Dawson Miller, C.J.@mdashThis is an appeal on behalf of Nand Lal Mukhtar, the first defendant in the suit, against a decision of the Officiating District Judge of Shahabad affirming a decree of the Subordinate Judge of Arrah.
2. The suit out of which the appeal arises was instituted before the Subordinate Judge in 1918 to enforce a mortgage of a 4-pies share in mauzas Dharauli and Gosainpur, which villages together constituted mahal Dharauli, executed by Rajaram Singh in favour of Jasodanand Singh in the year 1891 to secure a loan of Rs. 1,900 together with interest, advanced by the mortgagee.
3. The plaintiffs are the sons and other members of the family of Jasodanand, the mortgagee, who died before the suit was instituted. They are joint in estate and now represent the interest of Jasodanand. The defendants, who are also members of a joint family, are successors-in-interest of Rajaram, the mortgagor, by purchase. The mortgaged property, by reason of a Collectorate partition effected in the year 1917, is now represented by the new estate then formed and entered in the roll of the Collector of Arrah under tauzi No. 11674, and it is against that estate that the plaintiffs seek to enforce their mortgage under the provisions of Section 99 of the Estates Partition Act of 1897.
4. The defendants in their pleadings raised several pleas in defence to the suit. Some of these were subsequently abandoned and four issues were eventually framed for decision at the trial as follows:
(1) Whether the plaintiffs are entitled to get a mortgage decree or a simple money decree against the defendants?
(2) Is the suit bad for defect of parties?
(3) Is the plaintiffs'' suit barred by limitation?
(4) What reliefs, if any, are the plaintiffs entitled to?
5. The Subordinate Judge decided all the issues in favour of the plaintiffs and granted them a mortgage-decree for sale of the property if the decretal amount should not be paid within six months.
6. The defendants appealed to the District Judge who dismissed the appeal with costs and affirmed the decision of the Trial Court. From that decision the defendant No. 1 has appealed to this Court. The appellant contends, (1) that the instrument relied on as a mortgage created no valid mortgage over the property, and (2) that the suit is barred by limitation. Other points were raised during the argument dealing with the right of the plaintiffs to proceed against the substituted property but these were admitted to be without substance and were abandoned during the hearing.
7. The argument on the first point was the same as that urged before the District Judge in the lower Court, namely, that the deed created no present transfer of an interest in the mortgaged property at the time of execution but only a contingent interest which might not arise. The case of Madho Misser v. Sidh Binaik Upadhya (1887) 14 Cal. 687 was relied on in support of the argument.
8. Before considering the authority relied on, it will be convenient to refer to the terms of the deed. It is of a somewhat unusual description and appears to be designed to comprise the features both of a usufructuary and a simple mortgage. It is dated the 18th Falgun 1298 F. (February, 1891). It recites the mortgagor''s need for raising money and the receipt of a loan of Rs. 1,900 from the mortgagee bearing interest at the "usual rate" which is admitted to be one per cent. per mensem. The mortgagor then agrees to repay the principal sum and interest at the end of Jeyth of the current year, that is, about three months later when the next agricultural year begins. It then proceeds "should the aforesaid due date expire, I shall pay the interest for the period ending on the due date separately in exchange for the interest remaining on the principal, I give in writing and mortgage 4-pies (English) proprietary right inherited and purchased out of patti Cheharum out of 16 annas in mauza Dharauli, original with dependencies, appertaining to Mahal Dharauli; Pargana Bhojpur, proprietary interest with zirait rights together with sayer of mango and mahua trees, etc., etc., and all Zemindari rights in the mortgaged property. The said creditor shall enter upon possession of the mortgaged property from the agricultural year 1299 F. He may either cultivate the same as his zirait or settle it with tenants. He shall, after payment of the Government Revenue, Road Cess, Public Works cesses, etc., appropriate the profit and produce thereof in lieu of interest. He shall continue in possession of the mortgaged property until repayment of the principal amount as specified above. I shall neither claim mesne profits nor shall he claim interest. When I shall pay the principal in one lump sum at the end of Jeyth of any year I shall take back the mortgaged property and this deed. Until repayment of the principal, neither I nor my heirs shall, directly or indirectly, interfere with the mortgaged property." So far the instrument creates a usufructuary mortgage only. It then proceeds as follows:--"If perchance he be thrown out of possession in any way, I also give in writing mortgage and hypothecate my property viz., 4-pies share proprietary interest in mauza Gosainpur and 4-pies share in mauza Dharauli in lieu of the principal and the produce and I do declare that until repayment of the money I shall not execute any deed of sale, hiba, Bakshishsnama or rekan, in favour of any one. Should I do so, the same shall be treated as null and void. Therefore I have executed this mortgage deed that it may be of use when required."
