Case: Manimala Devi Vs. Indu Bala Debya &amp; Others

mortgage debt.The High Court of Madras was right in holding in Pavayi v. Palamiyela Goundan, ILR 1940 Mad 872 : (AIR 1940 Mad 470 ) (FB) that a mortgagor who has lost all interest in the mortgaged property cannot by payment of interest or principal within the meaning of S. 20 bind the person on whom the interest has devolved. But the mortgagors 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 plaintiffs claim to enforce the mortgage dated August 27, 1922, was at the date of the suit not barred by limitation.10. 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 Art. 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 2, 1927, and in Mauza Bahaldih by the auction sale which became effective 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 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 mortgagors interest in the mortgaged properties was transferred, to extend the period of limitation for a suit to enforce the mortgage.11. But the plaintiff relied upon the sale of the mortgagors 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 mortgagors 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 mortgagors interest, in that property was sold, and under S. 68 (1) (d) 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 plaintiffs suit filed within twelve years from the date of dispossession was within time.A suit to enforce a mortgage is governed by Art. 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.12. 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 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 S. 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 mortgagor has bound himself to repay the same is governed by Art. 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 Art. 120 of the Limitation Act from the date of destruction or deprivation of the mortgage security possession and not from the date when the mortgage money is repayable:(sic)Unichaman v. Ahmed, ILR 21 Mad 242, Assuming therefore that by the two deeds that 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 S. 68 of the Transfer of Property Act was barred by the law of limitation.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. The High Court, in our view, was in error in holding that the mortgagors 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 mortgage-deeds.The later mortgage was executed on August 27, 1922, and the amount due thereunder was payable on April 14, 1925. On August 16, 1934, an amount of Rs. 100/- was paid by ;the mortgagor and an endorsement in that behalf was made on the mortgage-bond under his signature, and on that date the mortgagors interest in Mauza Bahaldih was notsection 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 S. 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 mortgagor has bound himself to repay the same is governed by Art. 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 Art. 120 of the Limitation Act from the date of destruction or deprivation of the mortgage security possession and not from the date when the mortgage money is repayable:(sic)Unichaman v. Ahmed, ILR 21 Mad 242, Assuming therefore that by the two deeds that 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 S. 68 of the Transfer of Property Act was barred by the law of limitation.