SHANKAR SARUP Vs. MEJO MAL
LAWS(PVC)-1901-5-20
PRIVY COUNCIL
Decided on May 16,1901

Shankar Sarup Appellant
VERSUS
Mejo Mal Respondents

JUDGEMENT

ROBERTSON, J. - (1.) THE competition between the appellants and the present respondents, who are the legal representatives of the original respondent Lala Phul Chand, deceased, is for moneys realized by the judicial sale of certain villages, and paid over under judicial warrant to Lala Phul Chand. The villages were ordered to be sold in execution of certain decrees, of which one was held by Lala Phul Chand and two by the appellants. Those decrees proceeded upon mortgages, and the question on the merits of the suit is which of the parties had the preferable security.
(2.) THE three bonds giving rise to the dispute were all validly granted and will now be stated in chronological order, without reference to any distinctive particulars irrelevant to the present controversy. On May 4, 1883, the villages (to the extent of certain shares also dealt with in the other two bonds) were hypothecated in favour of the appellants for Rs. 15,500. On June 30, 1883, a bond of hypothecation of the same property was executed in favour of Lala Phul Chand for Rs. 7000. On November 3, 1883, a bond of hypothecation of the same property was executed in favour of persons now represented in interest by the appellants for Rs. 20,000. The terms of this bond require further statement. It begins by declaring that Rs. 15,500 are due on account of the bond of May 4, 1883, in which the mortgagor's right was hypothecated. Then it sets out that interest is due and that other debts have been incurred, bringing out a total indebtedness of Rs. 20,000; and until repayment of all this money the borrower hypothecates what had been hypothecated in the bond for Rs. 15,500. In addition to the above, he hypothecated certain other shares in the same villages. The interest under this new bond was to be 14 annas per cent, per mensem (the interest under the bond of May having been 12 annas). In 1885 the appellants obtained decrees for the amount of the debt under the bond of November, 1883, and for enforcement of the hypothecation by sale. (Two decrees were taken, and not one only, merely because the amount of the bond was payable in moieties, but the appellants having come to be in right of both moieties this introduces none but an apparent complication.) As the respondents' contention on the merits depends mainly on these proceedings, it is necessary to point out that in their plaints the appellants sued on the bond of November, 1883, alone, and not on the bond of May, 1883; and this was the tenor of the decrees obtained on those plaints, and also of the orders for execution which followed in due course. Meantime Lala Phul Chand had sued on his bond; and the claims of both parties, as well as those of other creditors, having matured, an order was made for sale and the sale took place. The sequel of those judicial proceedings was the distribution of the price; and in carrying this out, as well as what had preceded, the Subordinate Judge of Meerut was acting under the Civil Procedure Code, 1877, and particularly Section 295. On February 7, 1888, an order was made for distribution of the price, and in it the judge held that Lala Phul Chand was entitled to be paid in preference to the appellants, on the ground that in their decrees the appellants' rights were rested solely on the bond of November, 1883, and not to any extent on the bond of May, 1883, and accordingly that their rights were inferior to that of Lala Phul Chand under his bond of June, 1883. The money was accordingly paid over to Lala Phul Chand.
(3.) THE appellants thereafter, on February 4, 1891, filed the present petition of plaint, the remedy sought being that Lala Phul Chand should be ordered to return to the appellants the proceeds of the sale on the ground of the priority of the hypothecation in their favour made in May, 1883. The answer of the respondents is, first, that the suit is time barred under Article 13 of the Limitation Act, the suit not having been brought within one year of the order for distribution made by the Subordinate Judge on February 7, 1888; and, second," that the appellants had lost their right to found on the bond of May, 1883, as conferring on them a priority over Lala Phul Chand's bond of June, 1883. The Subordinate Judge of Meerut held the suit to be barred, and by decree sealed on August 3, 1891, he dismissed it. On June 27, 1893, this decree was set aside by the High Court of the North-West Provinces, and the case was remanded. The Subordinate Judge on April 16, 1895, gave to the appellants the decree sought for; but this decree was on July 9, 1897, set aside by the High Court, who dismissed the suit with costs in all Courts. Against this decision the present appeal has been brought.;


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