Joykrushna Mahapatra and Others vs Radhakrushna Mahapatra

James, J.—This is a second appeal from an order refusing to a mortgagee a personal decree under Order 34, Rule 6. The mortgage in question is a simple mortgage by which certain property was given as security for a loan of Rs. 150 which was to bear interest at 25 per cent per annum. During the pendency of the mortgage the mortgagee had to pay the sum of Rs. 244 in order to save the mortgaged property from sale for arrears of rent. This amount was added to the principal money claimed as secured by the mortgage and was included in the decree. The mortgaged property realised on sale some portion of the mortgage debt and the mortgagee applied for personal decree for the balance. In the mortgage bond, after acknowledging receipt of the loan, the mortgagor says:

After having the said amount in a year from this date, I shall take back the document.

He then goes on to stipulate that if he should pay by instalments, the payments shall be endorsed on the back of the bond, being appropriated first towards interest and then towards principal. If he defaults in repaying this amount, the lender will sue him for realisation of the principal and interests get the mortgaged property attached and sold and realise his dues out of the sale proceeds. The Courts below considered that the ambiguous form of the undertaking to repay in a year could not be properly regarded as a personal covenant for repayment of the loan. Mr. S.C. Chatterji on behalf of the appellants argues that the mere unqualified admission that a loan has been taken should be held to imply a promise to repay, and also that the correct reading of the stipulation regarding repayment in one year would imply an actual promise to make the payment by that time.

Regarding the second point, it is observed that the learned Munsif, who was himself an Oriya, interpreted these words as meaning:

I take the loan promising to pay the amount with interest in a year from the date of the bond;

but the learned Subordinate Judge considered that this interpretation of the Oriya was incorrect and that the stipulation merely was that when the amount was paid, the mortgage-bond would be taken back. On the question of the manner in which this Oriya expression should be translated, I would have accepted the decision of the learned Subordinate Judge as a finding of fact and would have treated this appeal as concluded by findings of fact had it not been for the decision of this Court in Chhathi Lal Sah Kalwar Vs. Bindeshwai Prasad Sahu and Others, .

In that case the learned Judges had before them the question of whether a mortgagee was entitled to sue for his mortgage money u/s 68, T.P. Act.

The suit had been instituted on allegations which if substantiated made Clauses (b) and (c), Section 68, T.P. Act, applicable to the case, but these allegations were negatived by the findings of the Courts below and the only question which the learned Judges had before them was whether the mortgagee could sue for his money u/s 68(a), T.P. Act. The operative portion of the bond is quoted in the report and there is nothing in it which can by the utmost ingenuity be construed into an express promise to repay the loan, but Kulwant Sahay, J., pointed out that a covenant to pay must be implied in every transaction of loan, that when a person borrows money, the borrower must be deemed to have entered into an implied contract to repay the money borrowed, and that therefore the plaintiff must be held to be entitled to sue for the mortgage money on this implied contract to repay. It is suggested that in the present case, a personal covenant to repay cannot be implied, because the remedy of the mortgagee in default of payment is described as lying in a suit for realisation of the money to be realised out of the sale proceeds after the mortgaged property has been sold but I consider that Mr. Chatterji''s argument must prevail, and that on the strength of the decision in Chhathi Lal Sah Kalwar Vs. Bindeshwai Prasad Sahu and Others, , it must be held that unless there is some specific condition in the bond absolving the borrower from liability to repay the loan, he must be held liable on the implied covenant contained in his unconditional acknowledgment of the fact that he is taking a loan of Rs. 150.

The learned advocate for the respondent supporting the decree of the lower Court argues that whether we find an implied covenant to repay the Rs. 150 or whether we do not, the sum of Rs. 244 paid by the mortgagee to save mortgaged property from sale should be separated from the rest of the principal money. When the mortgagee has made this payment, he is entitled to add this amount to the mortgage-debt: Rakhohari Chattaraj v. Bipra Das Dey (1904) 31 Cal 975 and if he is entitled to add this amount to the mortgage-debt, the proper method of suing for recovery of the amount was by suing at the same time as he sued for the mortgage money. No question of limitation arises here, since the suit was instituted in the year following the date of the payment, and it is certainly clear that whatever view the lower Courts may have taken regarding the covenant for repayment of the original mortgage-bond, the mortgagee was entitled to a decree under Order 34, Rule 6 for that portion of the mortgage money which represented the amount paid to save the mortgaged property from sale.

I consider therefore that this appeal must be decreed. I should note that I regard myself as bound by the decision in Chhathi Lal Sah Kalwar Vs. Bindeshwai Prasad Sahu and Others, and obliged to follow its principle, but if the matter had been res integra I should have said that unless there is something in the mortgage-deed which can be construed as an express covenant for repayment, the mortgagee should not under the provisions of the Transfer of Property Act be held to be entitled to a personal decree against the mortgagor. But as I have said I am bound by the authority and this appeal must be decreed with costs throughout.