Mochi Mulji Valji vs Acharya Dolatram Chatrabhuj

Shah, C.J.—This revision application raises a question relating to the bar of Order 2, Rule 2, Code of Civil Procedure. The opponent is a mortgagee under a mortgage executed by the applicant on 14-12-1948. The mortgage was to secure Rs. 999/- with interest at 71/2 percent, and the sum was to be paid at the end of two years. Some of the other terms of the mortgage were these. The mortgagor was not to redeem the mortgage before the expiry of two years and even if he asked for redemption within the stipulated period, he was to pay interest for two years. The house was given in possession of the mortgagee who was at liberty to let it to anyone he liked; the rent which was realised was to be credited towards interest, and if it exceeded the interest, the excess was to be credited towards the principal and if it fell short of the interest the mortgagor was to pay it. Expenses of the upkeep of the house were to be met by the mortgagee and the mortgagor was to reimburse the mortgagee for the same. Interest for every six months was to be paid in advance. Government and municipal taxes were to be paid by the mortgagee in the first instance and the mortgagor was to pay the same together with interest to the mortgagee. The mortgagee was entitled to recover the entire sum due under the mortgage bond from the mortgaged property as also from the other property of the mortgagor. "The document no doubt recites that possession had been delivered to the Plaintiff, but the statement is not true and it is also not true, as will be seen later, that the Plaintiff had let the house to the Defendant and the latter was in possession under a rent note.

On the strength of the clause contained in. the mortgage document that interest was to be paid in advance every six months, the Plaintiff first brought a Small Cause Suit No. 30 of 1950 to recover interest for the first half yearly, namely, from the date of the mortgage till 13-6-1950. The judgment in that case, Ex. 9, which contains a substance of the plaint of that suit, mentions that Rs; 47-8-0 were due either by way of interest or rent and it was not a suit for mere rent as has been contended by Mr. Hathi. The lease was not produced and the case of letting was not held proved and the Court specifically decreed the sum as for interest. The Plaintiff brought a second suit being Small Cause Suit No. 54 of 1951 on 6-4-1951 for interest for one year due from 14-6-1950 to 13-6-1951. The plaint of that suit is not on the record, but it appears that the claim was decreed as one for interest, it being a consent decree. Before the institution of the above said suit No. 54 of 1951, the two years'' time for redemption of the mortgage had expired and the mortgage had become redeemable on 14-12-1950.

The Plaintiff brought a third suit being Small Cause Suit No. 62 of 1952, from which this revision application arises, to recover rent, as he called it, for the period between 14-6-1951 and 13-6-1952, and to this suit the Defendant pleaded, inter alia, the bar of Order 2, Rule 2, Code of Civil Procedure. The learned Judge rejected this plea holding that the mortgage contained a clause for payment of every six months interest in advance and that the suit was brought in pursuance of the said agreement, that the cause of action for recovering interest was distinct from, the cause of action for recovering the principal and that the suit was, therefore, not barred under Order 2, Rule 2. At the same time the agreement as to rent set up by the Plaintiff was held not proved and the claim was decreed as one for interest. The Plaintiff was conscious of the fact, that the plea of the sum being due as rent was not held proved in the earlier suits and by way of precaution he has also mentioned in paragraph 4 of the plaint the sum as due for interest. Anyway the learned Judge passed a decree on the- footing of the sum being due as interest and not as rent.

The contention of the learned advocate for the Defendant is that the principal sum had become due at the time when the second suit No, 54 of 1951 was filed on 6-44951 and that the Plaintiff haying failed to sue to recover the principal sum in that suit and having sued for interest only, a second suit for principal will not lie and will be- barred under Order 2, Rule 2, Code of Civil Procedure, and if a suit for the principal becomes barred then the present suit which is for interest on that principal also becomes barred. For the present purpose, I will assume that the proposition contended for in the latter part of the above argument is correct. Mr. Hathi for the Plaintiff too has not urged to the contrary. It may be taken, therefore, that if a suit to recover the principal becomes barred by reason of Order 2, Rule 2 then a suit for interest, as has been brought, will also be similarly barred, and no distinction between the two could be made.

Now, Order 2, Rule 2 requires that a suit shall include the whole of the claim which the Plaintiff is entitled to make in respect of the cause of action, but a Plaintiff may relinquish a portion of his claim and where a Plaintiff either omits to sue in respect of or intentionally relinquishes, any portion of his claim, then a second suit for the portion so omitted or relinquished will note lie Sub-clause (3) of Rule 2 says that the omission to sue for one of several reliefs without the leave of the Court will bar a second suit for the relief so omitted, but this sub-clause is not very material in the present case, since the contention is that the Plaintiff has omitted to sue for a portion of the claim. It is urged by the learned advocate that the principal and unpaid interest had become due at the end of the stipulated period of two years namely on 14-12-1950, and that the cause of action to recover the same had already arisen in favour of the Plaintiff. Similarly the cause of action for interest payable in advance for the half year from 14-12-1950 to 13-6-1951 had also arisen and it is urged that the cause of action was the same in respect of both these claims. It is argued, therefore, that Order 2, Rule 2 applies and the Plaintiff having omitted to sue for the principal when he brought the second suit No. 54 of 1951, he cannot now sue for the principal and therefore not for interest due on the said principal subsequent to that suit.

