GAYA DIN Vs. JHUMMAN LAL

JUDGEMENT

(1.) The only question, in this appeal, is whether the plaintiffs claim, which is one to enforce payment of the amount due on a simple mortgage by sale of the mortgaged property, is barred by limitation. The mortgage bond is dated the 16th of July, 1890, and the time fixed for repayment is ten years. Except for another provision in the bond, to which I shall presently refer, the amount secured by it was repayable on the 16th July, 1900, and as the present suit was instituted on the 12th June, 1912, it would be within time under Article 132 Schedule I to the Limitation Act, which has been held by their Lordships of the Privy Council to be applicable to a suit of this kind. The defendants, however, rely on the following provision of the bond and urge that the amount of the mortgage became due when default was made in the payment of the first instalment and as more than twelve years have elapsed since the date of default the claim is time-barred. The provision is this : "We shall pay Rs. 625 yearly and we shall pay the interest on the said amount monthly at the rate of 8 annas per month. If we fail to pay the interest aforesaid in any month, or the principal by the end of the stipulated period, as specified above, or no payment is made in a year, the mortgagee shall, under all these circumstances, be at liberty to realize the entire amount with the interest aforesaid in a lump sum, through court, by means of a suit, from the mortgaged and other moveable and immoveable property and the persons of us the executants." Had this clause stood alone it might perhaps be said, on the authority of the English and other cases cited on behalf of the respondents, that the plaintiffs were bound to sue when default was first made in the payment of the instalment fixed in the bond. The document, however, goes on to provide that "if the mortgagees in order to get interest, do not bring a suit in default of payment of any instalment and we be unable to pay the money, the interest should continue up to the stipulated period of ten years and also after it up to date of realization." This clause, in my opinion, means that the mortgagee is competent to wait for the full period of ten years stipulated in the bond and it is not obligatory on him to call in the money on the occurrence of a default in the payment of the instalments. The bond, in its earlier provisions, made the mortgaged property security both for principal and interest and this clause would be wholly unnecessary and redundant if the meaning of it was only to make the property security for interest or to provide for payment of interest. It says nothing about the security and it, in my opinion, clearly intends that the mortgagee might, if he so chose wait for the full term of ten years and if he did so, interest Would run till date of actual payment. This provision in the bond gives full power to the mortgagee not to enforce his right to claim the entire amount of the mortgage on the happening of a default but to wait till the expiry of the stipulated period often years. It is true that under Article 132 time begins to run from the date when the money becomes due, but that date depends upon the terms of each document, and a true construction of those terms. In my judgement, in view of the clause in the bond in suit to which I have referred, the money secured by the bond did not become due until the expiration of ten years from the date of the bond. Where, under the terms of the document, the creditor is authorized to wait for the full period stipulated for repayment, the money cannot be held to have become due, within the meaning of Article 132, until the expiry of that period. The first clause, as to payment of the whole amount on the occurrence of a default, was clearly inserted in the document for the benefit of the creditor and as he was expressly authorized not to take advantage of the clause, I am unable to hold that he was bound to sue when default was made. Any other view would, as observed in Maharaja of Benares v. Nand Ram (1907) I.L.R. 29 All. 431 be "very unfortunate." "It would be to punish a creditor for forbearance shown to his debtor, and compel him to press his demands at the earliest opportunity and insist upon speedy and full satisfaction of his claim." The question in that case was of the applicability of article 75 which of course does not govern this case, but the principle of the ruling applies. A similar view was held by Edge, C.J., and Blair, J., in Shankar Prasad v. Jalpa Prasad (1894) I.L.R. 16 All. 371, which was a case of execution of a decree. The decree in that case provided that the amount of it should be paid by eight instalments and that in case of default and non-payment of any instalment the plaintiff had power to realize in one lump sum the entire decretal money payable up to that time by executing the decree. It was held, upon a construction of the decree, that "the decree-holder, on the happening of any default, might, if he wished, execute the decree for all the decretal money then unpaid, but that it was not the intention that on the happening of a default the decree-holder should be bound to execute the decree once and for all." In Juneswar Das v. Mahabeer Singh (1875) I.L.R. 1 Calc. 163 their Lordships of the Privy Council expressed a similar opinion. That was a suit to recover the amount of a hypothecation bond in which the borrower engaged to repay the amount with interest on a day named, with a condition that in the event of the hypothecated lands being sold in execution of a decree before the day fixed for repayment, the lender should be at liberty at once to sue for the recovery of the debt. It was contended that the plaintiff s cause of action arose on the 18th May, 1865, when the lands pledged were sold in execution and that the suit having been brought after six years from that date was time-barred. With reference to this contention their Lordships observed : Their Lordships must not be supposed, in coming to this decision, to give any countenance to the argument of Mr. Arathoon that this suit would have been barred if the limitation of six years under Clause 16 had been applicable to it. They think upon the construction of this bond there would be good reason for holding that the cause of action arose within six years of the commencement of the suit." Their Lordships thus held that limitation would begin to run from the date fixed for payment and that the cause of action arose, that is to say, the money became due, on that date and not on the date on which the hypothecated property was sold in execution. It is true that their Lordships said that it was not necessary to decide the point in the view which they took of the period of limitation applicable to the case before them but an expression of opinion by their Lordships is entitled to the greatest weight and ought to guide the courts in this country. Considerable reliance Was placed on behalf of the respondents on the cases of Shitab Chand Nahar v. Hyder Malla (1896) I.L.R. 24 Calc. 281 and Perumal Ayyan v. Alagirisami Bhagavathar (1896) I.L.R. 20 Mad. 245. In neither of those cases was there a clause, in the bond, similar to the one in this case, which expressly empowered the creditor to wait for the full term of the mortgage. Those cases, therefore, are in my opinion no authority on the question before us. The decision of that question depends upon the true construction of the terms of the bond and the intention of the parties as gathered from the bond. I am of opinion that upon a true construction of the bond in this case the money secured by it became due on the expiration of ten years from the date of the bond and that the claim is not barred by limitation. I would allow the appeal, sot aside the decree of the court below and remand the case to that court for trial on the merits. Richards, C.J.

(2.) This appeal arises out of a suit to enforce payment of a sum of Rs. 10,000, principal and interest, alleged to be due on foot of a mortgage, dated the 16th July, 1890, by sale of the mortgaged property. The mortgage-deed provided that the mortgagors should pay the principal amount secured in ten years by instalments of Rs. 625 yearly and that the interest should be paid monthly. There was this further clause : "If we fail to pay the interest aforesaid in any month or the principal by the stipulated period, as specified above, or no payment is made in a year, the mortgagee shall, under all these circumstances, be at liberty to realize; the entire amount with the interest aforesaid in a lump sum through court by means of a suit from the mortgaged and other moveable and immoveable property and the person of us the executants." Later on the deed has a provision which has been translated as follows : "If the mortgages, in order to get interest, does not bring a suit in default of any instalment and we are unable to pay the money, the interest should continue up to the stipulated period of ton years and after it [up to the date of realization." This last clause seems to me simply to mean that the mortgaged property should remain and be security for the interest, even if no suit was brought to enforce the monthly payment. No payment was ever made upon foot of either principal or interest up to the date of the institution of the present suit on the 12th June, 1912.

(3.) The court below has dismissed the plaintiff s suit, holding that the claim is barred by limitation. The plaintiffs have appealed.