1. The common ancestor of the parties to this suit was one Kamala-kanta. He left three sons, from whom three branches of the family originated. From Ramanikanta, the barha hishya; from Durgakanta, the madhyam hishya and from Anandakanta, the chotta hishya. The plaintiff Jogineekanta is the son of the eldest son of Durgakanta, whose other three sons are not parties to this suit. Defendants 1 and 2 are Uday-kanta and Hridaykanta, two of the sons, of Ramanikanta, whose other two sons, Jamineekanta and Kumudakanta, are defendants 3 and 4 respectively. Defendant 5 is the grandson of Anandakanta by his son Saradakanta. The plaintiff's case was as follows:-That, in 1313, madhyam hishya separated in mess from the other two branches, which remained joint; that Saradakanta, father of defendant 5, the then head of the chhota hishya, was the karta of the joint family consisting of the said two hishyas, but in and from 1317, defendants 1 and 2, Udayakanta and Hridaykanta, managed its affairs; that, on the 20th Magh 1317 (=3rd February 1911), defendants 1 and 2, as kartas of the said joint family, executed a mortgage in favour of the plaintiff and his father for a sum of Rs. 12,000 on account of certain dues and liabilities of the family to that extent, for which the members of the family stood indebted to them; that since then, certain amounts were paid by the said two defendants from time to time on behalf of the family and a sum of Rupees ten thousand odd remained due and that, in the meantime, a part of the mortgaged properties has been sold away. The plaintiff's father having died, the properties left by him devolved on the plaintiff by inheritance. Treating the amount due as a joint debt of the defendants, the plaintiff instituted this suit praying, in the first instance, for a money decree against all the defendants. In default thereof, be prayed for a mortgage decree against the mortgaged properties with the exception of those that had been sold away.
2. The contesting defendant was defendant 5, who alleged that the two branches of the family were not joint at the time of the loan, nor were defendants 1 and 2 kartas of any such family; that the debt was not incurred by the said defendants as kartas or for purposes of the joint family or for legal necessity; and that his father Saradakanta or his branch was not benefited. He pleaded that the suit was the outcome of collusion between the plaintiff and defendants 1 to 4. It was also pleaded that the claim against defendant 5 was barred by limitation. The Subordinate Judge has made a decree in plaintiff's favour against all the defendants for the amount claimed together with interest at 6 per cent per annum till realization and has ordered that such decree should be a personal decree against defendants 1 and 2, and so far as it is against the other defendants their shares in the joint properties would be liable.
3. Defendant 5 has appealed. As regards the facts found by the Subordinate Judge, we think his findings are correct. He has found that the family was joint at the time when the mortgage was executed, that the madhyam hishya separated from the other two branches in 1313, but the properties of the three branches remained joint till 1334, that the debt was the debt of the joint family consisting of the said two branches, i.e., the barha hishya and the chhota hishya, that it was incurred for family purposes and for legal necessity and was ratified and acquiesced in by all the defendants, that the mortgage was executed by defendants 1 and 2 at a time when they were in charge of the affairs of the said joint family and that the transaction benefited the entire family including defendant 5's father and his branch. The Subordinate Judge has arrived at the aforesaid conclusion upon a most elaborate and extensive discussion of the materials on the record. On an examination of those materials and for reasons which he has given and which we see no necessity to repeat, we think we must uphold those conclusions. The arguments addressed to us on behalf of the appellant have not shaken those conclusions in the least. If the findings stand as in our judgment they must, the question of limitation also does not arise.
4. The question which, in our judgment, requires serious consideration is whether it is competent for the plaintiff to obtain a, decree of the character which has been made in his favour. For this a careful analysis of the mortgage-bond is necessary. 1. Uday and Hriday purported to execute the bond in their individual and personal capacity and not as kartas nor members of a joint family. 2. As regards consideration, (a) Rs. 5,000 was said to be on two heads, Rs. 1,250 being the consideration for the sale of the mortgagee's right in a certain decree and in the property described in Schedule 1; and Rs. 3,750 as nazar for a mirash settlement of their rights in the property described in Schedule 2; and (b) Rs. 8,000 being due as the price of certain decrees and bonds. It was said that out of the aforesaid amount of Rs. 5,000 and Rs. 8,000, i.e., Rs. 13,000, Rs. 1,000 was to go in discharge of a liability of the mortgagees under a decree. The balance, Rs 12,000, was the consideration for the mortgage bond.
