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1913 DIGILAW 23 (SC)

BARHAMDEO PRASAD v. TARA CHAND

1913-12-01

AMEER ALI, LORD MOULTON, SIR JOHN EDGE

body1913
Judgement Appeal from a decree of the High Court (August 10, 1905) confirming a decree of the Subordinate Judge of Monghyr (June 9, 1902). The circumstances which led to the litigation were shortly as follows. On May 21, 1887, one Kalu Babu mortgaged Mauza Chak and other villages to the appellants. On September 19, 1887, he mortgaged Mauza Chak, with other properties, to the respondents and undertook to repay the mortgage in 1888. On July 19, 1889, he made a third mortgage of Mauza Chak, and other mauzas, in favour of the appellants. In 1890 the appellants filed a suit to enforce the mortgage of May 21, 1887, the respondents being made parties to the suit. On October 8, 1890, the appellants obtained a decree for sale of the mortgaged properties, including Mauza Chak. After payment of the moneys due upon the mortgage of May 21, 1887, there remained out of the sale proceeds a sum of Rs.12,197, which was left on deposit in the Court of the Subordinate Judge. The respondents, though parties to the suit, took no steps to assert their claim under the mortgage to them of September 19, 1887, in regard to these surplus sale proceeds. On January 14, 1891, the appellants obtained a decree on their mortgage of July 19, 1889, and on April 22, 1892, in satisfaction thereof they, with the permission of the Subordinate Judge, withdrew the above-mentioned sum of Rs.12,197. The respondents brought the present suit on November 19, 1900, claiming to recover the Rs.12,197 with interest on the ground that the sale proceeds stood in the place of the property mortgaged to them on September 19, 1887. The appellants (defendants) pleaded that the respondents had lost their lien owing to their negligence in not having taken proper steps to have the surplus sale proceeds applied to the satisfaction cf the debt due under the mortgage to them, and they also contended that the suit was barred by limitation. The Subordinate Judge on June 9, 1902, decided that the plaintiffs were entitled to the surplus proceeds of sale, but without interest. The appellants appealed to the High Court and the appeal was heard on February 28, 1905, by a Division Bench (Henderson and Geidt JJ.). The learned judges differed in opinion. The Subordinate Judge on June 9, 1902, decided that the plaintiffs were entitled to the surplus proceeds of sale, but without interest. The appellants appealed to the High Court and the appeal was heard on February 28, 1905, by a Division Bench (Henderson and Geidt JJ.). The learned judges differed in opinion. Henderson J. was of opinion that the suit was one to enforce payment of money charged upon immovable property and within art. 132 of Sched. II. of the Indian Limitation Act, 1877, and that the period of limitation was twelve years ; he also held that the appellants had acted fraudulently in withdrawing the money as they had done. He therefore found that the plaintiffs were entitled to recover. Geidt J. was of opinion that after the sale the plaintiffs lien was gone, and that when the appellants withdrew the money a fresh cause of action arose which was not within art. 132, but was barred by art. 120. The appeal was referred under s. 575 of the Code of Civil Pro cedure, 1882, to Sale J., who on August 10, 1905, delivered judgment agreeing with Henderson J. The appeal was thereupon dismissed. Ross, K.C., and Parikh, for the appellants. The suit falls within art. 120 of Sched. II. of the Limitation Act, 1877, as one for which no period for limitation is provided elsewhere in the schedule. The period of limitation was therefore six years and the suit was barred. The suit was not one " to enforce payment of money charged upon immoveable property," and art. 132 does not apply. At the date of the suit the respondents security upon the land had gone. The view taken by the majority in the High Court would have had great force if the respondents had applied in the suit in which the appellants obtained the second decree, and an order had been made declaring them entitled, upon their mortgage, to the sum in dispute. That, however, was not the case. The respondents remedy was under the Code of Civil Procedure, 1882, s. 295, and that remedy