Dhani Sahu and Others vs Bishun Prasad Singh and Others

Fazl Ali, J.—This is an appeal by the plaintiffs in a mortgage suit which has been dismissed by the learned Subordinate Judge of Gaya. The mortgage bond which was the subject-matter o� the suit had been executed by one Basdeo Prasad Singh on 9th August 1909 to secure a loan of Rs. 2000 by mortgaging certain properties. Basdeo Prasad Singh died in 1910 leaving two minor sons Bishun Prasad Singh and Pasupat Prasad Singh who have been impleaded as defendants 1 and 2 in the suit. During the minority of these defendants, their mother Deolochan Kuer was appointed their guardian by the District Judge. On 1st August 1918 Mt. Deolochan Kuer and Jagdeo Prasad Singh, a separated brother of the deceased Basdeo Prasad, executed a sale deed (Ex. F) in respect of certain properties including the properties mortgaged under the bond in suit to the plaintiffs and another creditor of theirs, after obtaining the sanction of the District Judge. On the date of the sale deed the amount due under the mortgage was calculated to be Rs. 5594-4-0 and this was stated in the deed to be part of the consideration.

On 28th April 1928 Bishun Prasad Singh who had now attained majority brought a suit for the cancellation of the sale deed on behalf of himself and his minor brother defendant 2. The suit was decreed by the Subordinate Judge who held among other things (1) that the directions of the District Judge with regard to the sale had not been strictly followed; (2) that many of the debts for the payment of which the sale deed was executed had been incurred by Jagdeo after the death of Basdeo and some of them had been incurred after the appointment of Deolochan as the guardian of the minor sons of Basdeo and so they could not possibly bind the estate of the minors; (3) that Jagdeo had acted fraudulently towards the minors by saddling the estate with his personal debts; (4) that most of the debts, recited in the sale deed (Ex. F) did not appear in the schedule of debts on which the sanction of the District Judge was based and (5) that the order of the District Judge appointing Mt. Deolochan as guardian of the minor and sanctioning the sale had been obtained at the instance of the plaintiffs. These findings were virtually upheld on appeal which came before the late Chief Justice and myself. The learned Chief Justice who delivered the judgment in the appeal pointed out that these plaintiffs were old creditors of Jagdeo and in view of the fact that they had themselves insisted on the appointment of the guardian they were, if not parties to the fraud by Jagdeo on the minors, certainly possessed of information which should have put them on their guard. After the decision of the appeal the plaintiff on 16th June 1936, brought the present suit which has been dismissed by the learned Subordinate Judge on the ground of limitation. The main question which has therefore to be decided in the present appeal is whether the suit is barred by limitation.

The plaintiffs have put forward two grounds to show that the suit is not barred by limitation, notwithstanding the fact that it was brought nearly 27 years after the execution of the mortgage bond. It is said in the first place that the effect of the decree in the suit brought by Bishun Prasad for the cancellation of the sale deed Ex. F was that the rights of the plaintiffs as well as the liabilities of the defendants under the mortgage bond were revived, and secondly, that the plaintiff''s rights under the mortgage bond had been kept alive by repeated acknowledgments of the debt due under the bond. The defendants on the other hand contend that the plaintiffs having with their eyes open entered into a transaction which purported to discharge the mortgage bond, cannot be allowed to say that the mortgage bond is still alive specially as they were, if not party, at least privy to the fraud practised by Jagdeo upon the mini or; and further that the alleged acknowledgments are not binding upon the minor.

