Kirti Narayan Singh and Others vs Surendra Mohan Singh and Others

Wort, J.—This appeal arises out of an action on a usufructuary mortgage. The plaintiffs'' claim was for sale, alternatively for the mortgage moneys. The term of the mortgage was for the years 1314 to 1323 Fs. But it is not denied that shortly after the date on which the mortgagees should have entered into possession they were dispossessed. The argument advanced by the mortgagee plaintiffs who are the appellants before me) is generally speaking, that their rights were created u/s 68, T.P. Act. The only question argued before this Court is the question of limitation, the Court below holding that the action was barred by limitation as the plaintiffs'' right of action arose in the year 1907 when they were dispossessed.

The contention of the learned advocate appearing on behalf of the plaintiff-appellants before me is that the plaintiffs had two causes of action: one arose in 1907 which is now barred by limitation, and the other arose in Bhado, 1323 Fs. that is, about 1916, the last date of the period during which the plaintiffs were to be in possession. The contentions in this regard are based on a decision of this Court in Mukhdeo Singh v. Harakh Narayan Singh 1931 Pat 285. That was a case involving the question of an instalment bond with a default clause, it being argued on the one hand that the cause of action arose on the debtor making default on the due date of each instalment; and, secondly, that it was within the discretion of the creditor to take advantage or not as he pleased on the default clause, and, if he did not, then limitation ran only from the date at which the various recurring causes of action arose.

There has been a great discussion in the High Courts regarding this question; in some instances the High Courts following the leading cases in England in which the law has been settled now for very many years one of which was Reeves v. Butcher (1891) 2 QB 509, the other line of cases deciding that a different principle applied and that cause of action arose at the date of each instalment and that the creditor was not bound to elect to take advantage of the penalty clause. These decisions were against the leading decisions of England. The question again came up in the case of Ram Charan Lonia v. Bhagwan Das 1926 PC 68, when their Lordships of the Privy Council declined to express a definite view with regard to the matter as the case before them was not an appropriate one for that purpose, ultimately the matter being finally decided in Lasa Din v. Gulab Kunwar 1932 PC 207, in favour of the view which was taken in this Court at any rate so far as mortgage bonds were concerned.

I mention this case, because it related to a mortgage; but in my judgment it has no application to the case before me, as it was a case of an ordinary mortgage with a default clause as regards the payment of interest. In the view I take of the matter, neither the case to which I have just referred nor any of the other cases relating to instalment bonds have strictly any application to the case under decision before me.

Now, there may be two views. It may first be held that the mortgage which was the subject matter of the action, was a combination of a simple and usufructuary mortgage as has been held by the Courts below. I have no doubt in my mind that the decision of the Courts below in this regard is wrong, if the decision is based on what it appears to be based, namely the fact that the mortgage was described as a simple and usufructuary mortgage. The test is not how the mortgage was described, but what was it in fact and in law.

The mere fact that the word which is translated as "simple" is used does not make the mortgage any the less a pure usufructuary mortgage if on the proper construction that is so. But whichever view one takes, it is either a combination of a simple and usufructuary mortgage or it is merely a usufructuary mortgage. The importance of this point arises by reason of Section 98 because it has been argued by the learned advocate on behalf of the appellants that there were two causes of action: one in 1907, by reason of the appellant''s dispossession, and the other arose by the terms of the contract itself.

We can exclude from our consideration the cause of action arising in 1907 because it is barred by limitation; and it was the appellants contention that Section 68 did not apply because it was an anomalous mortgage, and therefore by Section 98 was to be governed by the terms of the contract between the parties. The argument was put in this way: that although there was no express provision relating to the repayment of the money, there was an implied obligation to repay. Therefore the contract between the parties u/s 98 was the contract to repay in 1323.F, which the learned Judge in the Court below has said was to be implied in the case.

The whole point as to Section 98, however, is answered by the finding of the Court below that it is a combination of a simple and usufructuary mortgage. But even if that finding is wrong (as I suggest it is), the section is still excluded, as on a plain construction of the deed it would appear to be a usufructuary mortgage.

We therefore are thrown back on the law as we find it in the Transfer of Property Act, as being the rights of a mortgagee. A number of authorities have been quoted to establish the principle that, although there may be no personal liability in the sense that there is an express agreement to pay the money, it is to be implied by law; and the learned advocate appearing on behalf of the appellants would therefore have me to read Section 68(a) as meaning an implied agreement. It is impossible on the language of the section to come to that conclusion.

