Mt. Rajbansi Kuer and Others vs Bishundeo Narayan Singh and Others

Jwala Prasad, J.—This is an appeal by the defendants. The plaintiffs'' ancestors had executed a zerpeshgi deed for Rs. 45,499 in favour of Raja Sidheshwari Prasad Narayan Singh and Raja Gunjeshwari Prasad Narayan Singh in respect of certain villages on 31st August 1898. On the same date they also executed a simple mortgage bond for Rs. 6,061 in favour of those two persons. On 13th May 1907, the plaintiffs'' ancestors executed a deed of sale in favour of the defendants selling 5 annas 4 pies share in village Parsa, one of the mortgaged properties. Out of the consideration money of that kabala Rs. 3,450 was kept with defendant 1 as amanat for the payment of zerpeshgi to Raja Sidheshwari Prasad Narayan Singh and Gunjeshwari Prasad Narayan Singh and the balance of the purchase money was paid to the landlords, the plaintiffs'' ancestors. This amanat money was not paid by the defendants to the mortgagees. The mortgages then brought a Suit No. 160 of 1912 for recovery of the zerpeshgi money as well as the money due under the simple mortgage bond referred to above.

On 14th January 1914, a preliminary decree was passed in their favour for Rs. 66,330. On 11th June 1917, the decree was made absolute and was put into execution. On 5th April 1921, the plaintiffs executed a deed of sale conveying half the property to one of the mortgagees decree-holders for Rs. 66,000 and the vendee decree-holder filed a petition of satisfaction of the entire decree on 14th April 1921. On an objection preferred by the other decree-holder the Court refused to enter satisfaction with regard to the whole of the decree and directed satisfaction to be entered into in respect of half the decretal amount and the execution to proceed with respect to the remaining half. The execution then proceeded for realization of half the decretal amount over Rs. 33,000 and the properties mortgaged were advertised for sale. One of those properties, as already observed, was Parsa which had been purchased in 1907 by defendants in the name of defendant 1. Defendant 1 was also impleaded as defendant in the mortgage suit and the execution proceedings, and upon her prayer it was ordered that 5 annas 4 pies of mauza Parsa would be sold last of all. On part payment that execution was ultimately dismissed. Further execution of the decree for realization of the amount due thereunder was started in 1924. In that case also upon the objection of defendant 1 the Court directed that village Parsa would be sold last of all the mortgaged properties. One of the two decree-holders, who had already purchased the mortgaged properties in 1921 from the plaintiffs, paid off the entire amount due under the decree on 3rd November 1926. Thus there arose no occasion to sell village Parsa and it was saved on account of the entire satisfaction of the mortgage decree as stated above. Defendant 1 did not pay Rs. 3,450 as part of the consideration money for the sale of village Parsa to her which was kept in deposit or amanat with her for payment of the prior zerpeshgidars Raja Sidheshwari Prasad Narayan Singh and Gunjeshwari Prasad Narayan Singh. The plaintiffs therefore bring the present suit for realization of the said amount of Rs. 3,450 principal with interest from the defendants upon the ground that the said money belongs to the plaintiffs as part of the consideration of the sale of village Parsa to the defendants and that it was kept with the defendants in order to pay off a part of the zerpeshgi of Raja Sidheshwari Prasad Narayan Singh and Gunjeshwari Prasad Narayan Singh of 1898 and that money was never paid and the said zerpeshgi and the mortgage debts of the aforesaid Raja were paid off on behalf of the plaintiffs.

The defendants of whom defendant 1 claims to be the sole vendee of Parsa resisted the plaintiffs'' claim on various grounds. We are not at all concerned at this stage with all those pleas taken by the defendants except the one based upon limitation.

Both the Courts below have decided against the defendants holding that the suit was not barred by limitation. Mr. Manuk on behalf of the appellants strenuously contended that the cause of action in this case arose on 13th May 1907, when the sale deed in respect of mauza Parsa was executed by the plaintiffs in favour of the defendants. His contention is that the aforesaid sum of Rs. 3,450, part of the consideration money of the sale of village Parsa was kept in deposit for immediate payment to the prior zerpeshgidars and the mortgagees and failure to pay it at once gave rise to a cause of action on the very date that the sale deed was executed. At the very outset I would say that this contention of Mr. Manuk has not appealed to me either on the abstract principle of law or in the circumstances of the case. A number of authorities have been cited on both sides. Mr. Manuk has solely relied upon the case of Raghubar Rai v. Jaij Raj [1912] 84 All. 429. The respondents have relied upon later decisions of that Court in Ram Dularai v. Hardivari Lal [1918] 40 All. 605, Sarju Misra v. Ghulavi Husain [1920] 63 I.C. 87 and Kedar Nath Vs. Har Govind, and also upon a case of the Madras High Court, Kaliyammal v. Kolandavela Goundar [1917] 38 I.C 188. The plaintiffs also urge that the view taken in Kumar Nath Bhattacharjee v. Nobo Kumar Bhattacharjee [1898] 26 Cal. 241 also supports their contention.

