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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • H. S. L. Polak
  • Hyam
Judges
  • Sir Lawrence Jenkins
  • Ameer Ali
  • Sir John Edge
  • Carson
  • Justice Buckmaster
Acts
  • rule 2, Order 2 of the Code of Civil Procedure.
  • provisions of rule 2, sub-section 1,
  • rule 2 of Order 2
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • H. S. L. Polak
  • Hyam
Judges
  • Sir Lawrence Jenkins
  • Ameer Ali
  • Sir John Edge
  • Carson
  • Justice Buckmaster
Acts
  • rule 2, Order 2 of the Code of Civil Procedure.
  • provisions of rule 2, sub-section 1,
  • rule 2 of Order 2
See more information ...
Smart Summary

Judicial Opinion Summary — Lord Buckmaster

Factual and Procedural Background

This appeal arises from a mortgage suit concerning a simple mortgage deed executed on 24 September 1910. The deed secured Rs. 14,000 principal and interest at "8 annas per cent per month" and contained several unusual provisions, including:

  • Clause 2: Interest was to be paid monthly and, if interest was unpaid for six months, the creditor could realise only the unpaid interest or the principal and interest together by bringing suit without waiting for the expiration of the fixed time mentioned in Clause 7; the mortgagors were to take no objection to such proceedings.
  • Clause 7: If the amount secured (principal and interest) was not paid after three years, the creditor could realise the whole by suit and the mortgagors should have no objection and any objection would be regarded as false.

After three years passed and no interest was paid, in April 1914 the mortgagee elected to sue only for the unpaid interest (Rs. 3,010). The plaint and court fees were limited to that relief. On 11 August 1914 the trial judge made a decree which, contrary to the plaint and the relief sought, declared the amount due for principal, interest and costs to be Rs. 3,270-12-0 and provided for redemption and sale provisions that effectively would have allowed full redemption by payment of interest and costs alone. That decree was inconsistent with the relief actually claimed (interest only) and with the mortgage's terms (principal of Rs. 14,000 remained outstanding).

Apparently money was paid into court under that decree but the mortgagor did not ask for re-transfer, leaving the property apparently still subject to the mortgage. The representatives of the mortgagee (the original mortgagee having died) instituted fresh proceedings on 23 January 1915 seeking realisation of the security for principal and accrued interest, less amounts already provided for by the earlier proceedings. In that subsequent suit the defendants objected that the plaintiffs were barred by rule 2 of Order 2 of the Code of Civil Procedure. The trial judge allowed the plaintiffs' suit, but the High Court reversed and entered judgment for the defendant. The present appeal to the Board followed.

Legal Issues Presented

  1. Whether rule 2 of Order 2 of the Code of Civil Procedure ("Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action...") bars the plaintiffs (mortgagees) from prosecuting the subsequent suit for realisation of the principal and accrued interest after they had previously sued only for unpaid interest.
  2. What constituted the "cause of action" in the original proceedings: the unpaid interest alone, or the unpaid interest and principal (by reason of the three-year clause), and whether that original cause of action permitted the mortgagees to abstain from claiming the larger relief and later sue for the remainder.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mt. Chand Kour v. Partab Singh, (1888) 16 Cal. 98; 15 IA 156; 5 Sar 243 (PC) Distinguishing two suits based on different causes and reliefs — an injunction to prevent a sale (intention) versus restoration after sale (act done). Used to show that where the cause of action and relief differ materially between proceedings, the rule may not apply; the court found that case distinguishable but supportive of the proposition that "cause of action" must be properly identified.
Rajah of Pittapur v. Sri Rajah Venkata Mahipatisurya, (1885) 8 Mad. 520; 12 IA 116; 4 Sar 38 (PC) Clarifies that "cause of action" means the cause of action for which the suit is brought and does not mean every cause of action a plaintiff may have. Cited to support the interpretation that a plaintiff cannot later bring independent proceedings to recover the balance of a claim if the original cause of action enabled a larger recovery than was claimed initially.
Yasvant v. Vithal, (1897) 21 Bom. 267 Illustrates that causes of action and remedies may be distinct and how that distinction affects whether multiple suits are permissible. Invoked as an illustration of the view that where the cause and remedies are distinct the rule may operate differently; the Board relied on it in reasoning about cause and remedy distinctions but nonetheless concluded rule 2 applied here.

