Judgment :- First defendant in O.S.No.174 of 1985 of the III Additional Sub Judge. Ernakulam is the appellant: plaintiff and defendants 2 to 6 are the respondents. 2. The plaintiff's case can be summarized as follows: Appellant is the widow of late Sri. P.L. George. Late Sri. P.L. George approached plaintiff -first respondent bank for raising a loan for construction of a multi-strayed building in the plaint A schedule property and offered to secure the loan by mortgaging plaint A schedule property by deposit of title deeds. First respondent bank agreed to the same pursuant to which on 19-7-1979 the said P.L. George deposited Exts. A1 to A3 title deeds with respect to the A schedule property along with Ext.A4 power of attorney with the intention to create an equitable mortgage on his behalf as well as on behalf of defendants 1 to 3. and executed Ext.A-16 memorandum of deposit of title deeds. On the basis of the same amounts were advanced and he executed Ext.A5 series demand promissory notes when amounts were advanced. All the above advances were kept on separate accounts and later the balance due as per the said accounts were transferred to one account on 30-9-1981. and the amount due on the said date was Rs.8. 31.736.55. Late P.L. George acknowledged the said amount by Ext A11 communication written by him. After his death defendants executed a confirmation Ext.A-19 on 14-1-1983 and thus acknowledged the hability. According to the plaintiff since the defendants failed to insure the building in the plaint A schedule property as agreed. plaintiff got it insured and the amount was added to the principal. Several demands were made for payment of balance and ultimately a registered notice was issued on 31-10-1984. copy of which is Ext.A-12. Since the defendants did not comply with the demand the suit is necessitated. 3. Defendants 1 to 3 filed a joint written statement. and defendants 4 to 6 filed another joint written statement. Their contentions briefly. are: Late P.L. George did not create an equitable mortgage. that they did not authorize him to create an equitable mortage, that the suit is barred by limitation. that there was no agreement to pay the interest as claimed and that the promissory note mentioned in the plaint since are materially altered the plaintiff is not entitled to any relief. 4. that they did not authorize him to create an equitable mortage, that the suit is barred by limitation. that there was no agreement to pay the interest as claimed and that the promissory note mentioned in the plaint since are materially altered the plaintiff is not entitled to any relief. 4. Learned Subordinate Judge found the suit is maintainable and that late P.L.George created a mortgage by deposit of title deeds. It was found; the suit is not barred by limitation as against the first defendant and A schedule property. The Court also found. through of the 59 Ext.A-5 series promissory notes 50 were materially altered since the suit is based on accounts also the same is maintainable. Ultimately the suit was decreed for the plaint amount with interest at 14% from the deco the suit till recovery against the first defendant and the plaint A schedule property. The plaintiff was also allowed to realize the decree amount from the assets of the laic P.L.George in the hands of defendants 1 to 6. The said decree and judgment are under challenge in this appeal. 5. Learned counsel for the appellant contended that after having found 50 out of 59 promissory notes were materially altered. no decree for the plaint claim could have been passed. It was also contended. at any rate the suit as against the first defendant is barred by limitation. It was also his case that no equitable mortgage was created. in the alternative late P.I. George had no authority to execute can equitable mortgage on behalf of defendants 1 to 3. Learned counsel maintained. since there was no agreement to pay interest the lower court ought note have awarded interest at 14% 6. On the other hand it was contended by the plaintiff that Exts.A1 and A2 title deeds along with Ext.A-16 memorandum and Ext.A4 general power of attorney executed by defendants 1 to 3 would prove the equitable mortgage. and that Exts. A6 and A7 account would prove that loan was advanced. According to him the suit being on accounts the claim is not barred by limitation. He supported the decree and judgment rendered by the lower court. 7. Maintainability of the suit is attacked in view of the finding by the lower court that 50 out of Ext.A5 series promissory notes are materially altered. According to him the suit being on accounts the claim is not barred by limitation. He supported the decree and judgment rendered by the lower court. 