was barred by limitation. [Transfer of Property Act (IV. of 1882), ss. 85, 86, and 88 ; Code of Civil Procedure, 1882, s. 295 (c); and Ramdin v. Kalka Pershad (( 1884) L. R. 12 Ind. Ap. 12.) were referred to.] Eddis, for the respondents, was not called upon. [Transfer of Property Act (IV. of 1882), ss. 85, 86, and 88 ; Code of Civil Procedure, 1882, s. 295 (c); and Ramdin v. Kalka Pershad (( 1884) L. R. 12 Ind. Ap. 12.) were referred to.] Eddis, for the respondents, was not called upon. The judgment of their Lordships was delivered by SIR JOHN EDGE. This appeal has arisen in a suit which was brought by the plaintiffs on November 17, 1900, in the Court of the Subordinate Judge of Monghyr, to enforce payment of principal moneys and interest which were charged upon immov able property by a deed dated September 19, 1887, by which one Kalu Babu mortgaged to the plaintiffs Mauza Chak and other properties. The mortgage money was repayable on November 18, 1888. By the suit, so far as it concerned the defendants Barhamdeo Prasad and Ram Sumiran Prasad, the plaintiffs sought a decree against them for Rs.12,197, together with interest, on the ground that they were in possession of a sum of Rs.12,197 which had been deposited in the Court of the Subordinate Judge of Monghyr and was the balance remaining over of the purchase-money of Mauza Chak, after satisfying a decree for sale of that mauza of October 8, 1890, such possession having been obtained by them wrongfully with full knowledge that it was affected with a charge to the plaintiffs under a mortgage of Mauza Chak. Barhamdeo Prasad, now dead, is represented in this appeal by his brother, Ram Sumiran Prasad. The only question in this appeal is whether the suit, so far as it related to Barhamdeo Prasad and Ram Sumiran Prasad, was a suit to enforce payment of money charged upon immovable property within the meaning of art. 132 of Sched. II. of the Indian Limitation Act, 1877, or was a suit to which art. 120 of that schedule applied. The facts, briefly stated, are as follows On May 21, 1887, Kalu Babu mortgaged Mauza Chak and other properties to Barhamdeo Prasad and Ram Sumiran Prasad. On September 19, 1887, Kalu Babu mortgaged Mauza Chak and other properties to the plaintiffs, and on July 19, 1889, Kalu Babu further mortgaged Mauza Chak to Barhamdeo Prasad and Ram Sumiran Prasad. On October 8, 1890, Barhamdeo Prasad and Ram Sumiran Prasad obtained a decree for sale on their mortgage of May 21, 1887. On September 19, 1887, Kalu Babu mortgaged Mauza Chak and other properties to the plaintiffs, and on July 19, 1889, Kalu Babu further mortgaged Mauza Chak to Barhamdeo Prasad and Ram Sumiran Prasad. On October 8, 1890, Barhamdeo Prasad and Ram Sumiran Prasad obtained a decree for sale on their mortgage of May 21, 1887. To the suit in which that decree was obtained the plaintiffs in this suit were made parties, but they did not appear. In execution of the decree of October 8, 1890, Mauza Chak was sold. After satisfying that decree a balance amounting to Rs.12,197 of the moneys which were realized by the sale of Mauza Chak remained, and that balance was deposited in the Court of the Subordinate Judge of Monghyr. On January 14, 1891, Barhamdeo Prasad and Ram Sumiran Prasad obtained a decree for sale on their mortgage of July 19, 1889, and in execution of that decree they, on April 22, 1892, drew out of Court the balance of Rs.12,197 which had been deposited in Court. Barhamdeo Prasad and Ram Sumiran Prasad were well aware of the existence of the plaintiffs mortgage and that it had priority to the charge they were seeking to enforce, but they did not make the plaintiffs parties to the suit, nor did they give them notice that under the decree of January 14, 1891, they were drawing out of Court the balance of Rs.12,197. On behalf of Barhamdeo Prasad and Ram Sumiran Prasad it was contended in the Court of the Subordinate Judge that this suit, so far as it related to the claim of the plaintiffs against them in respect of the Rs.12,197, surplus moneys of the sale of Mauza Chak, was barred by limitation ; their contention on the point of limitation was that art. 120, and not art. 132, of Sched. II. of the Indian Limitation Act, 1877, applied to that claim. They also raised various other contentions in the Court of the Subordinate Judge to which it is not