Court's Reasoning and Analysis

The Board began by identifying the precise statutory provision at issue: rule 2 of Order 2 of the Code of Civil Procedure (sub-section 1), which provides that "Every 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 any portion of his claim in order to bring the suit within the jurisdiction of any Court."

The critical legal and factual inquiry was to determine what the plaintiffs' "cause of action" was when they first sued in April 1914. The Board observed two possible bases given the deed's terms: (a) non-payment of interest for six months (entitling the mortgagee to sue in respect of unpaid interest alone or for principal and interest), or (b) expiration of three years with non-payment (entitling suit for principal and interest). In either event, the remedy available and the relief which could be sought was realisation of the mortgage security.

The Board emphasized that the mortgage was a simple mortgage "containing no express covenant for the payment of the principal and the interest," so the available relief in both situations was limited to realisation of the security (i.e., enforcement of the mortgage), not a separate personal covenant action.

Applying the statutory language, the Board concluded that the first suit — though the plaintiffs elected to seek only interest (Rs. 3,010) — arose from a cause of action that also authorized a claim for the larger sum (principal plus interest) available under the deed. Because the plaintiffs had an initial cause of action that enabled broader relief, and they deliberately limited the claim in that proceeding, rule 2 precluded their subsequently instituting a separate suit to recover the remainder.

To support the textual and purposive reading of "cause of action," the Board considered authorities cited by counsel. It treated Mt. Chand Kour v. Partab Singh as distinguishable on the facts (different causes and remedies where one suit sought injunction against an intended act and the other sought restoration after the act). Rajah of Pittapur was cited for the proposition that "cause of action" means the cause which gives occasion to and forms the foundation of the suit — it does not require that every cause of action be included in every suit. Yasvant v. Vithal was referenced as an illustration that causes and remedies can be distinct. The Board concluded these authorities supported the interpretation that where the initial cause of action enabled a plaintiff to claim wider relief, the plaintiff cannot later pursue the balance by independent proceedings.

The Board noted the practical injustice that might befall the plaintiffs — the risk of losing principal of Rs. 14,000 because of the earlier proceedings and possibly a mistaken decree — but declined to "stretch or strain" the language of rule 2 to avoid the statutory bar. The Board also remarked it would not express an opinion as to whether, under Indian law, some other remedy might be available to correct the possibly mistaken decree of 11 August 1914; it left open the possibility that relief might be sought consistent with established practice.

Holding and Implications

Holding: Appeal dismissed.

Implications and direct effects:

  • The Board held that rule 2 of Order 2 of the Code of Civil Procedure covers the present dispute. Because the plaintiffs had, in the first suit, a cause of action that enabled them to claim the larger relief (principal and interest) but elected to sue only for interest, they were barred by that rule from bringing a subsequent independent suit to recover the remainder.
  • The immediate consequence is that the High Court's reversal (entering judgment for the defendant on the ground of the bar) is upheld by the Board and the appeal is dismissed.
  • The opinion acknowledges the possibility that the plaintiffs may have suffered substantial loss due to the earlier decree that did not reflect the relief actually claimed; the Board, however, did not itself order any remedy and expressly refrained from pronouncing on whether any other remedy under Indian law might be available to correct the earlier decree.
  • No new substantive precedent beyond the application of rule 2 to these facts is created by the opinion; the Board relied on established authorities to construe the statutory provision.

Counsel: The Board had the advantage of "the full and able argument of Mr. Hyam"; counsel for the respondents was not heard.

Show full summary ...