I will first deal with the important question as to whether the mortgage bond can be said to have been revived as a result of the decree in the suit brought by defendant 1 for setting aside the sale deed of 1st August 1918. Now, as the learned Subordinate Judge has pointed out, on the findings arrived at in the previous litigation, the plaintiffs cannot be said to have acted in good faith in concluding the transaction of 1st August 1918. They were undoubtedly old creditors of the family and as such they knew many facts. The utmost that can be said in their favour is that in their anxiety to realise their own money they paid no heed to the interest of the minors. But that is only another way of saying that they deliberately took the risk of entering into a transaction which was not entirely for the benefit of the minor. If this view is correct, then I do not see how they can ask the Court to treat their mortgage as alive in spite of the fact that they had put an end to it by their own act. To allow them to do so, would be to allow them to take advantage of their own wrong or reckless behaviour. This point seems to have been made clear in the judgment delivered by Courtney-Terrell C.J., in the previous litigation as will appear from the following extract from that judgment:

It is argued on behalf of the defendants that equity demanded that if we should be disposed to set aside the sale we should restore the position of the defendants mortgagees in respect of the debt which the sale was intended to discharge, and it was contended that as the mortgagor had sold a portion of the security, such equitable consideration was no longer possible. To this contention the answer, in my opinion, is that it is only a bona fide purchaser who is entitled to equitable consideration. The defendants abandoned their security under circumstances which entitled them to no protection. If they should have any remedy in respect of the mortgage money they may pursue in such manner as they may be advised but we cannot restore their position as mortgagees, nor are they entitled to any equitable consideration upon an order which we must make setting aside the transaction.

I have no doubt that what this passage means is that as the present plaintiffs had abandoned their mortgage security, they could not enforce their mortgage, but they are entitled to pursue any legal remedy in respect of the money due under the mortgage bond. It was urged on behalf of the plaintiffs-appellants that in view of Section 65, Contract Act, the mortgage deed should be deemed to have revived automatically and the plaintiffs should be allowed to pursue their remedy under the mortgage. But the difficulty which confronts them is that the point has been already decided against them in the previous litigation. Besides Section 65 is very general and all that it says is that when the contract becomes void, any person who has received any advantage under it is bound to restore it or make compensation for it to the person from whom he received it. In the present case since the plaintiffs chose at the time of the sale to abandon their mortgage security and use the money due under the mortgage in part payment of the price of the vended property, the requirements of Section 65 will, in my judgment, be fully satisfied if they get a money decree for that specific sum which has been lost to them by the sale being set aside. Thus, the conclusions which I have arrived at are (1) that the plaintiffs cannot enforce the mortgage bond; the question whether it is barred by limitation does not arise; (2) that the plaintiffs are entitled to recover the specific sum of money which was mentioned in the sale deed (Ex. F) as having been due under the mortgage of that date and which was set-off as part of the purchase money. It was contended on behalf of the respondent that as there is no specific prayer In the plaint for the recovery of this money, no relief can be granted to the plaintiffs, but in my opinion the plaintiffs ought to get such relief as they are entitled to get on the facts established Upon the evidence in the case.

I will now deal with the respondent''s second contention that the plaintiffs'' right to recover the specific sum of money is also barred by limitation. There can be no doubt on the authorities cited to us that the present suit will be governed by Article 97, Limitation Act, which provides that for money paid on an existing consideration which afterwards fails, the period of limitation is three years from the date of the failure. But the question, as to when time began to run in the present case, is not free from difficulty. In Juscurn Boid v. Pirthichand LaL AIR 1918 P.C. 151 , their Lordships of the Privy Council observed as follows:

The only question is whether time began to run, as the plaint alleges, from 3rd August 1906 the date of the appellate decree, or as the defendant-respondent contends from 24th August 1905 the date of the original decree in Suit No. 248 of 1904. Both Courts have held that the failure of consideration was at the date of the first Court''s decree. Their Lordships feel no doubt that as between these two decrees this is the correct view, for, whatever may be the theory under other system of law, under the Indian law and procedure an original decree is not suspended by presentation of an appeal nor is its operation interrupted where the decree on appeal is one of dismissal.