However, the two causes of action in the present case are not the same and in order to appreciate that this is so, it is necessary to pay attention to the terms of the mortgage. One of these terms, which is a distinct provision, is that interest shall be payable in advance every six months so that the cause of action, for every half year that commences, arises when the interest is not paid and it arises after the commencement of that half year. The principal becomes due at the end of two years and the mortgage gives a right to recover it as also all claims arising under the mortgage by sale of the mortgaged property and from the other property of the debtor. In respect of the interest payable in advance every half year the bond does not provide that it was to be recovered from the mortgaged property and the remedy was a personal one against the debtor. It is true the document does not specifically say that the creditor may recover the interest for the half year by a suit, but that position was understood and has never been in dispute. In fact the previous suits were decreed on the footing that the creditor was entitled to recover it by a suit. Those decrees were passed personally against the debtor and not against the mortgaged property. No doubt the principal had become due on 14-12-1950 and the Plaintiff had become entitled to recover it, but the crucial question is not whether the Plaintiff was entitled to recover it. The question is whether the cause of action for its recovery was the same as the cause of action for the recovery of the half-yearly interest payable in advance. In my judgment the mortgage contains two distinct agreements, one for the payment of the half-yearly interest in advance and the other for the payment of the principal together with the unpaid interest and any other sum due under the mortgage, and if that is so, the cause of action of recovering the half-yearly interest in advance is not the same as the one for recovering the principal and Order 2, Rule 2 will not therefore apply.

In support of his contention the learned advocate for the Defendant has relied on - ''Md. Hafiz v. Mirza Md. Zakariya AIR 1922 PC 23 (A). Clause 2 of the mortgage bond in this case provided that the interest should be paid on the bon$ as each month went by and that if it was not paid for six months, the creditor was competent to realise only the unpaid amount of interest due to him, or the amount of interest and principal both, without waiting for the expiration of the time fixed. There was thus what may be called a default clause. Clause 7 provided that if the amount secured by the bond, with interest, should not be paid after the expiration of three years, the creditor should be entitled to realise by bringing a suit for the whole of the amount of the principal and interest. Three years elapsed after the deed had been executed and no interest was paid, with the result that the mortgagee had the power to recover the principal as well as the interest or the interest alone. He sued to recover- the interest alone and in a subsequent suit claimed to recover the principal and the interest, less, the sum covered by the previous proceedings.

On these facts their Lordships of the Privy Council held that the cause of action which the Plaintiff possessed at the time of the first suit was due either to the fact that interest had been, unpaid for more than six months, or that the three years had elapsed, and the principal was unpaid, and that the Plaintiff could have sued to realise the whole amount secured by the deed. The nonpayment of interest under Clause 2 of the deed was the sole clause upon which they were entitled to ask either for the limited relief for interest or the larger relief for interest and principal both, so that at the time of the non payment of interest the Plaintiff had become entitled to realise the principal as well, and that was the main reason for holding that the cause of action was the same. But that is not so here because the failure to pay interest in advance did not entitle the creditor to sue for principal as well. No doubt at the date Suit No. 54 of 1951 was filed the two years time had, expired and the Plaintiff could have realised his principal, but that was because the period had expired and not on account of non-payment of the interest in advance. On the facts, therefore, the above Privy Council decision is distinguishable.

In - ''Kishan Narain v. Pala Mal AIR 1922 PC 412 (B), the principle accepted was that where a mortgage provided for an independent obligation to pay the principal amount and the interest then a suit brought to obtain a personal judgment in respect of the interest alone, would not prevent a subsequent claim for payment of the principal. The cause of action in such case would be distinct. The matter is, however, different if the non-payment of the interest causes the principal money to become due, as in that case the cause of action - the non-payment of the interest - gives rise to two forms of reliefs which the Code provides shall not be split. There the mortgage deed dated 19-1-1904 enabled the mortgagors to redeem within two years if they thought fit and it contained an express promise on the part of the mortgagors to pay interest for the first year and provided that if the interest were not paid for the first year, it was competent to the mortgagee to cancel the fixed term and to realise.

Interest was paid up to 4-7-1905 and no further interest was paid thereafter and on 17-11-1908; the mortgagee sued for the unpaid interest stating, that a suit for the recovery of the principal and'' future interest will be brought later on. The relief claimed was against the Defendants recoverable from the mortgaged property and the other property of the Defendants. The second suit was brought later for the principal and subsequent interest. It was held that the second suit was barred because the non-payment of the interest caused the principal money to become due. Emphasis was also laid on the words "recoverable from the mortgaged property" which were held as meaning that the Plaintiff had intended in the first suit to enforce the mortgage security. The facts of this case too are distinguishable and the actual decision does not affect the present case. However, the rule enunciated in that case favours the Plaintiff because there was, in the present case, an independent obligation to pay the interest and (sic) equally independent obligation to pay the principal and the unpaid interest. Therefore, the cause of action would be distinct, and where the cause of action is distinct Order 2, Rule 2 does not come into play. See also - AIR 1949 78 (Privy Council) .