    Muhammad Hafiz And Another, Plffs. v. Mirza Muhammad Zakariya And Others

    Lord Buckmaster. -

    In this appeal their Lordships have not had the advantage of hearing counsel for the respondents, but owing to the full and able argument of Mr. Hyam they have been placed in complete possession of the facts.

    The appeal arises out of a mortgage suit. The appellants and the second, third and fourth respondents represent together the mortgagee. The first respondent was himself one of the mortgagors and represents the other. The mortgage deed in question was executed on the 24th September, 1910, and was a simple mortgage but it took an unusual form. It created security for the repayment to the mortgagees of Rs. 14,000 principal and interest at the rate of 8 annas per cent per month. It then provided by Clause 2 that the interest should be paid on the bond as each month went by and that if the interest was not paid for six months, the creditor should be competent to realise only the unpaid amount of interest due to him, or the amount of principal and interest both by bringing a suit in court without waiting for the expiration of the time fixed and that the mortgagors should take no objection to such proceedings. The time fixed was that mentioned in Clause 7, which 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, together with other incidental expenses, and again the clause concluded by providing that the mortgagors should have no objection, and if they took objection to such proceedings, it should be regarded as false.

    Three years elapsed after the deed had been executed and no interest was paid, with the result that in April, 1914, the mortgagee had the power, so far as the terras of the deed were concerned, either to bring an action for the purpose of realising the security in order to obtain repayment of the full principal money and the interest, or simply of the interest alone. He selected the course, and on the 16th April 1914, he instituted a suit which set out, with perfect fairness and clearness, the provisions of the bond and the fact that he had elected to propose the remedies that the bond gave him in respect only of the interest that was then due. The amount of that interest was Rs. 3,010 and in respect of that sum, and no more, he paid the court fees upon the plaint. The learned Judge before whom this suit was brought made a decree on the 11th August 1914 granting the relief that was claimed, but he appears to have overlooked the peculiar character of the mortgage for he made a decree which, upon the face of it was not the decree that the plaintiff had asked for, and certainly not the decree to which the defendants could, on any hypothesis, be entitled. What he did was this : he declared that the amount due to the mortgagee for principal, interest and costs was Rs. 3,270-12-0, a statement that the consideration of the plaint itself would have shown to be manifestly inaccurate, for it was perfectly plain from the proceedings that the amount of Rs. 3,010 was the amount claimed as due and this was for interest alone and did not include one single rupee in respect of the principal, which still remained at the sum of Rs. 14,000. He then provided that if the defendants paid into court the amount so declared to be due which was the amount of the interest and costs, on or before the 11th February, 1915 the mortgagees should deliver up the documents relating to the property, and if required, re-transfer it to the defendant free from the mortgage and from all incumbrances created by the mortgagees or any person claiming under them. Paragraph 2 of the decree proceeded upon the same footing, and provided that if the money was not paid in, there should be a sale, out of the money realised the claim for Rs. 3,270 should be satisfied, and after that the balance of the money in court should be paid out to the mortgagor.

    The result of this decree would have been that the mortgagor could have secured complete redemption by payment of money which, by common consent, was nothing but interest on the sum that he owed and the costs. It is impossible to consider how it was that such a decree passed either the vigilance of the pleader who was appearing for the plaintiff or the consideration of the court for such a decree was not the decree asked for nor that which, in the circumstances, ought to have been made.

    Apparently the money was paid into court, but the mortgagor never asked for re-transfer of the property and the property, therefore, apparently remaining still subject to the mortgage, the representatives of the mortgagee who had died proceeded, on the 23rd January 1915, to institute the proceedings out of which this appeal has arisen, seeking relief similar to, but not the same as, that formerly claimed. It was stated that the amount due on the mortgage was the principal moneys and the interest that had accrued due, less the amount which had been provided by the proceedings formerly taken and they sought realisation of the security and consequential relief. To that suit objection was taken that it was not competent to the mortgagees by reason of rule 2, Order 2 of the Code of Civil Procedure. The learned Judge before whom the matter came, being obviously impressed by the injustice which would be done if effect was given to such a defence, decided in favour of the plaintiffs; but upon appeal to the High Court that judgment has been reversed and judgment entered for the defendant; from the judgment of the High Court the present appeal lies.