This decision has been explained in a number of oases wherein it has been pointed out that the rule laid down by the Privy Council is subject to certain exceptions. For example, when the first Court decides against the plaintiff and the second Court reverses the decree and the decree of the second Court is in its turn reversed by the High Court, the starting point must be the date of the later decree, for it is then that there can be said to be a failure, of the consideration. Again, if the first Court holds in the plaintiff''s favour and the second Court against him, the starting point will be the date of the latter decision. A third exception, which is more material for our purposes is to be found in a line of decisions in which a distinction has been drawn between eases in which the vendee was never in possession and those where he was in possession and afterwards dispossessed. Dealing with this matter dgers, J. observes as follows in Sankara Variar v. K.K. Ummar AIR 1923 Mad. 46 :

Had their Lordships laid down in Juscurn Boid v. Pirthichand Lal AIR 1918 P.C. 151 a general principle which would govern all cases of this nature, we should of course be bound by it. They, however, say that the plea that the period of limitation began to run when possession was lost was ''belated'' and proceed to hold that the decree of the first Court is the starting point of limitation, qualifying this, however, by this passage, there may be circumstances in which a failure to get or retain possession may justly be regarded as the time from which the limitation period should run, but that is not the case here. The quality of the possession acquired by the present purchaser excludes the idea that the starting point is to be sought in a disturbance of possession or in any event other than the challenge to the sale and the negation of the purchaser''s title to the entirety of what he bought involved in the decree of 24th August 1905. If further support of this view be required it may be found in the express provision of Section 14 of the Regulation which directs that in the suit for reversal itself the purchaser is to be indemnified against all loss. (P. 679).

What was the quality of the possession in the case before them Apparently, the purchaser received an amaldastak or order for possession u/s 15 of Bengal Regulation, 8 of 1819. This does not seem to have put him in actual physical possession of the property but to have been an order to the ryots to attorn to him as the purchaser. I think the possession was different in the case before us and that actual possession was delivered to the respondent under Ex. Rule Further the deed (Ex. B) would appear to be not void ab initio but only voidable. It would have been open to the succeeding Thamburatty to have confirmed the transaction, cf. Ananda Chandra Bhuttacharjee v. Carr Stephen (''92) 19 Cal. 127 , and it seems reasonable to hold that the consideration did not fail till respondent was deprived of the possession of the property which he had acquired under Ex. B.

The same view has been expressed in Muhammad Siddiq and Others Vs. Muhammad Nuh , Ratanbai Vs. Ghashiram Gangabisan Wani, and Mt. Gopal Dai v. Dhanna Mal AIR 1927 Lah. 570 10. In the present case it is admitted that the plaintiff was dispossessed within three years of the suit and, therefore, the suit cannot be held to be barred by limitation.

The only question which now remains to be dealt with is as to what should be the form of the decree in this case. Now it appears that though in the previous litigation in which the sale deed of 1st August 1918 was set aside, defendants 1 and 2 got a decree for mesne profits, yet they never took any steps to have the mesne profits ascertained. It was contended on behalf of the appellant that the right of defendants 1 and 2 to recover mesne profits is barred by limitation and, therefore, the appellant should get a decree for the entire sum of Rs. 5594-4-0 with interest up to date. I am, unable to agree with this contention. The plaintiffs were admittedly in possession of the property till some date in 1935 or 1936 and if defendants 1 and 2 had taken the necessary steps to recover mesne profits they would have been entitled to recover it up to that date. Their failure to institute proceedings to recover the mesne profits cannot, in my opinion, debar them from asking the Court to set-off the mesne profits'' as against the sum claimed by the plaintiffs which may be found to be recoverable from them in the present suit. It is quite conceivable that they did not take any steps to recover mesne profits because they anticipated a suit like the present. In these circumstances, I would remand this suit to the Court below and direct that Court (1) to ascertain the date on which the plaintiffs were dispossessed; (2) to calculate the amount recoverable by way of mesne profits by defendants 1 and 2 from the plaintiffs up to that date and (3) to calculate the amount of interest at six per cent, per annum which in our opinion the plaintiffs ought to get upon Rs. 5594-4-0 from the defendants up to the date of the suit and add it to that sum. If the sum which is thus found to be due to the plaintiffs, exceeds the sum due to the defendants from the plaintiffs, there will be a decree for that sum. If the former sum is found to be less than the latter then evidently nothing will be payable by the defendants to the plaintiffs and the plaintiffs'' suit must be dismissed. This appeal will be finally disposed of when the Court below will submit the findings to this Court which should be done as expeditiously as possible.

Shearer, J.

I agree.