7. Maintainability of the suit is attacked in view of the finding by the lower court that 50 out of Ext.A5 series promissory notes are materially altered. The first question to be considered in this regard is whether there is material alteration. According to the appellant the portion concerning interest was left blank in the promissory notes. which was later filled up by the plaintiff without the consent of the promissor. Reliance was made on Ext.B1 series cafoon copies of Ext.A5 series. According to defendants plaintiff used to supply cafoon copies of the promote to late P.L.George when he executed the same. We cannot but remark that it is an unusual and strange practice. Whereas the portion concerning interest is filled up in Ext.A-5 series, the said portion remains blank in Ext.B1 scries. The lower court stales. there was however no dispute as regards the validity of Exts.A5 (b). A5 (e). A5 (ac). A5 (ac). A5 (ag), A5 (c). A5 (aj), A5 (am) and A5 (aj). Still. according to the learned counsel for the appellant inasmuch as the claim in the suit rests on materially altered promissory noises no decree could have been passed in favour of the plaintiff. According to him since no cause of action could arise on a materially altered promissory note the suit itself' is not maintainable. Learned counsel relied on decision inclusive of the decision of the Privy Council in support of the said contention. We may advert to the said decisions. 8. In the decision in Nathu Lai and others v. Mt.Gomti Kuar and others (MR 1940 Privy Council 160) the Privy Council held that material alteration is one which varies the rights. habilities. or legal position of the parties as curtained by the deed inils original state or otherwise varies the legal effect of the instrument as originally expressed. or reduces to certainly sonic provision which was originally ascertained or may otherwise prejudice the party bound by the deed as originally executed. In the decision in N. Narayanaswamy v. Dadanlal (AIR 1982 Karnataka 227) it is held. or reduces to certainly sonic provision which was originally ascertained or may otherwise prejudice the party bound by the deed as originally executed. In the decision in N. Narayanaswamy v. Dadanlal (AIR 1982 Karnataka 227) it is held. the filling up of the interest column in a promissory note without t he consent of the prom issuer would amount to material alteration; and the decision in Sankara Filial v. Usman Settu (1 %3KLT241) held that affixing of additional stams on a promissory note in order to make it a valid instrument in law is a material alteration. It was also held in the said decision that when a promissory note on the face of it is materially altered the promise has to prove that (here was no alteration after the execution. There is no acceptable evidence to show that such filling of the interest column in the said 50 promissory notes was with the consent of the promissor. Thus it could be seen that the said promissory noise were materially altered. 9. In the decision in Verco Private Ltd.. Pad/ and others v. Newandram Naraindas and another (AIR 1974 Madras 4) it is held that as per S.87 of the Negotiable Instrument Act such alteration would render the promissory note void and inoperative. No cause of action will arise on the basis of a materially altered promissory note. As noted the content ion is. inasmuch as the suit is based on the promissory notes which are materially altered. the plaintiff is not entitled to a decree for the plaint amount and in the circumstance. the plaintiff is not entitled to a decree on the original cause of action also as Hie amounts were advanced simultaneously with the execution of the said 10. But the main question to be considered is whether the suit is on promissory notes as is maintained by the learned counsel for the appellant or whether the same is on accoums secured by an equitable mortgage as contended by the first respondent. Finding on this aspect has crucial relevance not only on the maintainability of the suit but also on the question of limitation as according to the learned counsel for the appellant even assuming the suit is within time-so far as the A schedule properties arc concerned the personal hability of the first defendant is barred by limitation. The point urged is. The point urged is. even though the period of limitation for enforcing payment of money secured by mortgage is 12 years from the date when the money become due. so far as personal hability of first defendant is concerned the article applicable being Article 55 which prescribes only 3 years from the date when breach occurred. the hability of the first defendant is barred by limitation. According to the learned counsel Ext.A-19 acknowledgement relied on by the plaintiff could not save limitation as to personal hability of first defendant. since the same is beyond 3 years of the quotable mortgage. 