    Now the whole question depends upon considering whether the terms of rule 2 of Order 2 do really bar the plaintiffs from the relief that they seek, and no one would be anxious to stretch or strain the language of that rule in order to cover a case where, if it be made applicable, it is obvious that the plaintiffs may suffer a substantial wrong. The rule runs in these terms :-

    (1)

    "Every 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 any portion of his claim in order to bring the suit within the jurisdiction of any Court."

    There are other provisions of the Order to which reference need not be made, because, in their Lordships' opinion, the exact provisions of rule 2, sub-section 1, which has been read, covers and fits the present dispute. What was the cause of action that the plaintiffs possessed when the proceedings were first instituted? It was the cause of action due either to the fact that the interest had been unpaid for more than six months, or that the three years had elapsed, and the principal was also unpaid, and in either case they could have sued for realisation to provide for the whole amount secured by the deed.

    The plaintiffs now purported to proceed under Clause 2 of the deed, but even in that case the non-payment of the interest was the sole cause upon which they were entitled to ask either for the limited relief that was sought or the larger relief which they abstained from seeking. It is also important to point out that the only relief that could be sought in both cases was realisation of the mortgage security, for the mortgage was a simple mortgage containing no express covenant for the payment of the principal and the interest.

    Their Lordships think, therefore, that the rule covers the present dispute, and it is only necessary, in deference to the careful argument that is placed before the Board, to refer to one or two of the authorities to which the learned counsel called attention. The first was Mt. Chand Kour v. Partab Singh, (1888) 16 Cal, 98 : 15 IA 156 : 5 Sar 243 (PC) and that can be dealt with very simply. In that case what happened was that a Hindu widow having sold the whole of the estate, and a suit being instituted to set aside the sale, the proceedings were objected to upon the ground that before the sale was effected other proceedings were instituted to obtain an injunction to prevent the sale taking place. It was pointed out that the actual cause and circumstances which gave rise to the dispute were different in both cases because in the one all that could be alleged was an intention, and all the relief that could be sought was an injunction. In the other, the matter alleged was an act done and the relief sought was the restoration of the property that had been sold. In the case of Rajah of Pittapur v. Sri Rajah Venkata Mahipatisurya, (1885) 8 Mad, 520 : 12 IA, 116 : 4 Sar 38 (PC) it is said that the cause of action means the cause of action for which the suit is brought, and it does not say that every suit includes every cause of action. Their Lordships see no reason to attempt to qualify or to extend those words, because they are in fact nothing but a repetition of the exact words of the Code; the cause of action is the cause of action which gives occasion to and forms the foundation of the suit, and if that cause enables a man to ask for larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings. The case of Yasvant v. Vithal, (1897) 21 Bom, 267 really illustrates this view, for there the learned Judge held that both the causes of action and the remedies were distinct.

    Their Lordships, in expressing this opinion, have in mind the fact that owing possibly to faulty advice, or, it may be, to a misapprehension of their strict legal rights the plaintiffs are in hazard of losing Rs. 14,000 in respect of a transaction which, so far as can be seen, was a perfectly straightforward transaction effected at a reasonable rate of interest. Whether there be any means now, according to the law in India, of remedying what does appear to be a misapprehension underlying the decree that was made on the 11th August 1914, their Lordships are not prepared to say, but if such opportunity can be afforded consistently with the well-known rules establishing practice in India, their Lordships see no reason to doubt that it will receive considerate attention by the court before whom it is brought.

    Their Lordships will humbly advise His Majesty that the appeal be dismissed.

    Appeal dismissed.

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    Comments

    Muhammad Hafiz And Another, Plffs. v. Mirza Muhammad Zakariya And Others
    (Nov 17, 1921)