Appeal No 560 of 1960
Appeal from the judgment and decree dated July 18 1955 of the Patna High Court in Appeal from original decree No 500 of 1947
SC Agarwal and DP Singh for the appellant
PK Ghosh for respondent No 1
December 3 1963
The Judgment of the Court was delivered by SHAH J
Rajkumar Ran Bahadur Singh hereinafter called the mortgagor  was the proprietor of a five annas share in Tauzi No 16 of Mauza Bansjora eight annas share in Mauza Simitanr and certain interest in Mauza Bahaldih all in District Manbhum
The mortgagor had leased 200 bighas of coal bearing land out of his holding in Mauza Bahaldih to certain lessees for an annual royalty of Rs 2000 payable in two equal instalments the first in the month of Aswin of the Vikram year and the second in the month of Chaitra
On June 14 1922 the mortgagor borrowed Rs 5500 from one Rabindra Nath Chakravarty and executed a deed of mortgage whereby he agreed personally to repay the amount and encum bered his share in Mauzas Bansjora and Simitanr for repayment of the amount borrowed with interest at the rate of Rs 18 per mensem and further agreed that in default of payment the mortgagee do recover the amount due by sale of his interest in Mauza Bansjora Simitanr and Bahaldih
By the mortgagedeed the mortgagor also agreed that the mortgagee do receive the amount due as royalty from the tenants under mining leases in Mauza Bahaldih in the month 637 of Aswin
By another deed dated August 27 192 the mortgagor created a mortgage in favour of Sasindranath Chakravarty and Indra Nath Chakravartyto secure payment of Rs 5500 advanced to him and interest thereon
The covenants of this mortgage deed were substantially the same as the covenants of the earlier mortgage deed dated June 14 1922 and it was agreed that the mortgagees were to receive the instalment of royalty payable in Chaitra in respect of Mauza Bahaldih
Under these mortgage deeds the due date for payment was April 14 1925
On May 17 1927 the mortgagor assigned his interest in Mauza Bansjora to one Mahendra Nath Rai and on October 2 1927 he assigned his interest in Mauza Simitanr to one Pushpa Moyee Devi
Thereafter in execution of a money decree obtained against the mortgagor his right title and interest in mauz Bahaldih was sold on January 16 1937 and after th sale was confirmed possession of Mauza Bahaldih was taken by the auction purchaser on April 7 1937 By two deeds dated June 18 1946 Manimala Devi the plaintiff in the suit out of which this appeal arises obtained assignments of the rights of the mortgagees under the two deeds dated June 14 1922 and August 27 1922 and filed a suit on July 12 1946 in the Court of the Subordinate Judge at Dhanbad for a decree for enforcement of the two mortgages by sale of the mortgaged properties
To the suit were impleaded as defendants the representatives of the original mortgagees the heirs of the mortgagor and certain alienees of the mortgaged property
The suit was filed more than twelve years after the date on which the mortgage amount because payable and prima facie it was barred by the law of limitation
But the plaintiff sought to bring the claim within limitation relying upon certain part payments towards the mortgage dues made by the mortgagor
On the deed dated June 14 1922 was recorded an endorsement dated April 1 1937 relating to payment of Rs 600 as interest which was signed by the mortgagor
On the mortgage deed dated 638 August 27 1922 there was recorded an endorsement dated August 16 1934 of payment of Rs 100 which also was signed by the mortgagor
The plaintiff relied upon part payments evidenced by these endorsements to extend the period of limitation in respect of the two mortgage claims
The trial Judge rejected the defence raised by the contesting defendants and held that the suit in respect of the first mortgage was not barred by the law of limitation because the mortgage was partly simple and partly usufructuary and even though the plaintiff could not rely upon part payment of principal or interest to extend the period of limitation for the suit she could still maintain the suit relying upon the dispossession of the mortgagee on April 7 1937 by the auction purchaser who purchased the mortgagor s rights in Bahaldih lands at the Court auction and that the suit to enforce that mortgage was accordingly within limitation
In respect of the mortgage dated August 27 1922 the Judge held that the claim was within limitation both on account of part payment of principal and interest and upon the cause of action furnished by the dispossession of the mortgagees in respect of the Bahaldih property
In appeal by the fourth defendant widow of Mehandra Nath Rai the High Court of Patna reversed the decree passed by the trial Court and dismissed the plaintiff s suit
The High Court held that as the plaintiff had in her plaint not relied upon dispossession as a ground for extension of the period of limitation that claim should not have been permitted to be made out by the trial Court
The High Court also held that Mauza Bahaldih was not given in mortgage to the mortgagees under either of the two mortgagedeeds and dispossession of the mortgagees from Mauza Bahaldih or part payments of principal or interest after the mortgagor had parted with his interest in the mortgaged properties Mauzas Bansjora and Simitanr could not operate to extend the period of limitation for the suit
The High Court further held that in any event even if Mauza Bahaldih was 639 one of the mortgaged properties the mortgagor having lost his interest in Mauzas Bansjora Simitanr and Bahaldih prior to the payment of Rs 600 by the mortgagor on April 1 1937 as evidenced by the endorsement on the first mortgage deed the plaintiff s suit to enforce the mortgage dated August 27 1922 was barred by limitation
