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Manickya Moyee Vs. Boroda Prosad Mookerjee and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtKolkata
Decided On
Judge
Reported in(1883)ILR9Cal355
AppellantManickya Moyee
RespondentBoroda Prosad Mookerjee and anr.
Excerpt:
principal and surety - agreement to mortgage, assignment of--bond of indemnity--guarantee--interest--appeal--respondent--adding parties--civil procedure code, act (xiv of 1882), section 559--limitation act (act xv of 1877). - .....by or recovered from the mortgagor. this instrument recites the mortgage agreement executed by kali dass roy in favour of boroda prosad mookerjee, and the transfer of boroda prosad mookerjee's interest thereby created to the plaintiff manickya moyee chowdhrain. then comes the condition of the obligation, and after this we have the following passage which is material to the questions which we have to decide in the present case:provided always, and it is hereby agreed and declared by and between the said boroda prosad mookerjee and srimoti manickya moyee chowdhrain that, if the said kali dass roy, or his heirs, executors, administrators, representatives or assigns does not or do not pay to the said srimoti manickya moyee chowdhrain, or her heirs, executors, administrators,.....
Judgment:

Field, J.

1. In this case one Kali Dass Roy mortgaged certain property to Boroda Prosad Mookerjee by an instrument, dated the 17th June 1878. This instrument was not a formal deed of mortgage; it was an agreement for mortgage only, but it was the intention of the parties that a formal mortgage deed should be subsequently executed. The agreement of the 17th June 1878 contained a provision that, until the formal mortgage deed should be executed containing all such covenants, provisions, stipulations, and agreements as are usually or properly introduced into mortgages of estates of a similar nature, the mortgage-property should remain charged with the amount of the loan, and the mortgage agreement (which was correctly stamped under Act XVIII of 1869) should be considered as a deed of mortgage. Under the agreement the money lent on mortgage, together with interest at 18 per cent., was to be paid within one year from the 17th June 1878, and the agreement further provided that this interest was to be payable in four quarterly instalments, and that if any instalment was not paid on the due date, compound interest was to be allowed thereupon. The money lent or the interest was not paid within the year, and Boroda Prosad Mookerjee, on the 28th June 1879, transferred his interest in the mortgage to Manickya Moyee Chowdhrain, the plaintiff in the present suit. It is not necessary to refer further to the contents of the deed of transfer for the purposes of the present case.

2. Boroda Prosad Mookerjee, further, on the same date, executed an instrument of guarantee. This is in the common form of a bond, by which Boroda Prosad Mookerjee is held bound in the sum of Rs. 50,000 to be paid to Srimoti Manickya Moyee Chowdhrain; such bond to be void if the amount due upon the mortgage, together with the stipulated interest, be paid by or recovered from the mortgagor. This instrument recites the mortgage agreement executed by Kali Dass Roy in favour of Boroda Prosad Mookerjee, and the transfer of Boroda Prosad Mookerjee's interest thereby created to the plaintiff Manickya Moyee Chowdhrain. Then comes the condition of the obligation, and after this we have the following passage which is material to the questions which we have to decide in the present case:

Provided always, and it is hereby agreed and declared by and between the said Boroda Prosad Mookerjee and Srimoti Manickya Moyee Chowdhrain that, if the said Kali Dass Roy, or his heirs, executors, administrators, representatives or assigns does not or do not pay to the said Srimoti Manickya Moyee Chowdhrain, or her heirs, executors, administrators, representatives, or assigns amicably and without the institution of any suit, the whole of the said principal sum of Rs. 32,000, and the simple and compound interest thereon according to the terms of the said indenture of mortgage at the rate of eighteen per cent., per annum from the said 17th day of June 1878 to the date of payment within one year from the date Thereof the said Srimoti Manickya Moyee Chowdhrain or her heirs, executors, administrators, representatives, and assigns shall bring a suit or suits in the proper tribunal to enforce payment of the monies secured by the said indenture of agreement for mortgage; but if she or they fail to do so, then the said Boroda Prosad Mookerjee, or his heirs, executors, administrators, and representatives shall not be liable to the said Srimoti Manickya Moyee Chowdhrain or her heirs, executors, administrators, representatives or assigns for payment of any interest that may grow or become due on the said indenture of agreement for mortgage from the date on which under this proviso the said suit or suits ought to be brought, and the date on which the said suit or suits shall be actually brought; and that if under any decree that may be passed against the said Kali Dass Roy, or his heirs, executors, administrators, representatives or assigns in favour of the said Srimoti Manickya Moyee Chowdhrain, or her heirs, executors, administrators, representatives, or assigns on the said indenture of agreement for mortgage, simple and compound interest be not allowed at the rate of eighteen per cent. per annum, from the said 17th day of June 1878 to the date of payment, the said Boroda Prosad Mookerjee, or his heirs, executors, administrators, and representatives, shall nevertheless be liable to pay to the said Srimoti Manickya Moyee Chowdhrain, or her heirs, executors, administrators, representatives and assigns the difference between the amount which will be allowed by such decree for interest and the full amount of simple and compound interest according to the terms of the said indenture of agreement for mortgage, from the said 17th day of June 1878 to the date of payment, minus the interest for the period between the date on which under this proviso the said suit or suits ought to be brought, and the date on which the. said suit or suits shall be actually brought. And lastly it is hereby expressly understood that upon this bond or obligation the said Srimoti Manickya Moyee Chowdhrain, her heirs, executors, administrators, representatives, and assigns shall be competent to recover from the said Boroda Prosad Mookerjee, his heirs, executors, administrators, and representatives, only the amount of the difference between what shall be recovered by the said Srimati Manickya Moyee Chowdhrain, or her heirs, executors, administrators, representatives, and assigns on the strength of the said indenture of agreement for mortgage and transfer of mortgage from the said Kali Das Roy, or his heirs, executors, administrators, representatives or assigns, and the said sum of Rs. 32,000, and simple and compound interest thereon according to the terms of the said indenture of agreement for mortgage at the rate of eighteen per cent., per annum from the said 17th day of June, 1878 to the date of payment, subject to the agreement in the hereinbefore proviso contained.