11. If suit is on accounts secured by equitable mortgage the said argument by the learned counsel for the appellant as to the maintainability of the suit as well as limitation will lose its force. When the suit is based on accounts. the cause of action for the same being not on the promissory note the invalidity of the same cannot affect the maintainability of the suit. And when the suit is based on mutual and current account the same would be governed by Article 1 of the Limitation Act. the period being 3 years from the close of the year in which last item admitted or proved is entered. Plaintiff produced Exts.A6 and A7 extracts of the account duly attested. The genuineness of the account except the rate of interest is not in dispute. According to the plaintiff the suit being within 3 years of the last entry in Exl.A? Is within time. Thus as regards maintainability and as well as limitation the scope and nature of the suit acquires paramount importance. 12. Now we may examine the nature and scope of the suit. That has to be judged on the basis of the allegations and recitals in the plaint. A reading of paragraph 1 to 3 of the plaint would show that. the loans were advanced on the basis of equitable mortgage. that as and when amounts were advanced promissory notes were got executed. that plaintiff used 10 keep separate accounts for the advances. that later it was consolidated into one account and that the balance outstanding was admitted by lay P.L.George in Ext. A-11 and by the appellant in Ext.A-19. The very valuation in the plaint states: "the amount due as per the account" as on 31-3-1985". that plaintiff used 10 keep separate accounts for the advances. that later it was consolidated into one account and that the balance outstanding was admitted by lay P.L.George in Ext. A-11 and by the appellant in Ext.A-19. The very valuation in the plaint states: "the amount due as per the account" as on 31-3-1985". The allegations and recitals in the plaint clearly brings out that the suit is based on account secured by an equitable mortgage. Thus the character of the suit being so Ext.A5 series promotes could only be collateral in nature and their invalidity on account of material alteration cannot affect the maintainability of the suit. The contention regarding limitation can be conveniently dealt with after adverting to the contention of the defendants that no equitable mortgage as alleged was created. 13. the question for consideration is whether in. fact an equitable mortgage was created by the late P.L.George and if so whether that was on behalf of defendants 1 to 3 also. As has already been noted plaintiff produced Exts.A1 to A4 and A16 in support of their contention. Ext.A-16 is the memorandum executed by late P.L.George. According to plaintiff the said George deposited Exts.A1 and A2. executed Ext. A16 and produced Ext.A-4 General power of attorney executed by defendants 1 to 3. There is absolutely no explanation by the defendants as to how plaintiff obtained custody of those documents. The fact the defendants have no dispute that the said George raised loan from the Bank is a circumstance to be reckoned in appreciating the case of the plaintiff as regards the creation of the equitable mortgage. The product ion of the said documents by the plaintiff in the context of the loans availed by him and Ext.A-16 unambiguously establishes that late George deposited the title deeds and executed Ext.A-16 with the intention of creating an equitable mortgage. The production of Ext.A4 in the circumstance admits of only one explanation. that is. he produced the same in proof of his intention to creating an equitable mortgage on behalf of defendants 1 to 3 also. In our view the production of Ext. A4 along with the memorandum as well as the title deed is a positive circumstance which can lead to the only inference that the deceased created equitable mortgage not only on his behalf but on behalf of defendants 1 to 3 also. In our view the production of Ext. A4 along with the memorandum as well as the title deed is a positive circumstance which can lead to the only inference that the deceased created equitable mortgage not only on his behalf but on behalf of defendants 1 to 3 also. This is also supported by Exts. A-11 and A-19. Ext.A-12 suit notice was not replied. In Ext.A-19 the appellant admitted the hability of Rs.9,13,993.95 balances due as per loan taken by late P.L.George. Of course learned counsel for the appellant attacked Ext.A-19 contending that the first defendant signed Ext. A-19 without understanding its contents. First defendant is an educated lady. and no acceptable evidence was tendered as to the occasion for her to sign a document without noting its contents. It is significant to note that it is not her case that she signed a blank paper. In the given circumstances we are not persuaded to accept the said argument of the learned counsel. In Ext.A-11 the late P.L.George himself admitted the hability under the transaction. Though advances were made only pursuant to the creation of equitable mortgage that cannot affect its validity. An equitable mortgage can as will be for an existing debt or future advances as transfer of an interest in properly to secure payment of money advanced or to be advanced. or an existing or future debt is a mortgage under Section 58(a). and sub-section (f) which defines equitable mortgage merely prescribes one of the modes of creating mortgage (Sec page 385 of Mulla on Transfer of Property Act. 1882. Seventh Edition). 