Raghunandan Singh vs Kishun Singh and others

Courtney-Terrell, C.J.—This is an appeal from the decision of the District Judge of Shahabad affirming a decision of the Munsif dismissing a suit for sale on a kistbandi mortgage bond. In view of the points, particularly the preliminary point, raised on behalf of the defendants-respondents to this appeal, the family of the borrower may be shortly described. One Bujur Rai had four sons, Kishun Rai, defendant 1, and three other sons named respectively, Charitar Rai, Bujhawan Rat and Gulzar Rai who are deceased. Charitar Rai left three sons, respectively, defendants 2 (Ramekbal), 3 and 4 and Gulzari Rai, left three sons, respectively, defendants 5, 6 and 7, Bhujawan had two sons who predeceased their father and Ramekbal since the institution of the appeal to this Court has died but no substitution has been made of his heirs and it is alleged that be left a son surviving him. The money was borrowed by Bhujawan on a simple mortgage bond providing for repayment by installments, the first instalment becoming duc on Joth 30, 1320 Fasli and the other 19 installments at yearly intervals from that date. No money, it has been found, has been paid upon the bond.

To deal first with the question of abatement which was argued on behalf of the defendants, it being contended that owing to the fact that Ramekbal died pending the appeal and there having been no substitution on the part of his heirs, the whole suit failed by abatement. Now in the plaint the suit is brought against Kishun Rai defendant 1, and para 2, of the plaint states that the other defendants were allowed into possession and occupation of the property left by Bhujawan Rai by mutual agreement, that is to say, the other defendants are sued not by reason of an allegation that they were interested in the equity of redemption of the mortgage but by reason of the fact that they were in possession and occupation, and it is perfectly clear that a person in possession and occupation and likely to resist a decree for sale is a proper but not a necessary party in a suit on a mortgage.

Now Ramekbai having died and his heirs not having been joined, the suit will abate against Ramekbai but will not abate against the other parties who are not interested in the equity of redemption, nor sued as having any joint (interest with defendant 1. This disposes of the preliminary objection to the appeal and I now approach the main question which we have to decide. The mortgage bond provided for the repayment of the principal sum by 20 installments, the first, as I have said, becoming due on joth 30, 1320 Fasli, corresponding to May or June of 1913, and the clause in the bond in regard to the installments which has been translated for us is as follows:

If, God forbid, any one instalment be defaulted, the said Babu and his heirs have and shall have power to recover in a proper way the expired and unexpired installments in one lump with interest thereon at the rate of 1 per cent, per month by sale of the mortgaged properties specified below and from other properties and persons and assets of me and my heirs and representatives.

It has been found that no installments have been paid. The suit was begun on 11th August 1928, corresponding to Sawan 10. 1335, Fasli, that is to say more than 12 years from the date when the first instalment became due and the first default was made. It being a mortgage bond, it is clear and it is admitted that Art, 132 of the Limitation Act applies. It is the contention on behalf of the respondents to this appeal, and upon this contention they succeeded in the lower Courts, that the right to recover the whole amount of the mortgage money accrued when the first default was made and that the suit not having been brought within 12 years of that default, that is to say, when the money became due, it is barred by limitation, and a large number of cases have been cited which on the face of them have little, if anything, to do with the real merits of the case which must depend for its solution upon the construction of the bond in suit. The following cases were cited : Gaya Din v. Jhuman Lal, 1915 All 189 = 28 I C 910 = 37 All 400 (F B), Shib Dayal v. Meharban, 1923 All 1 = 69 I C 981 = 45 All 27, Umedmull Mangal Chand v. Maniram Agarwala, 1929 Cal 399, Ramsekhar Prasad Singh v. Mathura Lal 1925 Pat 557 = 90 I C 249 = 4 Pat 820, Narna v. Ammani Amma, 1917 Mad 951 = 35 I C 418 = 39 Mad 981, Muthiah Chettiar v. Vekatasubharayulu Naidu, 1926 Mad 160 = 90 I C 1033 = 42 Mad 403, Sitab Chand Nahar v. Hyder Malla, (1897) 24 Cal 281 = 1 I C W N 229, Ganpati Bala v. Bhikhu Sakharam 1930 Bom 297 = 125 I C 701, and Pancham v. Ansar Hussain, 1926 P C 85 = 99 I C 650 = 53 I A 187 = 48 All 457 (P C).

Now the meaning of the bond and the clauses which I have quoted is perfectly clear. It is a provision that if any one of the 20 installments shall fall due and remain unpaid, and of course, there shall not be a waiver by subsequent acceptance of money of later installments, the creditor shall thereupon have the right to sue firstly for such of the installments as have already fallen due and have not been paid and this part of the claim will be subject to the statute of limitation, that is to say, the plaintiff will not be allowed to recover such installments as have become time-barred, and further that the plaintiff is to have the right to recover the future installments which up to that date have not become due nor payable. The meaning of the bond therefore is perfectly simple. It is not that the same cause of action will arise in respect of each instalment as and when it becomes due and is unpaid but the cause of action in respect of any particular instalment is different from the cause of action in respect of any other installments : In each case what has to be considered is how much has fallen due and has not been paid and is not barred by limitation; and secondly how much remains to be paid even though uptil that moment the Installments have not fallen due. It is obvious that the answer to this question will be different in the case of every particular instalment.

The authorities cited may be simply summed up by stating that they fall into two classes, in one where the mortgagee has the right to recover the whole of the capital amount when any instalment of interest is overdue, in which case of course the period of limitation will date from the moment when that right to recover the whole of the bond money has fallen due the other class of cases is like the one that we have to deal with in the present appeal where the creditor is given a different right for each instalment in respect of which default may be made. He is entitled to take the most recent instalment as that which gives rise to the particular cause of action upon which he sues provided that that cause of action arose not more than 12 years before the institution of the suit under Art. 132. To my mind the case falls exactly within the class illustrated by the decision in Ramsekhar Prasad Singh v. Mathura Lal 1925 Pat 557 = 90 I C 249 = 4 Pat 820. This, aspect of the matter, that is to say, the proper construction of the bond in suit, does not seem to have been present in the minds of either of the tribunals below; and as against defendants 3 to 7 the decree is passed in their presence, they being sued merely as persons in possession. They might have, if they so wished, put in a separate defence and have stated that they were neither necessary nor proper parties to the suit and have contested it on their own account; they did not however choose to do so but made common cause with defendant 1 and raised the same points in defence. Accordingly, they having taken that attitude they must bear the burden of the decree and will be subject to all the liabilities which that decree may involve.

The plaintiffs made no claim for the first four installments under the bond on the allegation that they had received those installments. This, as has been found, was done by way of an attempt to overcome the argument they anticipated would be made against them, by way of waiver. Therefore there will be no decree in respect of the first four installments under the bond. The result is that the appeal is allowed; the defendants with the exception of defendant 2 roust pay the plaintiffs costs throughout. Interest at the bond rate will be payable up to the date of the decree of the High Court and after that interest at the rate of 6 per cent. per annum until the date of realisation.

Varma, J.

I agree.