now necessary to refer. The Subordinate Judge held that the surplus sale proceeds of Mauza Chak were part of the mortgage security to which the plaintiffs were entitled under their mortgage, and gave the plaintiffs a decree. From that decree of the Subordinate Judge Barhamdeo Prasad and Ram Sumiran Prasad appealed to the High Court at Calcutta. The Subordinate Judge held that the surplus sale proceeds of Mauza Chak were part of the mortgage security to which the plaintiffs were entitled under their mortgage, and gave the plaintiffs a decree. From that decree of the Subordinate Judge Barhamdeo Prasad and Ram Sumiran Prasad appealed to the High Court at Calcutta. In that appeal two learned judges, Henderson and Sale JJ., held that the surplus sale proceeds of Mauza Chak were a portion of the security to which the plaintiffs were entitled to look for satisfaction of their mortgage, and that they were entitled to follow that mortgage security in the hands of Barhamdeo Prasad and Sumiran Prasad. Henderson J. also suggested that Barhamdeo Prasad and Sumiran Prasad, having obtained possession of the surplus proceeds which had been deposited in Court with the knowledge that they were subject to the claim of the plaintiffs in priority to their own claim, and having abstained from giving notice of that suit to the plaintiffs, might be taken to hold the surplus proceeds under an implied trust for the plaintiffs. The High Court, holding that the suit was a suit to enforce a claim for money charged upon immovable property and had been brought within time, dismissed the appeal. From that decree of the High Court this appeal has been brought. Before this Board it was contended on behalf of the appellants that this suit, so far as it related to the appellants, was not a suit to enforce payment of money charged upon immovable property, and that it was a suit to which art. 120 of the Second Schedule of the Indian Limitation Act, 1877, applied, and consequently that the suit was not brought within time. It was also contended by one of the counsel for the appellants that as the Rs.12,197, surplus assets, had been received by Barhamdeo Prasad and Bam Sumiran Prasad, who were not entitled to receive such surplus assets, the case came within s. 295 of the Code of Civil Procedure, 1882, and the remedy of the plaintiffs by a suit under that section was barred by time. As to the last-mentioned contention, it is sufficient to say that the facts of this case shew that s. 295 of the Code of Civil Procedure, 1882, does not apply. As to the last-mentioned contention, it is sufficient to say that the facts of this case shew that s. 295 of the Code of Civil Procedure, 1882, does not apply. If Mauza Chak had not been sold under the decree for sale of October 8, 1890, it could not be suggested that the plaintiffs could not by suit, subject to the rights of the prior mortgagees, have enforced payment of the money charged upon that mauza by their mortgage of September 19, 1887. Mauza Chak was sold under the decree for sale of October 8, 1890, which Barhamdeo Prasad and Ram Sumiran Prasad had obtained on their prior mortgage, and the surplus moneys of that sale represented the security which the plaintiffs had under their mortgage of September 19, 1887, and did not cease to represent that security owing to the fact that Barhamdeo Prasad and Ram Sumiran Prasad had, wrongfully and in fraud of the plaintiffs, drawn them out of the Court in which they had been deposited. Their Lordships do not think that it is necessary to decide the point referred to in the judgment of Henderson J., namely, that under the circumstances of this case the money in the hands of the appellants was saddled with a charge in favour of the plaintiffs to the amount of their charge, but they do not wish to be understood to express dissent from that view. For the decision of this case, it suffices to say that in their Lordships’ opinion this is a suit to enforce payment of money charged upon immovable property within the meaning of art. 132 of Sched. II. of the Indian Limitation Act, 1877, and having been brought within twelve years from the time when the money sued for became due is within time. The appeal fails. Their Lordships will humbly advise His Majesty that this appeal should be dismissed. The appellants must pay the costs of the appeal.