3. It is contended before us that the word 'thereof' in the commencement of this passage is a mistake for 'hereof.' This contention supposes that the word 'hereof' suggested for substitution, is together with the six preceding words to be read with the verb 'pay,' thus 'do not pay within one year from the date hereof;' but it appears to us that it is not necessary to substitute 'hereof' for 'thereof,' because a sufficient sense is to be obtained from the passage as it stands if the word 'thereof' be taken and construed with 'interest thereon according to, etc.,' in other words, be read as defining or describing the interest.

4. Having regard to the words 'any interest that may grow or become due on the said agreement for mortgage from the date on which, etc.,' and what immediately follows these words, we think that interest after and besides the interest for the year specified in the mortgage agreement was within the intention of the parties to the guarantee bond.

5. Then comes the essential passage, 'if under any decree that may be passed against the said Kali Dass Roy simple and compound interest be not allowed at the rate of eighteen per cent., per annum from the said 17th day of June 1878 to the date of payment, the said Boroda Prosad Mookerjee shall nevertheless be liable to pay to the said Srimoti Manickya Moyee Chowdhrain the difference between the amount which will be allowed by such decree for interest and the full amount of simple and compound interest according to the terms of the said indenture of agreement for mortgage from the said 17th day of June 1878 to the date of payment minus the interest, etc.' It is contended before us that the words 'date of payment,' are to be construed to mean, not the due date of payment inserted in the mortgage agreement, namely, within one year from the 17th of June 1878, but the date on which the money may be or shall be realised, and it is further contended that inasmuch as it was stipulated between the original parties that the agreement for mortgage was to have the same effect as a formal mortgage deed containing the usual covenants, the original mortgagee is entitled to interest at eighteen per cent., and also compound interest calculated in the manner specified in the mortgage agreement; entitled, that is, in respect of the time (after the year allowed for payment by the mortgage agreement) during which the debt was not paid, because, if a formal mortgage deed had been executed, covenants securing the payment of such interest and such compound interest would have been inserted therein.

6. Now, so far as regards compound interest, we are not able to agree with this contention; but it does appear to us that if a formal mortgage deed had been executed between the original parties, it would have been a usual and ordinary covenant to insert in such a deed that interest shall be paid on the principal sum, for any time during which such sum remained unpaid after the expiry of the year fixed for payment, at the rate of eighteen per cent., specified in the agreement; and it therefore appears to us that the original mortgagee was prim facie entitled to recover interest at this rate until such principal sum were realized from the mortgagor.

7. We think that what was guaranteed by the guarantee bond was that interest would be recoverable upon the true construction or interpretation of the mortgage agreement.

8. But it is contended that inasmuch as the Subordinate Judge has decided that interest after the year is not recoverable at the rate of eighteen per cent., from the mortgagor Kali Dass Roy, the plaintiff is bound by that decision, and is precluded from recovering such interest from her assignor. It has also been pressed upon us that Kali Dass Roy ought to have been made a party to this appeal, and that the present defendant is entitled to say that unless and until Kali Dass Roy is a party to this appeal, it is unjust and inequitable to make him (the present defendant) liable for the further amount of interest, from liability for which Kali Dass Roy has been discharged by the decree of the Court below, because that decree was made in a suit to which the original parties to the mortgage, as well as the assignee of the mortgagee, have all been parties.