In England there is an implied covenant creating personal liability. In India this is not so, and any action claiming the mortgage moneys simpliciter must be made u/s 68(a) if at all. I must hold that there was no right u/s 68(a) to bring an action for the mortgage money. Apart from the dispossession in 1907, no such right, if it existed, would have given a cause of action in 1323-Fs, the date at which the term of the mortgage bond expired. The finding on this question seems to me to be an answer to the whole argument addressed by the appellants in the case.

Their only claim to have alternative causes of action would be that for some reason or other in 1323-Fs, they had a right to sue for the mortgage money and that being dispossessed in 1907 they had also a right to sue for the mortgage money u/s 68. Now, let us see for a moment what other causes of action they may have had. They claim in this case a decree for sale. Section 67 gives a right to bring an action for a decree for sale of the property after the mortgage money becomes due. As the learned advocate has said, it cannot be denied (the principle is elementary) that although there was no express covenant to repay the money, there was implied obligation to repay it in 1323-F, and therefore in that sense, the mortgage money became due within the meaning of Section 67. But we are met immediately with Sub-clause (a), Section 68 which expressly excludes a usufructuary mortgage from the operation of the section as also an anomalous mortgage.

So no right for sale of the mortgaged property could possibly arise u/s 67; that is clear. u/s 68(c)(as the Act was amended) the plaintiffs in this section would have a right to sue for the mortgage money as they were dispossessed in 1907. Incidentally I may mention that if the argument is to be supported that this was not a usufructuary mortgage (it obviously was not a simple mortgage), then the only right of action would be within six years and consequently would be barred in any event. But I do not decide the case on those grounds.

While dealing with the matter I should like to refer to a decision of this Court in Chhati Lal v. Bindeshwati Prasad 1929 Pat 605. The learned Judges deciding that case came to the conclusion that, as the mortgage (which was so called usufructuary) was for a term it could not be held to be a usufructuary mortgage. In that case however the decision of the Privy Council in Ram Narain Singh v. Adhindra Nath Mukerjee 1916 PC 119 was brought to the attention of the Court.

But it is remarkable to notice that no reference was made to that part of the judgment of their Lordships of the Judicial Committee which related to the very question decided in Chhati Lal v. Bindeshwati Prasad 1929 Pat 605, that is to say, the question of whether the mortgage was usufructuary. They however omitted to notice that their Lordships had decided on a previous occasion that the bond, although for a term, was a usufructuary mortgage as will be seen from the observations at pp. 386 and 387 of the report. So, in so far as the appellants'' case depends upon the contention that it is not a usufructuary mortgage, having regard to the decision of the Judicial Committee in Ram Narain Singh v. Adhindra Nath Mukerjee 1916 PC 119, I feel I am not bound by the decision reported in Chhati Lal v. Bindeshwati Prasad 1929 Pat 605.

As I have already pointed out, it only makes the appellants'' case worse as it would be barred by six years'' limitation. To revert to the point with which I was dealing, as I have pointed out, Section 67 does not apply. Section 68(b) would apply, and it therefore comes to be determined whether, having lost the right of action in 1907, as being barred by limitation, the appellants had any further cause of action in 1323-F.

In my judgment for the reasons which I have stated the answer must be in the negative. The mortgage money as such became due u/s 68(b) in 1907 and not otherwise as Section 67 is excluded and Section 68(a) gives only right to sue for the mortgage money arising by reason of Section 68(b). There was no right of action in 1323-F. if the appellants had remained in possession, unless such circumstances as were indicated in the case reported in Ram Narain Singh v. Adhindra Nath Mukerjee 1916 PC 119, (to which I have already made reference) were present. Being a usufructuary mortgage the appellants'' rights in 1323-F, were to remain in possession until they were paid.

To repeat myself no such circumstances as were indicated in the Privy Council case existed in 1323-F. The cause of action accruing to the appellants u/s 68(b) would then have arisen instead of in 1907. The only conclusion therefore at which I can arrive is that, by reason of the dispossession by the defendants in 1907 the appellants had a cause of action and that in the circumstances of the case they had no other causes of action. For these reasons which I have somewhat elaborately stated, it seems to me that the decision of the lower appellate Court was right. The appeal therefore must fail and be dismissed with costs.