5. The bond was executed on 20th Magh 1317 (=3rd February 1911) As regards date of payment it was stipulated:
We shall pay off the entire amount, including interest, within the month of Chaitra 1318.
6. As regards security, it was said:
As security for payment of the principal and interest, we mortgage our absolute right in the 4 annas out of the 16 annas of the property of Schedule 1 below, and our mirash right under you Rebatikanta Bhattachariya (plaintiff's father) in the 1 anna 6 gandas 2 katha 2 kranti share out of 16 annas of the properties of Schedule 2 below, and the absolute right of me Hridaykanta Bhattacharjya in the properties of Schedule 3 below.
7. It was also stipulated thus:
If even by the sale of our interest in the properties of the schedules below the entire amount due to you be not realised, then you will be competent to recover the amount due to you by the attachment and auction sale of our other moveable and immovable properties .... and by the arrest of our person.
8. Now, it cannot be disputed that the general principle of Hindu law, in so far as it is based upon the principle of agency and is quite apart from any religious or moral duties, is that all members of a joint family, and therefore all their properties, divided or undivided, are liable for debts which may have been contracted on behalf of the family by one who was authorised to contract them: see Manu, 8, Section 166 and Raghu nandan 5, Sections 33 to 36, referred to in Mayne's Hindu Law, para. 333). It is true that the present family is not a joint Hindu family strictly so called, nor were the defendants 1 and 2 strictly speaking kartas thereof, nor again are the other defendants, who are sought to be made liable for the debt, persons in the position of sons in a Mitakshara family with reference to a debt contracted by a father in such a family. But, upon the findings of the Subordinate Judge, which we have affirmed, the said two defendants were managing members of a Dayabhaga family, in whose favour an implied consent may be presumed from the very fact that they were entrusted with the management of the family estate by the other members of the family: Miller v. Runga Nath (1885) 12 Cal 389. And the proposition is well settled that, when the debt is contracted by the managing member of a joint family for a joint family purpose, the joint family and not the managing member becomes liable for it: Dwarka Nath v. Bungshi Chandra (1905) 9 CWN 879. The findings in this case go much further and are to the effect that all the members have been benefited by the transaction. There can therefore be no question that upon all general principles, and under the Hindu law in particular, all of them are liable for the debt. The real question is what is the remedy of the creditor, the plaintiff
9. The case has got some facts of its own. But before referring to them, I propose to deal with a general question, which is of some importance, namely, whether, when a mortgage of this character has been executed by two of the members, it is open to the creditor to ask for a money decree against all, as the plaintiff has asked for as the primary relief in the case. It has been argued that, on principle, there is no distinction between this case and that of a karta of a joint undivided Hindu family, who borrows money on a promissory note for the purposes of the family or for meeting family necessities, in which latter case it has seldom been doubted that the creditor can recover the money from all the members of the joint family, although they were not all parties to the notes [see e.g., Baisnab Chandra De v. Ramdhan Dhor (1906) 11 CWN 139, Hari Mohun Ghose v. Sourendra Nath Mitter : AIR1925Cal1153 , Krishna Ayyar v. Krishnasami Ayyar (1900) 23 Mad 597]. And it is said that between a creditor on a simple bond and a creditor on a mortgage-bond there is no appreciable difference, and yet in the case of the former it is almost an ordinary incident for him to get relief against all the members of the family of the debtor. In the case of a simple bond or of a promissory note, the suit, if based upon the debt, can end in a decree against persons not parties to the bond or the promissory note, if their liability for the debt can be established. The distinction between a suit on the promissory note and a suit upon the debt has been clearly pointed out in Vithalrao Seshgirao v. Vithalrao Sondekar AIR 1923 Bom 244. The question therefore plainly is whether a mortgagee is entitled to sue upon the debt ignoring the mortgage.
10. We have not been referred to any authority one way or the other directly bearing upon the question. But, giving it all the consideration it deserves, we have come to the conclusion that the question must be answered in the negative. It is true that a creditor, who takes a security in the shape of a mortgage, cannot be regarded as having foregone such rights as a creditor has under the general law. But it seems sufficiently clear, from the provisions of the Transfer of Property Act, that these general rights are to some extent abrogated by that Act. For instance, his right to ask for a money decree is very much restricted by the provisions of Section 68 of the Act, and it is perfectly clear therefrom that an action for debt is not the usual remedy of a mortgagee in India:
A simple mortgage (such as the one we have before us) consists of two parts: a covenant on the part of the mortgagor to pay the debt, and an agreement empowering the mortgagee to realise his money out of the property pledged to him. The pledgee must ordinarily obtain a decree directing a sale in order to make his security available. In the case of a simple mortgage therefore the mortgagee has, generally speaking, on the default of the debtor a twofold cause of action: one arising out of the breach of the covenant to repay and the other arising out of the hypothecation; and he can sue the mortgagor on both the causes of action in one suit: Sir Rashbehary Ghose on Mortgage, Edn, 4, Vol. 1, pp. 76 to 77.