The plaintiff has appealed to this Court with certificate granted by the High Court
The first question which falls to be considered is whether Mauza Bahaldih was mortgaged under the two mortgage deeds
The mortgagor had shortly after the two mortgage deeds transfered his interest in Mauzas Bansjora and Simitanr and for reasons which we will presently set out the mortgagor cannot by making part payments seek to extend the period of limitation against his assignee after he has lost his interest in the property mortgaged
The two part payments dated August 16 1934 and April 1 1937 could operate to extend the period of limitation if the mortgagor continued to remain on those dates owner of the mortgaged property or part thereof
The plaintiff could therefore avail of the extension of the period of limitation by part payments only if th mortgagor s interest in Mauza Bahaldih stood mortgaged at the dates of those part payments for the mortgagor s interest in Mauzas Bansjora and Simitanr was assigned to strangers many years before those par payments were made
The terms of the two mortgage deeds are substantially the same and such differences as there are in the covenants have no bearing on the questions to be decided in this appeal
We will therefore set out the material recitals and clauses in the mortgage deed dated June 14 1922
In the preamble clause it was recited that Tauzi No 16 of collectorate and district Mandhum constitutes the zamindari interest and that on the death of his late father the mortgagor acquired the said zamindari and that he was entitled to transfer encumber or sell the whole property included within the said Tauzi No 16 at his free will
By paragraph 4 640 the mortgagor undertook to pay interest at the rate of Rs 18 one rupee eight annas per cent per mensem on the amount of Rs 5500 borrowed by him
In paragraph 5 it was stated that it was not possible for the mortgagor to pay interest every year on the amount borrowed by him and accordingly he had agreed that the tenants of the coal fields in Mauza Bahaldih with whom he had settled the coal mines in the zamindari shall continue to pay to the mortgagee Rs 1000 on account of one of the instalments for rent minimum royalty and commission due to the mortgagor according to the terms of the contracts
It was further stipulated by paragraph 7 that the mortgagor had assigned the amount due from certain tenants mentioned in the schedule under the instalments specified therein by way of interest for peaceful realisation of the annual interest of Rs 1000 every year and the mortgagee was in default of payment by the tenants competent to realise the same
The mortgagor also undertook to issue notices to the tenants calling upon them to pay the amounts according to the assignment
By paragraph 9 it was agreed that in the event of the tenants failing to pay the amount the mortgagor would compensate the mortgagee in respect of the amount remaining to be realised
Paragraph 12 provided that so long as all the amounts were not repaid in full the mortgagor was not competent to gift sell transfer or encumber make banami or permanent settlement of the mortgaged property specified and described in Sch
kha ie Mauzas Bansjora and Simitanr with any one and that the alienations made by him would be null and void
He further declared that the said properties had not been encumbered to any person and that he was in peaceful possession of the mortgaged property described in Sch
ka viz Mauza Bahaldih and that he was peacefully realising the rents
By paragraph 14 the mortgagor agreed that the properties specified and described in Sch
kha shall always be treated as mortgaged and security for realising the interest and principal due to the mortgagee the amount and interest due to the mortgagee having first charge on the same that 641 should any cause of action arise the mortgagee shall be competent to realise the full amount due to him together with interest and costs by selling the said properties in Sch
ka and kha by action and that should the full amount be not realised the mortgagee will be competent to realise the amount from other moveable and immoveable properties belonging to the mortgagor
By paragraph 13 the mortgagor agreed to pay the principal and the interest due on or after April 14 1925
The mortgagor admitted receipt under each o the two deeds the amount of Rs 5500 advance to him by the mortgagees and agreed to pay interest at the rate of Rs 18 per cent per mensem
had also made an arrangement by which the mortgage was to recover the interest on the mortgage debt out of the instalments of Rs 1000 as royalty in respect of Mauza Bahaldih
There was a covenant that the event of the mortgagee being unable to recover royalty from the tenants the mortgagor would make good the same
Again by paragraph 13 in each of the two deeds there was a covenant for payment of the amount of the principal and interest personal on or after April 14 192 5
A distinction was made paragraphs 12 and 14 between Mauzas Bansjor and Simitanr on the one hand and Mauza Bahaldih on the other
By paragraph 12 the mortgagor had undertaken not to transfer or assign Mauzas Bansjora and Simitanr to any person and had merely assured the mortgagee that he had not assigned the rights in Mauza Bahaldih till the date of mortgage by way of any encumberance to any other person
But that distinction would for the purpose of ascertaining the true nature of the document be immaterial for even in the absence of a covenant not to assign the mortgagor s interest so long as the mortgage remained outstanding the transfer made by the mortgagor of Mauzas Bansjora and Simitanr would be subject to the mortgage