9. Two questions thus arise: (1) If upon the true construction of the mortgage agreement we think the mortgagor liable to pay interest at eighteen per cent. after the year allowed for payment, can the assignee of the mortgagee recover this interest from his assignor upon the guarantee, when such assignee has failed to recover such interest from the mortgagor? (2) Can the assignee recover such interest in this appeal, notwithstanding that he has not made the mortgagor a party to his appeal

10. We think that, as to the first question, if the assignee had sued the mortgagor in a separate suit to which the mortgagee (assignor) was not a party, and had failed to recover the after interest, the guarantee bond would entitle the assignee to recover such interest from the assignor in a second suit subsequently brought on the guarantee against the assignor alone; but it is not so clear to us that he is equally entitled to recover in a suit to which all three are parties. The second question we do not propose to decide, as we think that the proper course will be to let the hearing of this case stand over, and to direct that Kali Dass Roy be made a party to the appeal. So far as regards Kali Dass, the time for appealing as against him has expired; but we think that this is a case in which we may reasonably exercise the discretion vested in us by Section 51 of the Limitation Act; and it may be quite possible that, apart from that section, we have power to direct that Kali Dass Roy be made a party to the appeal, inasmuch as the mortgagee, respondent, has in a way a right to relief over against him, and it is proper that all questions in dispute should be settled so as to prevent as far as possible further litigation.

11. It has been stated to us by the learned Counsel for the appellant that Kali Dass Roy was not made a party to this appeal because Boroda Prosad Mookerjee made common cause with him in resisting the plaintiff's claim; and the plaintiff cannot in consequence be supposed to show him much consideration, while at the same time she believes that upon the true construction of the contract of guarantee she is entitled to recover the after interest at eighteen per cent., in any event from him.

12. This is a question upon which we pronounce no opinion at the present stage of the proceedings. If this really were so, it may be a matter for consideration when we come to deal with the question of costs. All we say at present is that having regard to the fact that Kali Dass Roy, together with the mortgagee and the assignee of the mortgagee, were parties to the present proceedings in the Court below, we think that the case should be so finally disposed of as to do complete justice between all parties.

13. The appellant will take steps within a fortnight from this date to serve notice upon Kali Dass Roy, and the usual time for his appearance will be allowed.

14. Kali Dass Roy having been made a party respondent to the appeal appeared by Baboo Rash Behary Ghose, who addressed, the Court on his behalf.

Field, J.

15. Kali Dass has now been made a party to the appeal, and we have heard Baboo Rash Behary on his behalf. The learned pleader has contended that Kali Dass has been improperly made a party to this appeal. His argument is based upon the rule of limitation applicable to the institution of appeals, and he contends that as the period for filing an appeal against his client has expired, it is not now competent to the Court to make him a respondent to the appeal. We think that Section 559 of the Code of Civil Procedure gives us full power to make him a respondent, and that the discretion conferred by that section is not limited by any provisions to be found in the Limitation Act. We may observe in the first place that Section 32 of the Code, which provides for adding parties in the Court of First Instance, contains an express reference to Section 222 of the Limitation Act. No such express reference is contained in Section 559, and the language of Section 22 of the Limitation Act deals with plaintiff and defendant. There is no general clause, which provides that plaintiff shall include appellant, and defendant, respondent. Then again what is done under Section 559 is done not upon the application of the parties but by the Court suo motu. If a rule of limitation were applicable to Section 559, it would be in the power of the appellant to exclude the discretion of the Court by filing his appeal on the last day allowed by the Limitation Act for that purpose. We think, therefore, having regard to this consideration, that it was not the object of the Legislature to limit the operation of Section 559 by any rule of limitation, and we think that we had full power to direct that Kali Dass be made a respondent in this appeal. We entertain no doubt that Kali Dass is liable for interest at 18 per cent. Until the date of realization, and we shall direct a decree to be made to the following effect: Interest at 18 per cent. will be allowed up to the date of the decree of this Court. That interest will be realized in the first instance from Kali Dass; and the original mortgagee, that is the assignor of the plaintiff, will be liable upon the guarantee bond only if the interest cannot be realized by the usual execution proceedings from Kali Dass. Having regard to all the circumstances of the case and the omission of Kali Dass as respondent, when the appeal was originally filed, we shall give no costs upon the additional interest now decreed. The total sum allowed by the decree will carry interest at 6 per cent. from the date of the decree of this Court to the date of realization.

1[See. 5: If the period of limitation prescribed for any suit, appeal or application expires on a day when the Court is closed, the suit, appeal or application may be instituted, presented or made on the day that the Court re-opens:

Any appeal or application for a review of judgment may be admitted after the period of limitation prescribed therefor, when the appellant or applicant satisfies the Court that he had sufficient cause for not presenting the appeal or making the application within such period.]

Proviso where Court is closed when period expires.

Proviso as to appeals and applications for review.

2[Section 22: When, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party.

Provided that, when a plaintiff dies, and the suit is continued by his legal representative, it shall, as regards him, be deemed to have been instituted when it was instituted by the deceased plaintiff:

Provided also, that, when a defendant dies, and the suit is continued against his legal representative, it shall, as regards him be deemed to have been instituted when it was instituted against the deceased defendant.]

Effect of substituting or adding new plaintiff or defendant.

Proviso where original plaintiff dies.

Proviso where original defendant dies.


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