Source: https://www.legalindia.com/judgments/ramachandra-rayaguru-vs-modhu-padhi-on-15-july-1898
Timestamp: 2019-04-22 16:53:19+00:00

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Posted On July 15, 1898 by &filed under High Court, Madras High Court.
1. The question referred to the Full Bench is whether Article 132 or Article 147 of the second schedule to the Limitation Act applies to a suit for sale by a mortgagee holding such a mortgage as that in the present case.
2. The Allahabad High Court has held in Shib Lal v. Ganga Prasad I.L.R. 6 All. 551 that Article 147 is applicable to all mortgage instruments.
3. The Calcutta High Court has held in Girivar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730 that Article 147 applies only to a special kind of mortgage known as ” English mortgage, ” and in other cases Article 132 applies.
4. The Bombay High Court, in Motiram v. Vitai I.L.R., 13 Bom., 90 differs from Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730 and holds that Section 147 applies.
5. The Madras High Court in Davani v. Ratna I.L.R., 6 Mad., 417 and Aliba v. Nanu I.L.R., 9 Mad., 218 has held that Article 132 governed a suit upon a mortgage bond to recover the mortgage money by sale of the mortgaged property–although in later cases that view has been dissented from. This case has been twice argued before the Full Bench, but no one appeared for the respondent. The point, in my opinion, is one of great difficulty, and it is to be hoped that the Legislature will see fit to make the Law of Limitation definite on this very important point.
6. I have read with great care the decisions of the Calcutta and Bombay Courts, and the reasons given in the judgment of the learned Judges of the Calcutta High Court in Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal. 730 appear to me to be sound in law, and I, therefore, answer this reference by saying that the suit in question is governed by Article 132.
7. The instrument in this case is dated the 2nd July 1879, and purports to be a mortgage with possession,of certain immoveable property. In addition to the ordinary words used in such an instrument there is a covenant to repay the mortgage amount. The right to possession has never been put in force, and if was presumably lost by the bar of limitation before the present suit was brought. The plaintiff comes into Court seeking to put in force the alternative remedy which the covenant in his favour gives him. If that had been the only remedy open to him under the instrument of mortgage and that remedy had been barred by the Law of Limitation, it appears to me that it must be nonetheless barred by the same law, because there was at one time another remedy available to the plaintiff. I think, therefore, the case may be considered without reference to the right of possession and on the supposition that the instrument is an ordinary instrument of hypothecation.
8. Previously to the passing of the Act of 1877 there can be no dispute that the time limited by law for suits upon such instruments brought in the Provincial Courts was twelve years. That is the period limited by the Regulation, by the Act of 1859 and by the Act of 1871. It is equally clear that no such limitation was put on the mortgagor’s right of redemption. Under the Regulation there was no limit prescribed. By the Act of 1859 a limitation of sixty years in the case of immoveable property and thirty years in the case of moveable property was introduced, and the law has to that extent remained unaltered to the present day. Before the Act of 1859 came into force there was for the Supreme Court no statutory law affecting suits in equity to redeem or to foreclose. Presumably the Court acted on the principles enunciated in the English Courts prior to the passing of the Statute of William IV–I cannot find any reported cases. According to the law as then understood in England the possession of the mortgagor was a possession held by the sufferance of the mortgagee under a tacit agreement which the latter might determine at his pleasure. His possession was not wrongful or adverse, and therefore, time did not run against the mortgagee [Keech v. Hall 1 Smith’s L. C, 574, Pugh v. Heath L.B., 7 App., Cas., 235]. In the Courts of Common Law, therefore, it was always open to the mortgagee to bring ejectment against his mortgagor. In the Court of Chancery, though no time was limited for the redemption of a mortgage, the Court did in its discretion act upon the analogy of the statute and generally refused to relieve a mortgagor after twenty years’ possession by the mortgagee. Eonblanque’s ‘Equity,’ Volume I, page 323; Spence’s ‘Equity,’ Volume II, page 709. The Act of 1859 follows the Statute of William in taking away the discretionary power of the Court and fixing a precise limit of time, which for the case of a mortgagee’s suit was twelve years, no distinction being made between mortgages and mere hypothecations. Evidently this was thought to be a mistake, because in the Act of 1871. special provision .of sixty years is made for the mortgagee’s suit in a High Court to eject his mortgagor, though no specific or appropriate provision was made for the case of a foreclosure suit. Such being the state of the law before the Act of 1877 was passed, the contention that Article 147 of the Act was designed for all suits upon instruments of mortgage or hypothecation in which a sale only could be demanded, involves the idea that the Legislature intended to alter the law for all such suits in a direction favourable to the plaintiff. Now, if that was the intention, which in itself is not probable, one would have expected an alteration of that particular part of