1. This is a suit to recover the sum of Rs. 25,000 as principal, and, Rs. 7,8.53, the balance of interest due on a hatchitta with further interest in default. The principal sum was advanced on the 14th November 1920. The defendants on the same day sighed a hatchitta. The hatchitta is admitted and also payments of interest subsequently made.
2. It appears that on the 3rd May 1921 the defendants by way of security executed a mortgage in favour of the plaintiff and other creditors charging certain property for the purpose of securing their pre-existing debts.
3. The only point taken on behalf of the defendant is that the debt on the hatchitta is merged in the mortgage and that the plaintiffs are not entitled to recover on the hatchittas exclusively.
4. No oral evidence has been adduced on either side, and I have been referred to the terms of the mortgage itself. It is argued under Section 62 of the Indian Contrast Act that the parties agreed to substitute one contract for the other. But this is a question of fact and intention, viz., whether the mortgage was intended to be collateral or in substitution.
5. I have been referred on behalf of the plaintiffs to Ethel Georgina Kerr v. Clara B. Ruxton 4 C.L.J. 510, where it was held that where there is an existing debt, and the payment of it is secured by a deed intended to operate as a mortgage, the pre-existing personal liability of the debtor is not superseded. Upon the deed itself, it does not in my opinion, appear that it was the intention of the parties to substitute it for pre-existing debt, and in consequence the liability of the debtor was not there by superseded.
6. The mortgage, in my opinion, was merely intended as a collateral security. As regards this, the plaintiff asked for leave under Order II, Rule 2, of the C.P.C. to reserve his rights under the mortgage. Such leave has been granted, if necessary, grant it now and there will be a decree for the amount claimed with costs oil scale No. 2, interest on judgment at 6 percent.