahmad AIR 1926 Lah 183. The Allahabad High Court has however held that an appropriation of payment by the creditor must be made at the time of receiving the money and that he cannot exercise the right of appropriation at the last moment: Kundan Lal v. Jagannath AIR 1915 All 378. But as has been pointed out by Sir Frederick Pollock and the Rt. Hon'ble Sir Dinshaw Mulla, in their commentary on the Contract Act, the view taken by the Allahabad High Court is an arbitrary speculation and is erroneous. It seems to us there is nothing in Section 61, Contract Act which is contrary to the English law on the subject; on the other hand Section 61 is in conformity with the English law, and where the creditor does not make any appropriation Section 61 provides the rule for the guidance of the Courts. We are of opinion that it was open to the plaintiff to appropriate the sum of Rs. 3,468 towards the payment of the debt due to him from defendants 1 and 2. The Allahabad view can no longer be maintained in view of the recent decision of the Judicial Committee in the case of Commissioner of Income-tax, Bihar and Orissa v. Kameshwar Singh . In our opinion, the Subordinate Judge is wrong on both the points. This appeal must be allowed. The judgment and decree of the Subordinate Judge are set aside and plaintiff's suit is decreed against defendant 3 also. If the amount claimed with interest is not paid within three months from this date, the mortgaged properties will be sold. The entire decretal amount will carry interest at 6 per cent per annum from this date till realization. The appellants are entitled to costs in both the Courts and this is to be added to the mortgage money.

Henderson, J.

8. I agree. Neither of the defences, on which the learned Subordinate Judge dismissed the suit, had been taken by the defendant himself.


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