the Act of 1871 which referred, or had been held to refer, to suits by mortgagees upon instruments of hypothecation. The particular article of the schedule, which, as the Legislature must have known, was held applicable to such suits, was Article 132. The fact that it re-appears in the new schedule, unaltered in any point material to the present case, must, I apprehend, be taken to show that the Legislature considered it adequate for the purposes for which it had been used, and since it cannot have been intended that the two Articles 132 and 147, should apply to the same class of suits, it is more reasonable to suppose that the former was intended to perform the same functions as had been performed by the repealed article, and that the latter, a new article, was designed for some other or special class of cases. There is no difficulty in naming the class of cases which the Legislature may have had in mind. As is pointed out in Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730, at p. 739 the deficiency of the Act of 1871 in this respect had been brought to light by the argument used in a case decided by Sir Charles Sargent a few months before the Act of 1877 was passed [Ganpat Panalurang v. Adarji Dadabhai I.L.R., 3 Bom., 312, at p. 330] and it may well have been apprehended that the Courts, considering in accordance with Wrixon v. Vise 3 Dru. & War., 104, at p, 120 that a suit to foreclose was not a suit to recover money, might hold that to such a suit Article 132 was not properly applicable. The phrase ” suit for money charged upon immoveable property ” or ” to enforce payment of money charged upon immoveable property ” does not fitly describe a suit which, while it may lead to the payment of money, is directly addressed to the recovery of the equity of redemption. On the other hand, the phrase ” suit for foreclosure or sale” is a familiar mode of indicating suits such as are possible in connection with mortgages in the English form—suits which, though generally they would be brought in the High Court, might also be instituted in Provincial Courts. It must be remembered that in a suit for foreclosure, sale of the mortgaged property is not what the plaintiff immediately demands. His primary object is to call on the mortgagor to exercise his right of redemption now or never. Sale may be decreed in a foreclosure suit, but it is not so decreed as a matter of course, and it is generally in the interest of the mortgagor that it is decreed. The case is wholly different with a suit like the present or a suit brought by a person entitled to a charge. Then it is a sale that the plaintiff demands, his object being the recovery of money.
9. To hold that Article 132, which may be compared with Section 40 of the Statute of William IV, applies to such suits and that Article 147, serving the purpose which Sections 2 and 24 of the Statute were held to serve, applies to suits for foreclosure only, requires no strain on the language of either article, whereas, according to the contrary view, Article 147 has to be read as applying to two wholly different classes of suits. Such a construction of the article appears to me unreasonable. and in addition it has to be said against it that it increases the difficulty of explaining why the long period of sixty years should have been given.
10. For some reason it is clear the Legislature has all along thought fit to make a distinction between such suits according to the class of the Court in which they are instituted, and in effect the result of the distinction must be to favour the holder of a mortgage in the English form as compared with the holder of an ordinary hypothecation, for, generally speaking, it is only in the High Court that English mortgages have to be dealt with. It may not be easy to explain why such long periods as sixty years and thirty years are given for such latter mortgages, but it would be still less easy to explain why in the case of a mortgage in the ordinary form the mortgagee should be restricted to twelve years when suing for possession, but have five times as long a period when suing for sale of the mortgaged property. The construction, which I prefer to put on Article 147, involves no charge of inconsistency against the Legislature. They have consistently given an extended period to mortgagees’ suits in the High Court. They have been consistent in giving the uniform period of twelve years to mortgagees’ suits in other Courts. On the other hand, if the double meaning is to be assigned to Article 147, the Legislature has made a strange distinction, giving twelve years only for the mortgagees’ suit for possession and sixty years for other suits by the mortgagee. That has to be explained. and further it has to be explained why the Legislature should have altered the law at all in a direction favourable to the plaintiff. It is said that it must have been thought expedient to equalize the periods for mortgagors’ and mortgagees’ suits. No particular reason was suggested why they should be made equal, and there are reasons why greater latitude should be allowed to the mortgagor, seeking to recover his land and at the same time offering to pay off his debt, than to the mortgagee who is only prosecuting the remedies of a creditor. If the Legislature did not approve this principle, but considered that no distinction should be made between a suit by a mortgagor and a suit by a mortgagee, it might have been expected that Article 147 in the Act of 1871, which prescribes thirty years for a suit by a pledgor of chattels to recover them from his pledgee, would disappear in the Act of 1877. It is, however, reproduced in a modified form in Article 145 of the schedule.
