Alagappa Chettiiar v. Subramania Pandia Thevan

1. In this case, defendants 1 and 2 executed a mortgage in favour of defendant 3 for Rs. 26,000. Part of the consideration was made up of Rs. 10,920 to be paid by the mortgagee to the assignor of the present plaintiff on two bonds. The mortgagee did not pay the Rs. 10,920, but nearly two years later paid the interest due on the plaint bond up to that date and made no further payment on the plaint bond. The words on the mortgage are: “The sum received by us in the matter of our having given you permission to pay off the said bonds and obtain the return of the same is Rs. 10,920.” The Subordinate Judge was of opinion that the mortgagee was not an agent authorized to make any payment for the mortgagors because in his opinion it was optional for him to do so. Even if it was optional and not obligatory still he would nonetheless be authorized to pay.

2. The question, however, arises whether nearly two years after the date of the mortgage he was authorized to pay the interest on the bond up to that date so as to keep alive the mortgagor's liability to their creditor. We think that though the mortgagee had authority to pay off the debt in full, he had no authority to make a pure payment of interest as such, so as to bring the case within Section 20 of the Lim. Act. We think that in this case, as in Linsell v. Bonser(1), the agent exceeded his authority. This appeal is dismissed with costs.

S.N/R.K

3. Appeal dismissed.