14. Now we may take up the contention regarding limitation. The plaint claim is sought to be enforced against the plaint A schedule property and against the defendants. As per S.96 of the Transfer of Property Act the provisions. which apply to a simple mortage, so far as may be. apply to a mortgage by deposit of title deeds also. Under Article 62 of the Limitation Act the period for enforcing payment of money secured by a mortgage or otherwise charged upon immovable property is 12 years. and the period would start to run when the money sued for becomes due. The equitable mortgage was on 19-7-1979. The suit was instituted on 10-4-1985. Thus the suit is within time with respect to the claim against a schedule property. 15. and the period would start to run when the money sued for becomes due. The equitable mortgage was on 19-7-1979. The suit was instituted on 10-4-1985. Thus the suit is within time with respect to the claim against a schedule property. 15. According to the learned counsel so far as personal remedy is concerned. the period of limitation is only 3 years under Article 55 of the Limitation Act. in which case. according to him. the suit is beyond time. Though under the Limitation Act of 1908 personal remedy could be enforced under Article 116 of the said Limitation As. since there is no corresponding Article in the Limitation Act of 1963 the Article applicable is Article 55 which provides for a period of three years for suits for compensation for the breach of any contract and the period would commence from the date of breach. The learned counsel relied on the commentaries to the Transfer of Property Act by Mulla (Page 472-Seventh Edition) in support of the said contention. According to the learned counsel since the transaction was on 19-7-1979 and the period of limitation being only three years. the suit so far as it relates to personal hability of the first defendant is barred by limitation. The learned counsel pointed out that 3 years' period expired by 18-7-1982 and Ext.A-19 being only on 14-1-1983 cannot opera teas an acknowledgement as the same was not within the period of limitation. 16. We do not think that this contention of the learned counsel for the appellant sustainable. We have already pointed out that the suits on accounts secured by equitable mortgage. Ext.A7 is the consolidated account. The last advance was made on 9-10-1980. Ext.A-19 acknowledgement was executed by the first defendant on 14-1-1983 within three years of the last advance. Incidentally one aspect has to be adverted. Though the plaintiff has a case that Ext.A-19 was executed by the first defendant on be half of the other defendants also. that was not accepted by the court below. and the court below passed the decree against the first defendant A schedule property and the assets of late P.L.George in the hands of the defendants. There being no cross appeal it is unnecessary to consider whether Ext.A-19 was executed on behalf of the other defendants also. The Article applicable in such circumstances is Article I of the Limitation Act. and the court below passed the decree against the first defendant A schedule property and the assets of late P.L.George in the hands of the defendants. There being no cross appeal it is unnecessary to consider whether Ext.A-19 was executed on behalf of the other defendants also. The Article applicable in such circumstances is Article I of the Limitation Act. A suit for balance due on a mutual. open and current account where there have been reciprocal demands between the parties. the period of limitation is three years. from the year in which the last item admitted or proved is entered in the account. It is true a mere loan transaction and periodical repayment of the said loan cannot make the account mutual. open and current. The Article would apply only where there are transactions on either side craning independent obligation on the other. In other words limitation would start to run from the date of the last item in the case of the mutual account between parties with reciprocity of dealings - transactions in which there was mutual credit on either side an express or implied agreement for the set off of mutual debt is a mutual and current account. There should be mutual contractual relationship between the parties where the dealings between them disclose two contractual relationshis between them arising demands by the one against the other to make the account a mutual and