Lachman Singh v. Kesri

Straight, J. and Tyrrell, J.:— The plaintiffs claimed Rs. 826-5-0, balance of principal, and Rs. 988-15-0, interest, borrowed on the 3rd February, 1871, by the ancestors of the defendants, who on that date executed a deed of mortgage or conditional sale-deed of their property in land in certain villages as security for the loan of Rs. 1,000. The material contents of the instrument are the following. “That the obligors are the exclusive proprietors in a zamindari share in mauzas Mahbubnagar and Thoman; that they now mortgage their said zamindari share to the obligees in consideration of Rs. 1,000 for the term of five years from the date of this deed, covenanting to pay the mortgage-money with interest at the rate of Re. 1-2-0 per centum per mensem, and thus redeem the mortgaged property; that such interest must be paid punctually yearly year; on any failure to pay the yearly interest in each year, or on failure of payment of the principal amount in one sum on the expiry of the period of five years, in either case the mortgagee shall be at liberty to sue for absolute proprietary right, and then the mortgage-money and interest due thereon will be deemed to be the sale-consideration, and the mortgage-deed to be a deed of absolute sale.” The mortgagors retained possession of the property under the express terms of the deed, but the deed for some undeclared reason was never registered. The plaintiffs, therefore, waive their claim on the property purporting to be hypothecated, and sue for the balance still due as a simple debt. The plaintiffs alleged payments by the defendants of Rs. 782-0-0 on the 15th May, 1873, and 3rd May, 1874. The defendants pleaded inter alia that they had paid the debt in full, having made their last payment on the 17th May, 1873. Looking to all the terms of the bond, it appears that it contains a personal covenant by the obligor for the payment of a debt as well as clauses hypothecating his immoveable property of more than Rs. 100 in value as security for such payment. It is true that these terms are not very artistically or unambiguously expressed. It was also covenanted and agreed that on failure by the mortgagor, who retained possession of the mortgaged property, to pay the yearly interest in any year for a period of five years, or on his failure to repay in one lump sum the principal mortgage-debt on the expiry of the term of five years, the mortgagor had the option to sue forthwith for proprietary possession of the property. In the event of his doing so the mortgage-consideration was to be treated as the sale-price of the property, the mortgage-deed becoming a deed of absolute sale. Thus the obligors made two distinct covenants; (a) that they would pay each year's interest punctually in each year, and the principal debt promptly on the expiry of five years from the date of execution of the deed; and (b) in the event of failure in these respects, the mortgagor might treat the transaction as one of conditional sale, and take proceedings of foreclosure on the property. It would appear that from an early stage in the mortgage period the parties lost sight of this remedy; for we have credits of payments of sums largely exceeding a year's interest, or even the accumulated interest of two consecutive years, allowed by the plaintiffs to the defendants' account in the third year of the mortgage period. Thus the deed of February 1871 is shown to involve a personal obligation of the obligors distinct and severable from the obligation in respect of the property, and the bond is, therefore, not withstanding its disabilities in regard to the registration law, admissible as evidence in support of a claim to enforce the money obligation. It would also in our judgment be admissible in proof of the fact that the debt was not exigible from the defendants until on and after the expiry of fire years from the date of the loan. In holding thus we follow the Full Bench ruling of this Court in Sheo Dial v. Prag Dat Misr .

It remains to consider whether the plaintiffs claim or any portion of it is within the limitation provided for the recovery of a simple money debt. This suit was instituted on the 18th January, 1879. It is obvious that three years from the date of the loan have long ago expired. Neither is the plaintiff helped by the provisions of art. 66 of the Limitation Act—“On a single bond where a day is specified for payment”—that day being here the 3rd February, 1876: for the plaintiff's claim is not based on a single bond, that is to say a bill, or written engagement for the payment of money, without a penalty. But it is contended that s. 20 of the Limitation Act saves the plaintiffs suit, part-payment of principal and interest having been made by the defendant before the expiration of the prescribed period for recovering the debt. But there is no proof of such payments in this case, nor even an allegation that in respect of part-payments of principal the fact of the payment appears in the handwriting of the person making such payment. The last payments according to the plaintiff's own case were made in May, 1874. The appeal fails, and is dismissed with costs. The objection on behalf of the respondents is not allowed.

Appeal dismissed.