The Judgment of the Court was as follows:—
These two appeals arise in connection with two mortgage suits. The mortgages were in the nature of instalment bonds and provided for repayment of the sums borrowed in annual instalments spread over a number of years, subject to a covenant that if there was default—a single default in one case and two consecutive defaults in the other—the mortgagee would be entitled to sue for enforcement of payment of the entire amounts then due. The mortgages were registered documents—one was executed on the 29th September, 1917 and the other on the 6th October, 1917. The period of repayment in the first case was from the Bengalee year 1324 to 1331 and in the other from 1324 to 1332. The last instalment according to the bonds would be due in one case in Falgoon, 1331, corresponding to March, 1925 and in the other in Falgoon, 1332, corresponding to March, 1926. If there was default in respect of either mortgage, the mortgagee became entitled to sue on the bond on the happening of such default, but he chose to wait and did not, in fact, institute the suits till the 28th September, 1929. Both the suits were decreed in the usual course, the preliminary decree being passed in one case on the 12th May, 1930 and in the other on the 19th August, 1931, while the dates of the final decrees were the 28th April, 1931 and the 5th October, 1931, respectively. The decrees were decrees for sale and in due course the mortgaged properties were brought to sale. The sale proceeds were, however, wholly inadequate to satisfy the dues under the mortgage decrees. There was an unsatisfied balance of over Rs. 6,000 in one case and of over Rs. 4,800 in the other, including interest. The decree-holder, accordingly, applied for a personal decree tin each case for recovery of the balance due, under the provisions of Or. 34, r. 6, C.P Code. The sole question in these two appeals is whether or not the balance was “legally recoverable” from the mortgagors within the meaning of this rule.
There is and can be no question that so far as the mortgage suits are concerned they were within time, the Article applicable being Art. 132 of the Indian Limitation Act. The fact that the mortgage bonds provided that the suit might be brought on the happening of a default would not make the mortgage money any the less due on the expiry of the period of repayment. Whatever doubt there might have been on this question, must now be taken to be set at rest by the decision of the Judicial Committee in the case of Lasa Din v. Gulab Kunwar . Nor is there any question that the application for a personal decree under Or. 34, r. 6, was within time, having been made within three years from the date of the sale, that being the date when the right to apply accrued within the meaning of Article. 181 of the Limitation Act. The sole question, as I have already stated, is whether or not the unsatisfied balance due under the mortgage decrees was legally recoverable. The test for determining whether or not the balance was legally recoverable is to see if the right to recover the mortgage debt from the mortgagor personally was barred by limitation at the date of the suit. Both the suits here were instituted on the 28th September, 1929 and the question, therefore, arises whether or not on this date the mortgagee had the right to recover a personal decree against the mortgagors.
Both the Courts below have decided against the mortgagee on this question and the reason which influenced their decision seems to be that the cause of action must be deemed to have accrued not at the end of the period of repayment stipulated for in each bond, but on the occurring of the default which gave rise to a right to sue for the entire amount. In other words, it was held by the learned Subordinate Judge and the learned District Judge that the cause of action accrued at the end of Falgoon, 1325, in the first case and at the end of Falgoon, 1327, in the other and as the suits were not instituted within six years from that date, the claim to a personal decree must be held to be barred.
In my opinion, the Courts below did not approach the question from the correct point of view. Whether the claim would be barred or not will depend upon the particular Article of the Limitation Act applicable. It is no use entering into a discussion as to when the cause of action for the suits arose, unless the date of accrual of cause of action is made the starting point for reckoning limitation under the appropriate Article. The material question, therefore, is to find out the proper Article. On the face of it, Art. 75 would appear to be quite apt. It refers to a suit “on a promissory note or bond payable by instalments, which provides that if default be made in payment of one or more instalments, the whole shall be due,” and the period of limitation is three years from “when the default is made unless where the payee or obligee waives the benefit of the provision and then when fresh default is made in respect of which there is no such waiver.” If this Article applies, it is evident that what we ought to take note of is the date of the “default,” and there is no question of the date of accrual of the cause of action. It may be, the two dates may coincide, but that is a different matter. Now, in the present case, on the dates which I have already stated, the suits were beyond three years from the date of even the last default, not to speak of the first, which entitled the mortgagee to sue for the whole amount and the Appellant does not contend that under this Article any part of his claim would be in time. It is argued, however, that having regard to the fact that the bonds were registered instruments, the proper Article applicable will be not Article 75 but Article 116, though no doubt in terms Article 75 seems to be the most appropriate one. Article 116 speaks of a suit “for compensation for the breach of a contract in writing registered” and provides for a limitation of six years to be reckoned from the date when the period of limitation would begin to run against a suit brought on a similar contract not registered. This takes us to the preceding Article which stands thus:
115. For compensation for breach of any contract, exprsus or implied, not in writing registered and not herein specially provided for.
(Three years).
When the contract is broken, or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs, or (where the breach is continuing) when it ceases.
The word “compensation” used in either of these Articles seems to be Somewhat inappropriate to apply to a claim on a bond like the one here, for which there is specific provision in another part of the schedule to the Limitation Act. But however that may be, the matter has now been settled by the Judicial Committee in the well-known case of Tricomdas Cooverji Bhoja v. Gopinath Jiu Thakur where it was expressly held by their Lordships that though there was a specific Article dealing with suits for arrears of rent, such suits would be governed by Article 116, if they were based on registered leases. In other words, the effect of their Lordships' decision is whether or hot, where the suits are based on contracts not in writing and registered, limitation would be governed by the specific Article which provides for such cases, there can be no doubt that where the contracts are in writing and registered, the proper Article to apply would be the one providing for a longer period, namely, Article 116. That was a case of a suit for arrears of rent, but it seems to me that by analogy it would be right to hold in the present case that the fact that the mortgage bonds in suit were registered documents would be sufficient to attract the operation of Article 116 rather than of Article 75. If that be so, it is obvious that the claim to a personal decree would not be barred at the date the suits were brought, inasmuch as it was within six years from the date of the alleged breach of the bond.
I am relieved in this case from considering whether in the view of the matter I have indicated, the claim would be within time in whole or only in part, and, if the latter, in respect of how much of it, because the Appellant for reasons best known to himself has not valued the appeal above Rs. 200 in one case and Rs. 300 in the other, so that even if I were to hold that the whole claim was within time he could not, in any event, recover more than the amount at which the appeals have been valued. The valuation is, in fact, below the amount of a single instalment payable under either bond.
The result is that these appeals are allowed. The judgments and decrees of the Courts below are set aside and the Appellant is held entitled to a personal decree against the mortgagors—Respondents—for the unsatisfied balance still due, limited to the amount at which the appeals have been valued. The Appellant will be entitled to his costs of the lower Courts from the Respondents. There will be no posts of hearing in this Court.
P.C