current account so as to attract Article I of the Limitation Act. 17. Now the question therefore is whether the account in question is purely a loan transaction or is a mutual and current account. The loan admittedly was taken for constructing a building in a schedule and was used for constructing it; now admittedly the first respondent's office is functioning in the first floor of the building. The rent towards the said premises is being credited against the loan. Ext.A11 letter by the said late George specifically states that the rent of the first floor is being adjusted against loan and that he has also remitted more amounts. It is clear from the evidence that the rent of the first floor of the building which is the subject matter of the equitable mortgage was being adjusted against the loan taken by the mortgagor. Thus there were mutual obligations arising from the contract. It is clear from the evidence that the rent of the first floor of the building which is the subject matter of the equitable mortgage was being adjusted against the loan taken by the mortgagor. Thus there were mutual obligations arising from the contract. and in such circumstance the Article applicable is Article I of the Limitation Act. When such is the position it could be seen that. the personal remedy against the first defendant also is not barred by limitation. By virtue of S.96 of Transfer of Property Act the provisions of simple mortgage are applicable to a mortgage by the deposit of the deeds. Personal hability either express or implied being one of the ingredients of simple mortgage. the first defendant's personal hability as one of tie mortgagors cannot be doubted. 18. It was also contended that there was no agreement to pay the interest. It cannot in the circumstances be envisaged that the loan was advanced without an agreement to pay interest. The account would show that the interest was cateulated at the rate mentioned in paragraph 3 of the plaint and after the consolidation of the account as on 31-3-1985 the total amount due inclusive of interest was Rs.11,16,083.21. In Ext.A11 late George wanted the bank to inform him the rate of interest and he requested the bank to charge only the minimum interest. Ext.A-12 lawyer notice mentioned total amount due as on 30-9-1974 inclusive of interest. But no reply was sent. Ext.A-21 in this regard is of importance Ext.A-21 is a letter sent by the first defendant whose genuineness was found by the lower court. In the letter itself she alleges that the rate of interest chargeable on such amounts is only 13 %and that the rate of interest must be reduced to the minimum permissible under the rules issued by the Reserve Bank of India from time to time. They wanted the bank to charge the minimum interest. Yet they had no objection in charging interest at the rate fixed by the Reserve Bank from time to time. That was what the plaintiff charged. Therefore we find no force in the argument of the learned counsel with respect to the rate of interest. 19. It was contended by the learned counsel that at any rate future interest cannot exceed 6%. That was what the plaintiff charged. Therefore we find no force in the argument of the learned counsel with respect to the rate of interest. 19. It was contended by the learned counsel that at any rate future interest cannot exceed 6%. Reliance was placed by the learned counsel on the decisions reported in-Soli Pestonji Majoo v. Ganga DharKhemka (AIR 1969 SC 600). State Bank of Travancore v. May C. George (1976 KLT 205) and Divl.Manager, L/C of India v. Bhagavathy Amma (1991 (2) KLT 522) in support of the said argument. 20. Learned counsel contended that there is a significant difference between Order XXXIV Rule 11 (a) (i) of the un amended C.P.C. and Order XXXIV Rule 2 (a)(1) of the amended C.P.C. Whereas in the former interest to be paid was on the principal amount found or declared due on the mortgage "at the rate payable on the principal" the new Rule 2 sub Rule 11 (I (a)(i) provides for only principal and interest on the mortgage. The UN amended Rule 11 (a)(i) reads: "In any decree passed in a suit for foreclosure. sale or redemption. where interest is legally recoverable. the court may order payment of interest to the mortgagee as follows. namely: - (a) Interest up to the date on or before which payment of the amount found or declared due is under the preliminary decree to be made by the mortgagor or other person redeeming the mortgage. - (i) On the principal amount found or declared due on the mortgage- at the rate payable on the principal, or where no such rate is fixed. at such rate as the court deems reasonable. (Emphasis supplied). Order XXXIV was substituted by notification No.D 22480/88 dated 16-12-1989. Rule 2(1)(a)(i) or Order XXXIV so substituted reads: "2(1) in a suit for foreclosure. if the plaintiff succeeds. the court shall pass a decree (a) Declaring the