In - ''Nidhan Singh v." Prem Singh AIR 1949 Lah 498 (D), the mortgage provided that the mortgagee could at any time realise the principal and interest by bringing the mortgaged property to sale. It also provided that if the interest was not paid then the mortgagee would either allow the interest to accumulate for a period of twelve years or he could secure payment of interest and compound interest by bringing a separate suit for the same. So far as the payment of interest was concerned, there was no reference in the mortgage providing for its realisation from the mortgaged property. The mortgagee sued for and obtained a decree for interest only and later brought a suit for principal and subsequent interest, and it was held that the cause of action in the first suit was distinct from the one which formed the foundation of the second suit and the second suit was not barred under Order 2, Rule 2. It will be seen that in that case there was no time limit fixed for payment of principal and interest, and the mortgagee could at any time sue to recover these, so that at the time of the first suit the mortgagee was entitled to realise the principal and interest. Therefore the crux of the matter is not whether the mortgagee is entitled to recover the principal at the time of the first suit but whether on the cause of action which gave rise to the first suit, the Plaintiff could have also claimed the principal; if he could not have claimed the principal on that cause of action, then the fact that it was open to him to sue to recover the principal at that date will not matter and in such a case the cause of action for the first suit will be distinct from the cause of action for the second suit. It was also there noticed that the interest was not recoverable by sale of the mortgaged property. That factor obtains in the present case too though, as I said, there is no express personal covenant for the payment of interest. However, the accepted position is that interest was recoverable personally from the Defendant and not from the mortgaged property and that has been done actually in the earlier suits.

In - Lalta Prasad Vs. Puran Lal, , the facts were almost similar to those of the present case. It was held that where under the terms of the mortgage the mortgagee is entitled to sue the mortgagor personally for the unpaid interest, and the mortgagee sues the mortgagor for such interest, praying for a personal decree, without seeking any relief against the mortgaged property, his subsequent suit for sale in enforcement of the mortgage will not be barred by Order 2, Rule 2, and there the two Privy Council decisions reported in - A IR 1922 PC 23 (A)'' and - AIR 1922 PC 412 (B)'' were distinguished. No doubt the decision in the Allahabad case proceeds on Order 34, Rule 14 and holds that by virtue there of Order 2, Rule 2 will not be a bar. Emphasis is laid on the mortgagees''s right to recover interest personally from the mortgagor and it is in that aspect of the question that Order 34, Rule 14 has been resorted to. This case is therefore an authority for the proposition that if the relief for interest was a personal one against the mortgagor then the cause of action for that relief is distinct from the cause of action in the suit to realise the principal and further interest from the mortgaged property.

Reference may also be made to - ''Swamy Rao v. Official Assignee of Madras AIR 1925 Mad 1120 (F), in which it -was held that where there was a provision in the mortgage deed for the payment of interest, different from that as to the payment of the principal, making two independent covenants and a personal covenant is made for the payment of interest and a decree is obtained, that will not prevent the subsequent suit being brought for the mortgage money, and Order 2, Rule 2 will have no application. This decision applies here on lines analogous to - AIR 1940 Lah 498 (D)''.

Lastly mention may be made of the decision of Judicial Commissioner of Vindhya Pradesh in - ''Bala Singh v. Gokuleshwar Singh AIR 1953 Vindh 31(G), where the learned Judge referred to some of these authorities, and on the facts of the case before him held that Order 2, Rule 2 did apply. The principle enunciated in the above said Privy Council decisions and the Lahore case has been accepted but it was found that there was only one covenant and not two separate covenants and that the cause of action for the two suits was not distinct.

Following the principle laid down in - AIR 1922 PC 412 (B)'', and the principle applied in AIR 1940 Lah 498(D)'' and - AIR 1925 Mad 1120(F)'', I hold that the present suit is not barred under Order 2, Rule 2 by reason of Small Cause Suit No. 54 of 1951. The learned Judge below was, therefore, right in holding that the causes of action for the two suits were distinct and that the Plaintiff was entitled to a decree for the subsequent suit.

Mr. Hathi for the Plaintiff has urged that Suit No. 54 of 1951 was for rent and not for interest. The plaint of that suit is not on the record and the decree which was passed by consent rather indicates that the suit was for interest. But even supposing that the claim was for rent, the relationship of landlord and tenant has not been established in any of the suits at any time previously. The mortgage deed too does not provide for recovering rent in advance every six months. What it provides for is the payment of interest in advance every six months and it is on that footing that the Plaintiff has acted all along till now. He is, therefore, precluded from now asserting that the previous suits were for rent and the cause of action for the same was distinct on that account. Mr. Hathi also contended that this being a decision in a Small Cause Suit the High Court should not interfere even if the trial Court''s decision on a point of law is erroneous. It is unnecessary to go into this contention, and I prefer to base my; decision on the point of law raised in this case, particularly since the matter has been argued aft length by both the sides.

In the result this application fails and is dismissed with costs.