Baji Rao vs Ganaji and Others

Siddiqi, J.—This is a suit by a mortgagee against the mortgagor for enforcement of the terms of the mortgage and he prays for a decree for foreclosure. The trial court on issues 1 and 2 as to the mortgage and rights and consideration found for the Plaintiff and as regards the issue No. 4 relating to the compliance with the terms of the Money Lender''s Act partially decided in favour of the Defendant that the accounts have not been supplied to the Defendant from time to time as determined by the provisions of that Act. The Court in this respect remarked that this matter would only effect the right of the Plaintiff to recover interest and costs. But under issue No. 3, that he referred to the bar of limitation and dismissed the suit as barred by period of limitation on account of Article 118 of the local Limitation Act. The appellate Court upheld this view and dismissed the first appeal. The Plaintiff, therefore, is before me in his second appeal. The preliminary objection by the Respondent''s advocate that second appeal does not lie fails because for reasons that would be sufficiently evident from the latter portion of this judgment.

The first point that comes up for consideration is whether Article 118 will be applicable or Article 133 of the local Limitation Act will apply. The first mentioned Article refers to a case of money secured on immovable property and lays down a period of 12 years from the date when the right to get that money accrues to the Plaintiff. But Article 133 of this Act is an express provision for cases of foreclosure and mortgage and has a long period of 30 years from the date of mortgage money being payable. The lower court has applied Article 118 on this ground that here the mortgage is a simple one without possession and therefore Plaintiff cannot come in for a foreclosure suit. This view would be perfectly correct if I come to the conclusion that in a mortgage of this kind Plaintiff has no right of foreclosure on account of the inherent nature of the contract and not on account of some collateral or side issue. But this deed of mortgage though without possession contains a clause to the effect that the Plaintiff will be entitled to foreclosure if the amount of mortgage is not paid.

It is one thing to say that a simple mortgage does not in itself carry the right of foreclosure, but it is altogether a different matter if it is contended that in spite of such contract between the parties such express term would be void and unenforceable at law for some legal prohibition, public policy, so on. This condition being there the Defendant will have to convince me that that term is void or voidable. I have always been of opinion and have taken that line in number of reported cases that the law of contract as it stands gives complete liberty to contract to the parties and such an authority between competent parties is only restricted by specific prohibitions and such prohibition will have to be express or by necessary implication.

In 36 Deccan LR 858. I have pointed out that Law of contract gives considerable amount of freedom of contract to the parties to the contract and the Transfer of Property Act has not completely superseded the provisions of the Contract Act in dealing with the immovable property in matters not covered by Transfer of Property Act. The Contract Act being a general law covering all contractual transactions, the Transfer of Property Act is a specific law relating to the transactions of property and for that reason the provisions of Transfer of Property Act will certainly supersede the previsions of the Contract Act so far as they relate to property, but where the provisions of the Transfer of Property Act are silent and do not cover a particular case or cases and when there is no restriction on the liberty of the contracting parties there can be a valid contract under the Contract Act & that contract cannot be avoided merely on the ground that the Transfer of Property Act does not directly provide for it, and I have refused to accept and read such a principle into the Transfer of Property Act.

Here I am not concerned with this question whether this mortgage is a simple mortgage or not but I have stated in that case reported that a simple mortgage would be one in which there is no contract as to the right of foreclosure and I have also held that Section 67, Transfer of Property Act, does not take away the right of foreclosure if such a right has been contracted for. In view of that reported case and for the reasons I have mentioned there, Plaintiff is entitled to sue for foreclosure whether he will get that decree or not in view of the facts of this case would be altogether a different matter. That being so, I have no hesitation in applying, Article 133, Limitation Act, because this is a suit for foreclosure and has admittedly been instituted within 30 years from the date when the mortgage money fell due and became recoverable.

Apart from this consideration, I hold that Article 118 even if applicable to this case is ineffective for this reason that the amount became recoverable according to the terms of the contract not on 15th Azur 1343 Fasli but on 15th Azur 1344 F. The lower court came to the conclusion otherwise for this reason that in the absence of any evidence as to the intention of the parties the document will have to be resorted to in this matter. The date mentioned there and the period for which mortgage was made being repugnant to each other the court concluded that the intention of the parties is evident from the document itself was for the mortgage to subsist upto 15th Azur 1343 Fasli on account of that date being a definite one to indicate the intention of the parties and the following sentence of 3 years period of a general nature will be necessarily of lesser importance in finding the intention sought.

On the other hand, I am of opinion that the period of the mortgage as stated in this document 8 years there is every reason to assume that it is the period on which all the emphasis lay as the parties came to terms and contracted accordingly. Those who have experience and knowledge of agricultural contracts'' in this country know perfectly well that the agriculturist does not go about in his daily dealings usually by particular dates but certainly the period of mortgage would be a very important matter for them. This is a case from Marathwadi district and it will be very difficult for me to come to the conclusion that in the circumstances of this particular case the parties attached any importance to that particular date, 15th Azur 1343 Fasli. Perhaps the parties were fully unaware of the Fasli calendar.

But of course these are mere guesses and probabilities and the matter cannot be decided solely on them unless supported by the record. If this date was really important to the parties and as the question of limitation was raised it was open to the Defendant to show that that particular date had some particular importance in the mind of the parties so as to enable the court to overlook the period of 3 years contracted for. The Fasli year begins from 15th Azur and if the parties were particular about dates, I do not see any reason why it was not convenient to terminate this contract of mortgage on the end of the Fasli year instead of dating it to the 15th. Surely a period of 15 days is almost negligible in a case of this kind. Evidently the 15th Azur was fixed because the year from the date of mortgage ended on that date.

The year 43 Fasli was to my mind inserted erroneously under the impression that the 3 years period concludes on that date and having come to 3 years contract the date was probably found by the scribe. Apart from the fact that similar contracts are usually made for 3, 5, 6 years, I am supported in this view that it was a contract for 3 years, in this fact that one of the terms of this deed lays down that interest will be paid annually from year to year from the date of the contract. Now if this contract was only for 2 years there was no need to make this term in these words because the only date on which interest would be payable would have been 15th Azur 1342 Fasli and then of course the year after the whole amount of mortgage money and interest would become due. It was easier and simpler to say in that case that interest will be paid on 15-1-42 and the whole amount on 15-1-43 and there was no need to adopt the present phraseology.

Even if Article 118 applies the period will commence from expiry of 3 years and the suit is instituted within limitation i.e., within the period of limitation of 12 years if accounted from 15th Azur 1344 Fasli, I, therefore, hold that in either case the suit is free from the bar of limitation.

On other points the lower courts have found for the Plaintiff. I see no reason to disagree with them. Of course consequences of the finding of fact under issue No. 4 will have to be determined. I have it on the oath of the Plaintiff in the witness box and in the absence of any evidence of rebuttal I have no hesitation in holding that Plaintiff is a licenced money lender. Indeed it would be an act of unusual daring to swear to it when he does not hold the necessary licence, and the Defendant could have easily rebutted it. Of course, the accounts have not been supplied to the Defendant from time to time as found by the trial court and for that reason Plaintiff will not be entitled to the interest and the costs of this suit. But. I see no reason to dismiss this suit to the extent of the principal amount with foreclosure terms and a foreclosure decree.

I, therefore, allow this appeal and reverse the judgment of the lower courts and decree the Plaintiff''s suit for foreclosure for the principal amount of Rs. 300/- and a preliminary decree is granted therefore with a period of 6 months to pay the mortgage amount. No order as to costs for the reasons above mentioned.