In paragraph 14 it way stated that as security for the realisation of the principal and interest Mauzas Bansjora and Simitanr were to 1SCI64 41 642 stand mortgaged
That may prima facie suggest that those two Mauzas alone were mortgaged but the mortgagor had in the same paragraph agreed that should any cause of action arise  the mortgagee shall be competent to realise the full amount due to him together with interest and costs by selling Mauzas Bansjora simitanr and Bahaldih
The mort gagee could not sell the mortgagor s interest in Mauza Bahaldih in satisfaction on his mortgage claim unless it was mortgaged to him
The intention appearing from this covenant is therefore clearly to encumber Mauzas Bansjora Simitanr and Bahaldih
The High Court in our view was in error in holding that the mortgagor s interest in Mauzas Bansjora and Simitanr only was mortgaged
The question of limitation may now be considered in the light of the finding that Mauza Bahaldih was mortgaged under the two mortagage deeds
The later mortgage was executed on August 271992 and the amount due thereunder was payable on April 14 1925
On August 16 1934 an amount of Rs 100was paid by the mortgagor and an endorsement in that behalf was made on the mortgage bond under his signature and on that date the mortgagor s interest in Mauza Bahaldih was not extinguished
Under article 132 of the Limitation Act Sch 1 a suit to enforce payment of money charged upon immoveable property may be filed within twelve years from the date when the money sued for becomes due
The suit filed by the plaintiff was for enforcement of payment of money charged upon immoveable property and money sued for on the later mortgage had become due on April 14 1925
By section 20 of the Limitation Act where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or by his duly authorised agent a fresh period of limitation will be computed from the time when the payment was made
The mortgagor had parted with his interest in Mauza Bansjora on May 17 1927 and in Mauza Simitanr on October 2 1927 and a 643 mortgagor whose interest in the equity of redemption is transferred by assignment sale or otherwise to another person is not a person liable to pay the debt within the meaning of section 20 of the limitation Act
Part payment made by him towards principal or interest therefore does not extend the period of limitation for enforcement of the mortgage against the transferee of the equity of redemption
If by transfer or assignment of his interest the mortgagor has lost all his interest in the mortgaged property part payment will not extend the period of limitation for at the date of payment he is not the person liable to pay the mortgage debt
The High Court of Madras was right in holding in Pavavi vs Palanivela Goudan 1 that a mortgagor who has lost all interest in the mortgaged property cannot by payment of interest or principal within the meaning of section 20 bind the person on whom the interest has devolved
But the mortgagor s interest in Mauza Bahaldih subsisted on the date of payment by him of Rs 100 towards the principal and interest and such payment having been made within twelve years from April 14 1925 the plaintiff s claim to enforce the mortgage dated August 27 1922 was at the date of the suit not barred by limitation
The amount due under the mortgage dated June 14 1922 was repayable on April 14 1925 and on April 1 1937 Rs 600 were paid by the mortgagor to the mortgagee and the endorsement regarding payment was made on the mortgage deed recording such payment and on that date the period of twelve years commencing from April 14 1925 under article 132 of the limitation Act had not expired
But before that date the mortgagor had lost interest in all the properties mortgaged by him in Mauza Bansjora on May 17 1927 in Mauza Simitanr on October 21 1927 and in Mauza Bahaldih by the auction sale which became affective from January 16 1937
The period of limitation in respect of the first mortgage could not for reasons already set out be extended by part 1 ILR 644 payment made after the mortgagor lost all his interest in the property mortgaged
The plaintiff has not relied upon any other part payment in respect of the first mortgage before the mortgagor s interest in the mortgaged properties was transferred to extend the period of limitation for a suit to enforce the mortgage
But the plaintiff relied upon the sale of the mortgagor s interest at a Court auction and his dispossession as furnishing a fresh cause of action for enforcement of the mortgage
It was urged that by the covenants in the mortgage deed dated June 14 1922 a usufructuary mortgage was created on the mortgagor s interest in Mauza Bahaldih and by the attornment made pursuant to paragraph 7 of the mortgage the mortgagor must be deemed to be in possession till the mortgagor s interest in that property was sold and under section 681 b of the Transfer of Property Act dispossession of the mortgagee from Mauza Bahaldih by virtue of the sale under the money decree passed against the mortgagor a cause of action accrued to the mortgagee to enforce the mortgage and the plaintiff s suit filed within twelve years from the date of dispossession was within time
A suit to enforce a mortgage is governed by article 132 of the limitation Act and has to be filed within twelve years from the date on which the money sued for became due unless the period of limitation so prescribed
is extended in the manner provided by Part III of the limitation Act