The decision in Raghubar Rai v. Jaij Raj [1912] 84 All. 429 does not apply to the facts of the present case, and their Lordships at p. 433 have made it clear that the point that arises in this case did not arise in that case. In that case the actual damage had not been sustained by the plaintiff when he brought his suit. That was a case where compensation was sought for breach of a covenant on account of an apprehended injury in future. Their Lordships say:

The point, that the debt on which actual damage was sustained gave the plaintiffs a second cause of action, does not arise inasmuch as the plaintiffs have not yet paid any money to the heirs of Sanehi Ram.

Thus, any general observation that might lead to a construction of the views of their Lordships that limitation for a suit for recovery of actual damages on account of breach of a covenant must be computed from the date of the contract, must be taken to be obiter dictum nor do I think that the observation of Bayley, J., in Battley v. Faulkner [1820] 3 B. Ald. 288 quoted by their Lordships in that case does in any way support the view of the law taken by their Lordships in that case. The later decisions of that very Court have not accepted the view taken in that case. The latest decision of that Court in Ram Ratan Lal Vs. Abdul Wahid Khan is on all fours with the present case. In that case, as in the present no time was fixed for payment of the money deposited with the defendants and therefore no opportunity ever arose for the performance of the obligation, and consequently there could be no breach until the person who had undertaken to pay was called upon to do so. The cause of action in such a case, as held in that case, does not arise until the demand is made and ignored, or when the person to whom the money is to be paid sues the person with whom the contract had been made and consequent loss and damage occur. The decision in the case of Raghubar Rai v. Jaij Raj [1912] 84 All. 429 was distinguished:

Reliance was placed upon a decision which is now of some years'' standing reported in Raghubar Rai v. Jaij Raj [1912] 84 All. 429. We doubt whether that case is a clear authority. The money in that case had not been paid and therefore (the question which has arisen in most of the subsequent cases did not arise. There seems to be a healthy and consistent current of authority in recent years that the statute runs from the time when loss is incurred or in other words when payment is made.

Thus the plaintiffs'' suit is not barred by limitation. The cause of action arose on 3rd November 1925, when the payment was made and the mortgage decree of the Rajas Sidheshwari Prasad Narayan Singh and Gunjeshwari Prasad Narayan Singh was satisfied. The present suit was instituted on 14th July 1927 and was well within time. In the circumstances of the present case no payment could be made by the defendants until the plaintiffs were ready to pay off the balance of the zarpeshgi and the mortgage money due under the mortgage bonds of 1898. By those bonds a number of properties were mortgaged. The amount of the zarpeshgi was Rs. 45,499 and the amount of the mortgage money was Rs. 6,061. Only one of those properties, namely village Parsa, was purchased by the defendants for a very small sum compared with the mortgage debt of the Rajas, namely Rs. 4,150. Out of this only Rs. 3,450 was kept in ''amanat'' with the defendants to pay off a very insignificant portion of the zarpeshgi debt. In the bond it was stipulated that the balance would be paid by the mortgagors and the properties "in their ijara" would be released. The mortgagors did not pay the zarpeshgi debt. The zarpeshgidars would not accept part payment of their debt. Therefore the defendants were not in a position to pay the ''amanat'' money which was kept in deposit and the only time when they could pay was at the time when the final adjustment was made in 1925 in the execution case when on behalf of the plaintiffs the entire zarpeshgi money was paid. The defendants should have at that stage paid their quota which was the plaintiffs'' money in their hands. In the case of Kaliyammal v. Kolandavela Goundar [1917] 38 I.C 188, it was observed with regard to a similar covenant that it was a covenant of indemnity and that apart from any principle of construction it is the wording of a particular document that must determine the decision in each case. Construing the document in question, namely the sale deed of 1907, executed by the plaintiffs'' ancestors in favour of the defendants, I have no hesitation in holding that the covenant in question was a covenant of indemnity. Such a covenant has been considered by their Lordships of the Privy Council in the case of Mt. Izzat un nissa Begum v. Kunwar Partab Singh [1900] 31 All. 583:

The contract of indemnity may be expressed or implied. If the purchaser covenants with the vendor to pay the incumbrances, it is still nothing more than a contract of indemnity. The purchaser takes the property subject to the burden attached to it.

The next point urged is as to the rate of interest allowed by the Courts below. The Courts below have allowed one per cent per mensem. There is no indication anywhere that any rate of interest was settled between the parties. Therefore the interest will be allowed in shape of damages at the rate of six per cent per annum. The decree of the Court below will therefore be modified.

The appeal is substantially dismissed and therefore the appellants should bear the costs of the respondents.

James, J.

I agree.