amount due to the plaintiff on the date of such decree for-(i) Principal and interest on the mortgage: (Emphasis supplied). (Emphasis supplied). Order XXXIV was substituted by notification No.D 22480/88 dated 16-12-1989. Rule 2(1)(a)(i) or Order XXXIV so substituted reads: "2(1) in a suit for foreclosure. if the plaintiff succeeds. the court shall pass a decree (a) Declaring the amount due to the plaintiff on the date of such decree for-(i) Principal and interest on the mortgage: (Emphasis supplied). The decision in Soli Pestonji Majoo's case (AIR 1969 SC 600) held with reference to the unamended C.P.C. that Order XXXIV Rule 11 gave discretion to the court so far as pendente lite and subsequent interest is concerned and it is not obligatory on the courts to decree interest at the contractual rate up to the date of redemption in all circumstances: and in the decision in State Bank of Travancore's case (1976 KLT 205) it was held as per the then amendment to Order XXXIV as per notification dated 10-12-1973 where also Rule 2 Sub Rule (a)(i) was similar in terms. the decree holder is entitled to interest of the principal only at the rate of 6% per annum which is the maximum provided under S.34 C.P.C. 21. As has already noted in the new Rule in the substituted Order XXXIV also there is a significant change. and hence according to the learned counsel. the maximum provided under S.34 C.P.C., which is 6%. alone. can be awarded. In support of the said contention learned counsel relied on the decision in DM. Manager. L/C of India's case (1991 (2) KLT 522). Though in the circumstances S.34 C.P.C. should govern the awarding of future interest the amendment to S.34 CPC since State Bank of Travancore's decision (1976 KLT 205) is of importance. S.34 CPC was amended by CPC Amended Act 1976 which came into force on 1-7-1977. By the amendment a proviso was added to S.34 CPC according to which when the hability is in relation to an adjudged sum arising out of a commercial transaction the rate of future interest could exceed 6% but should not exceed the contractual rate of interest. Explanation II of S.34 CP&slatcs that. for the purpose of the Section a transaction is a commercial transaction if it is connected with industry. trade or business of the party incurring the hability. 22. Learned counsel for the first respondent contended. Explanation II of S.34 CP&slatcs that. for the purpose of the Section a transaction is a commercial transaction if it is connected with industry. trade or business of the party incurring the hability. 22. Learned counsel for the first respondent contended. the transaction in question being a commercial transaction within the meaning of proviso to S.34 CPC the future interest has to be at the contract rate. But the learned counsel for the appellant maintained that the transaction is not a commercial transaction. As has noted the loan was taken for constructing a building which was intended to be let out. as a matter of fact the first floor of the building is now occupied by the first respondent and she rent of which is being credited against the outstanding hability. Thus the loan was taken for the purpose of constructing a building to be let out. The object of the end devour was to make profit. Investment in real estate is now common and large amounts are being invested in the real estate. In considering the scope and ambit of the proviso to S.34 CPC one cannot forget the fact that now real estate transaction is very much a commercial transaction. The words employed in a provision would acquire content and meaning from the context in which they are used. We are of the view that transaction of this nature whose object is to earn a return and make profit is commercial activity at least it is a business activity. That being so. the proviso to S.34 CPC is attracted and hence interest could be at the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions. Lower court awarded future interest only at 14%. which is the minimum charged by the bank. We do not see anything wrong in awarding interest at the said rate. Thus the points raised by the learned counsel for the appellant are not sustainable and the appeal is hable to be dismissed. In the result the appeal fails and the same is dismissed with costs of the first respondent. The appellant was permitted to file the appeal as an indigent person. The appellant is hable to pay court fee under Rule 11 of Order 33 C.P.C. and we order him to pay the court fee. In the result the appeal fails and the same is dismissed with costs of the first respondent. The appellant was permitted to file the appeal as an indigent person. The appellant is hable to pay court fee under Rule 11 of Order 33 C.P.C. and we order him to pay the court fee. A copy of the decree shall be forwarded to the Collector under Rule 14 of Order 33 read with Rule 1 of Order 44 C.P.C. for realization of the court fee.