Dispossession of the mortgagee is not one of the grounds prescribed by the Act for extension of the time prescribed for filing a suit
Section 68 of the Transfer of Property Act confers a right upon the mortgagee to sue for the mortgage money in four different classes of cases and no others
These classes are a where the mortgagor binds himself to repay the mortgage money  b where by any cause other than the wrongful act or default of the mortgagor or mortgagee the mortgaged property is wholly or partially 645 destroyed or the security is rendered insufficient within the meaning of section 66 and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient and the mortgagor has failed to do so  c where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor  d where the mortgagee being entitled to possession of the mortgaged property the mortgagor fails to deliver the same to him or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor
 The section does not deal with the period of limitation for filing a suit or extension of the period prescribed by the Limitation Act for filing a suit
The right conferred by section 68 is again not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security
A suit for enforcement of the personal covenant to pay the mortgage money when the mortgagor has bound himself to repay the same is governed by article 116 of the Limitation Act
Similarly the right to sue where the mortgagee is deprived of the mortgage security or where he is not secured in his possession of the mortgaged property or where possession is not delivered to him as agreed the claim maintainable by the mortgagee is one for compensation and the period of limitation for a suit to recover the mortgage money is governed by article 120 of the Limitation Act from the date of destruction or deprivation of the mortgage security or possession and not from the date when the mortgage money is repayable  Unichaman vs Ahmed
1 Assuming therefore that 1 ILR 646 by the two deeds the mortgagees were placed in possession of the right to recover royalty in respect of Mauza Bahaldih and that the sale of that property in enforcement of the decree of a Civil Court constituted deprivation of the security or disturbance of their possession by the creditors of the mortgagor dispossession having taken place in 1937 the suit filed on July 12 1946 regarded as one to enforce the claim to recover the mortgage money under section 68 of the Transfer of Property Act was barred by the law of limitation
This appeal will therefore be partially allowed
The decree passed by the High Court will be set aside and there will be a decree in favour of the plaintiff only in respect of the mortgage dated August 27 1922
The trial Court will draw up an appropriate decree in that behalf
The plaintiff s appeal will fail in respect of the mortgage dated June 14 1922
The plaintiff will pay the costs of the fourth defendant who alone has defended this appeal
The plaintiff will be entitled to her costs in respect of the mortgage dated August 27 1922 from the original mortgagor s heirs and the transferees in interest of the property which was the subject matter of the said mortgage
Appeal partly allowed


Summary:
One Rajkumar Singh was the proprietor of three properties AB and C
He borrowed a loan from Rabindra Nath and mort gaged properties A and B and by the deed of mortgage undertook personal liability to pay the dues and agreed that in default of payment by the due date the mortgagee do recover his dues by sale of properties A B and C
He created a second mortgage t secure another sum borrowed from Sasindra Nath and Indra Nath stipulating that he would repay the loan on or before a fixed date and further stipulating that the mortgagees may receive royalty from the terms of property C
Five years later he assigned his interest in property A and about three months thereafter he assigned his interest in property Subsequent to this assignment an endorsement of part payment was recorded on the first mortgage deed
The mortgagor s right title and interest in property C were sold at a court auction and the purchaser took possession of that property
But before this date the mortgagor had made another part payment and an endorsement was made to this effect on the mortgage bond
Sometime later the appellant obtained assignments of the rights of the mortgagees under the mortgage deeds and filed a suit for a decree enforcement of the two mortgages by sale of the mortgage properties
This suit was filed more than twelve years after t date on which the mortgage amounts became payable
The trial court rejecting the pleas of limitation raised by t defendants decreed the suit
On appeal by the fourth defend the High Court reversed the decree and dismissed the suit
Held i The High Court was in error in holding that t mortgagor s interest in properties A  B only was mortgaged
ii A mortgagor whose interest in the equity of redemption transferred by assignment sale or otherwise to another person not a person liable to pay the debt within the meaning of section of the Limitation Act
Part payment in the mortgagor a transfer or assignment of his interest in the mortgaged property will not therefore extend the period of limitation under section 20 of the Limitation Act
Pavai vs Palanivela Goundan ILR 636 iii The right conferred by section 68 of the Transfer of Property Act is not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security
A suit for enforcement of the personal covenant in such a case is governed by article 116 of the Limitation Act 1908 and a suit for enforcement of a claim for compensation is governed by article 120 of the Act
Unichaman vs Ahmed ILR