S. A. Ramiah Nadar v. Rajalakshmi Ammal — 1975 DIGILAW 123 (MAD)

Judgement JUDGMENT:-The defendants have filed this appeal. The plaintiffs filed the suit for recovery of a sum of Rs. 600 due on a mortgage deed dated 19-11-1951, which is Ex. A.1 in the case. It recites that the house property described in the schedule was usufructuarily mortgaged for a loan for discharging certain debts incurred in connection with the business. It gives a right to redeem the mortgage to the mortgagor on or before 30th Kartikai of next year which corresponds to 14-12-52. In default of such redemption on that date, it is agreed that the mortgagor will pay the amount whenever demanded and redeem or discharge the mortgage. 2. The present suit was filed on 19-7-1969. The defendants-appellants objected to the maintainability of the suit on the ground that it was barred by limitation under Art.62 of the Limitation Act, 1963. 3. The trial court accepted the objection of the defendants and dismissed the suit. On appeal the learned Subordinate Judge, following the decision in Vaithilinga Nadar v. Narayanaswami Ayyan, (1906) 16 Mad LJ 364 held the period of limitation would start running only from the date of demand, that in the present case the demand was on 25-7-1968, and that therefore the suit was within time. He distinguished the decision in 1968-2 Mad LJ 445 on the ground that it was inconsistent with the earlier Bench decision in Narayana Chattiar v. Rangaswami Naidu, 1968-2 Mad LJ 445. He therefore, passed a preliminary decree for the amount due and fixed the time for payment as three months. 4. In the present appeal the learned counsel for the appellant submitted that the Court below was wrong in proceeding as if the suit was within time, that the suit should have been filed either within the period of 12 years from 19-11-1951, when the mortgage deed was executed, or within the period of 12 years from 14-12-1952, the date fixed for redemption and that as the suit had been filed much later than the period of 12 years from either of these two dates, it was barred by limitation under Art.62 of the Limitation Act. The learned counsel for the respondents supported the decision of the Learned Subordinate Judge on the ground that the decision in 16 Mad LJ 364 was rightly applied. 5. The learned counsel for the respondents supported the decision of the Learned Subordinate Judge on the ground that the decision in 16 Mad LJ 364 was rightly applied. 5. Article 62 of the Limitation Act deals with suits to enforce payment of money secured by mortgage or otherwise charged upon immovable property. The period of limitation is 12 years from the date when the money sued for became due. I have thus, first to see, as to when the money sued for became due. If the demand made by the mortgagee is to be the starting point of limitation, then certainly the suit would be within time. It is on this aspect that I have to consider the decisions brought to my notice. 6. In Vaithilinga Nadar v. Narayanswami Ayyan, 16 Mad LJ 364, a Bench of this court was concerned with the construction of the words `on demand'. That was a case of mortgage document dated 15-9-1878, providing for payment of interest on the 15th of September each year and payment of the principal on the fifth year. If the amount was not paid then, the mortgagor undertook to pay the amount on demand. The default in payment took place in 1879 and the plaint was presented on 14-9-1895. It was held that the words `on demand' were intended to import a condition that the demand fell within the period, and that, therefore, the suit was not barred by the law of limitation. 7. The same question came up for consideration in a number of cases later on and there was some difference of opinion, so that the matter came to be referred to a Full Bench, whose decision is reported in Vali Venkatasami Chettiar v. Ramalingam, ILR (1945) Mad 758=( AIR 1945 Mad 157 ) (FB). In that case the mortgage bond provided that the mortgage money would be payable whenever demanded. The mortgaged property was sold, but the amount realised was not sufficient to discharge the full liability. The mortgage deed had been executed on 2-6-1931, and the suit to enforce the payment was filed on 22-2-1938. As more than six years had elapsed from the date of the mortgage deed, the trial court dismissed the suit on the ground that the application for a personal decree had been filed out of time. The mortgage deed had been executed on 2-6-1931, and the suit to enforce the payment was filed on 22-2-1938. As more than six years had elapsed from the date of the mortgage deed, the trial court dismissed the suit on the ground that the application for a personal decree had been filed out of time. The question before the Full Bench was whether the suit filed beyond the period of six years from the date of the instrument was within time. After noticing the earlier decisions on the point, at page 770 (of ILR Mad) = (at p. 161 of AIR) it was observed- "Without hesitation we accept as being correct the decisions of this court which say that when a mortgage bond provides that the mortgage money shall be payable on demand it becomes repayable at once and limitation starts from the date of the bond." The decision in (1906) 16 Mad LJ 364 is inconsistent with this decision of the Full Bench and cannot, therefore, be treated as good law. 8. Though it is unnecessary to cite any further decision after the Full Bench decision mentioned above, I may, however, refer to a decision of a learned single Judge of this court in Narayana Chettiar v. Rangaswami Naidu, 1968-2 Mad LJ 445. In that case the mortgage document was a combination of a simple mortgage and usufructuary mortgage containing a personal covenant for payment. On the date of the mortgage itself the mortgaged properties were leased by the mortgagee to the mortgagor for a period of five years from 17-5-1927. The mortgagee demanded the amount in 1959, that is, 32 years after the execution of the mortgage deed. Thereafter he filed a suit. It was held that the starting point of limitation under Article 132, which was the corresponding Article under the Limitation Act, 1908, was when the money sued for became due. It was contended that so far as the personal covenant was concerned, the money did not become due till demand for the money was made. It was held that the money became payable on the expiry of the five year period. If the contention that the money became due only on demand by the mortgagee, was accepted, it was pointed out that the mortgagee, by not making the demand, could postpone redemption and that the clause would then become a clog on redemption. It was held that the money became payable on the expiry of the five year period. If the contention that the money became due only on demand by the mortgagee, was accepted, it was pointed out that the mortgagee, by not making the demand, could postpone redemption and that the clause would then become a clog on redemption. This contention was, therefore, rejected. 9. The result of the above discussion is that the mortgage money became due at the time when the period fixed for redemption by the mortgagor expired. The agreement to pay whenever demanded did not mean that demand was a condition so that it became due only on that date. In the present case, the amount became due on 14-12-1952, when the period fixed for redemption came to an end. The suit should have been filed within a period of 12 years thereafter. As it was not so filed, the suit was rightly dismissed by the trial court. The decision to the contrary by the learned Subordinate Judge is, therefore not correct. This appeal is, therefore, allowed and the judgment and decree of the trial court are restored. No costs in second appeal. No leave.