11. But the mortgagee is not bound to sue for both the remedies simultaneously; as notwithstanding Order 2, Rule 2, Civil P. C, he may bring his action on the covenant first and then sue for the sale of the mortgaged property (Order 34, Rule 14, Civil P. C.) C1ause (a), 8. 68 gives him the right ex con-contractu; Clause (b) gives him the right which the Courts have long recognised on equitable grounds, because his security is lost or rendered insufficient, due to nobody's fault in which case the loss must fall on the owner, and Clauses (c) and (d) make the owner liable ex delicto. In the case of a simple mortgage it is not necessary that the mortgagor should promise to pay, and all that is required is that he must bind himself to pay, but it is not necessary that he should expressly do so. As observed by their Lordships of the Judicial Committee:
A loan prima facie involves a personal liability; such liability is not displaced by the mere fact that security is given for the repayment of the loan with interest, but the nature and terms of the security may negative any personal liability on the part of the borrower: Ram Narayan Singh v. Adhindra Nath AIR 1916 PC 119.
12. And as held in the case of Benoy Krishna Deb v. Debendra Kishore Nandy (1911) 9 IC 660, a stipulation such as we have in this mortgage, that if the debt be not paid off by the sale of the hypothecated properties the mortgagee would be able to sell other properties of the mortgagor does not imply that the personal remedy is to be postponed to that against the mortgaged properties. But a mortgagee in respect of a simple mortgage, in view of the provisions of Section 68, T. P. Act, has, in our opinion, no cause of action for a relief in the shape of a decree for money independently of the mortgage and apart from his rights as mortgagee. Where none of the Clauses, (b) (c) or (d) of that section are satisfied he can only sue on his rights ex contractual upon the covenant under Clause (a) and it is not open to him to ignore the mortgage and fall back on the debt.
13. So far as the present case is concerned there is a further difficulty in the plaintiff's way. No cash money was advanced and the consideration money of Rs. 12,000 was made up of the items already stated. If the debt was to be sued upon, it was the different items in respect of which the liability was to be pleaded and proved, and the mortgage could only be pleaded as evidence of admission or acknowledgment of the said liability. The plaint has not been framed in that way. On the plaint, as framed, the suit could not possibly be treated as a suit for recovery of the said items. The plaintiff could undoubtedly sue upon the personal covenant in the mortgage-bond. His case as to the security being impaired or lost has not been made out; but the covenant nevertheless is there. On that basis, he could get a money decree against defendants 1 and 2 only. That however is not the relief that he wants. On the facts found however there is nothing to prevent him from obtaining such reliefs as the law entitled him to as a mortgagee. The decree passed by the Court below will be set aside and the usual preliminary decree for sale in respect of the mortgaged properties will now be passed against defendants 1 and 2.
14. If eventually the proceeds of the sale are not sufficient for realization of the decretal amount, the plaintiff will have to apply for a decree for the balance and such a decree will also be available to him. The proper time for plaintiff to rely upon the findings of fact arrived at up to the present stage, to which reference has already been made, will be when the question of a personal decree under Order 34. Rule 6 will have to be considered. The question will then arise whether, upon the footing of the unrealized balance being a partnership-debt, the plaintiff will not get a money decree for the same not only against defendants 1 and 2, but also against the other defendants upon the principles underlying the decisions in Kishun Pershad Chowdhry v. Tipan Pershad Singh (1907) 34 Cal 735 and Kandasami Goundan v. Kuppu Moopan AIR 1920 Mad 479, and whether, upon the footing of the balance being a partnership-debt, a decree would not be available to the plaintiff against all the defendants, the joint property being primarily liable and the separate property only in case it proved insufficient. This, however, is a matter on which we do not feel called upon to express any opinion at this stage.
15. The appeal is allowed, the decree of the Court below is set aside and a decree as indicated above is ordered to be passed with costs in the Court below against defendants 1 and 2 and with no order for costs in respect of the other defendants. As regards the appeal, the appellant will get his costs from the plaintiff-respondent. Defendants 1 and 2 will have six months, from 3rd May 1933, to make the payment of the decretal amount.