9. There can be little doubt as to the intention of the deed. The share in mauza Dharauli was to be mortgaged to secure payment of the interest accruing after H. Jeyth 1298 F. As to the interest for the short period between the 18th Falgun and the end of Jeyth 1298 F. the mortgagor''s liability was a personal one only and the property was not charged with that, nor is it claimed in the present suit. To secure the interest after that date the property was hypothecated and the mortgagee is to be put in possession and to appropriate the proceeds after paying the Government demands, and as long as he is in possession no interest is payable on the principal beyond the proceeds. In the second part of the deed the mortgagor hypothecates not only the share in mauza Dharauli but also the share in mauza Gosainpur, that is the whole of his 4-pies share in the Mahal, which was comprised of these two villages, to secure repayment of the principal as well as interest, or, as the deed put it, "in lieu of the principal and the produce" if the mortgagee should be dispossessed. The meaning of this clause appears to me to be that the property there mentioned is hypothecated to secure repayment of the principal together with interest in the event of the mortgagee being dispossessed and that the obligation to repay the principal shall only arise, if and when the mortgagee shall be dispossessed. There is a present charge to meet a future contingency. What happened was that the debt remained unpaid at the due date and the mortgagee was put in possession under the terms of the deed and remained in possession receiving the proceeds in lieu of interest up to the year 1906 when he was for a time dispossessed by Nand Lal, the defendant No. 1, who had in the meantime purchased the mortgagor''s interest in the mahal. Shortly afterwards, Nand Lal, by bringing about certain fraudulent and collusive certificate proceedings under the Public Demands Recovery Act, succeeded in bringing the plaintiffs'' interest also to sale and himself purchased it. The plaintiffs then instituted a suit, numbered 43 of 1907, against, Nand Lal and others to set aside the sale and recover possession. In that suit they were successful and recovered possession in 1908. In that suit, the validity of the mortgage as a mortgage was in issue and was decided in favour of the plaintiffs. The plaintiffs remained in possession until the year 1917. In that year there was a Collectorate partition of the mahal and the defendant''s 4-pies share, the subject of the plaintiff''s mortgage, was formed into a separate estate bearing tauzi No. 11674. After partition and the formation of the new estates out of the old mahal, the plaintiffs were deprived of their possession as the old mahal no longer existed. They consequently instituted the present suit against the substituted property allotted to Nand Lal as representing the old 4-pies share. It is no longer disputed that if the mortgage is a valid and subsisting instrument it is available against the substituted property.
10. The appellant contends that the case is governed by the decision in Madho Misser v. Sidh Binaik Upadhya (1887) 14 Cal. 687 . In the document in question in that case, no words of hypothecation appear. It begins with an acknowledgment by Sidh Binaik that he has borrowed Rs. 99 from Madho Misser and he undertakes to pay interest at a certain rate. It then stipulated that the borrower should pay the entire principal with interest in the following year, and if he did not do so he was to lose his right to a plot of land situated in mauza Kutha and the lender was to take possession of the land, after which no interest on the money was to be paid by the borrower. The Court held, without giving any detailed reasons, that the document in question was not a mortgage and indeed the point was not seriously pressed on behalf of the lender. The Court further held that the instrument did not create a present charge upon the property within the meaning of Section 100 of the Transfer of Property Act. The reason for the latter part of the decision was that the document did not, in the opinion of the Court, create an immediate charge but merely the possibility of a charge depending upon a future contingency. No doubt there is a difference between a charge within the meaning of Section 100 of the Transfer of Property Act and the mere possibility of a charge or a promise to create a charge in the future and the question for determination in that case was merely one of construction. The decision however has been criticised on more than one occasion in subsequent cases. See
11. In my opinion, the instrument in this case created a mortgage of the share in mauza Dharauli to secure by way of usufruct the interest on the loan and the subsequent possession of the mortgagee completed the transaction. It also created a simple mortgage of the share in both villages of the mahal to secure repayment of the principal sum advanced, including subsequent interest, if the mortgagee should be deprived of possession. It seems to me that this was a present hypothecation to secure a future liability to repay the mortgage-money if the mortgagee should be deprived of possession. Although the due date of repayment was the end of Jeyth 1298 IT. the charge created on the property to secure repayment of the principal sum could only be enforced in the event of the mortgagee being deprived of possession but, nevertheless, in my opinion, the property was hypothecated from the outset to secure repayment of the loan in the event which has in fact happened, and the mortgage is not bad upon the ground urged by the appellant. There is also, I think, another reason why the appellant cannot now question the validity of the mortgage bond. In the, suit to recover possession brought by the plaintiffs against Nand Lal in 1907, the decision partly turned upon the validity of the mortgage which was the basis of the plaintiffs'' title and which was challenged by the defendants in that suit. The plaintiff''s title under the mortgage as a valid and binding instrument was declared, and as between the same parties, the matter would appear now to be res judicata.
12. The second point relating to limitation can be shortly dealt with. Although the date of repayment of the mortgage-bond was Jeyth 1298 F. the right to enforce payment by sale of the security did not arise until dispossession which took place in 1917, the year before the suit was instituted. Up to that time, this right had not accrued and the only claim the mortgagees had against the property was the right to receive the usufruct in lieu of interest. The claim is, therefore, not barred by limitation. In my opinion the appeal should be dismissed with costs.
Kulwant Sahay, J.
13. I agree.