11. It was contended that this Court was committed to a view favourable to the plaintiff owing to a series of decisions on the point. That is not the view which I take of the reported cases. In the case of Aliba v. Nanu I.L.R. 9 Mad., 218 at pp. 220-22 this Court dealing with an instrument of hypothecation held that Article 132 was applicable, distinctly overruling the contrary opinion expressed by the District Judge. In that case the learned Judges followed an earlier decision of this Court [Davani v. Batna I.L.R., 6 Mad., 417]. In the next case decided by a Full Bench the same view was taken and again stress is laid on the distinction to be made between instruments executed before and after July 1882 [Bangasami v. Muttukumarappa I.L.R. 10 Mad., 509]. Then follows Ammanna v. Gurumurthi I.L.R., 16 Mad., 64. The report does not give the text of the instrument under discussion, but it shows that the plaintiff asked for a decree for foreclosure or sale. Assuming that the instrument justified that form of prayer, the Court could hardly have hesitated to hold that Article 147 was applicable. That case, therefore, has, in my opinion, no bearing on the present. The last case is Udayana Pillai v. Senthivelu Pillai I.L.R., 19 Mad., 411. It is undoubtedly an authority in the plaintif’s favour. As far as the report shows, however, the point was not argued and anyhow the case stands by itself. It is, however, argued that in some of the cases sanction is given to the theory that in construing the Limitation Act, regard must be had to the provisions of the Transfer of Property Act. In Aliba v. Nanu I.L.R., 9 Mad., 218 at pp. 220-22, Mr. Justice MUTTUSAMI AYYAR no doubt says that, if the instrument before him had been executed after July 1882, he should have been disposed to agree with the view taken by the Allahabad High Court, and as I have already mentioned the distinction is insisted upon in the Pull Bench case [Bangasami v. Muttukumarappa I.L.R., 10 Mad., 509]. That decision being a decision of five Judges, would be conclusive in the present case, because here also the instrument was executed before the Transfer of Property Act came into force, but for the circumstance that, in the present instance, there was something beyond a mere hypothecation of the property, it was intended that the mortgagee should enjoy the usufruct. But, in my opinion, the distinction founded on the date of the instrument–a distinction which is practically disregarded by the Bombay High Court–does not merit the importance which has been attached to it. In interpreting an Act of 1877, I cannot see how a Court can properly take into account a Statute passed five years later. It may be true that a measure relating to the transfer of property was under consideration at the time when the Act of 1877 was before the Legislature; but if Judges may not, in construing an Act, legitimately refer to the debates and discussions which preceded the passing of it, how can they be justified in taking into consideration mere projects of legislation? Surely the construction which should be put upon the Act by a Court sitting after July 1882 shoud be the same as it would have been before that date, or if the Transfer of Property Act had never in fact been passed. This observation appears to me to dispose of a material part of the argument used in the Allahabad High Court [Shib Lal v. Ganga Prasad I.L.R., 6 All. 551] and adopted in Bombay [Motiram v. Vitai I.L.R., 13 Bom., 90]. When the point is concidered apart from the Transfer of Property Act and with reference to the antecedent law and the decisions on the Act of 1871, and the Statute of William IV, the construction of Article 132 appears to me to present little difficulty, Agreeing with the decision in Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730, I think the article must be applied in any case where the sale of the property mortgaged or charged is demanded and a decree for foreclosure is not admissible.
12. I would accordingly answer the question referred by saying that the case is governed by Article 132.
13. The instrument sued upon in this case is a usufructuary mortgage executed in 1879, though, as a matter of fact, possession remained with the mortgagor. The instrument contains a covenant to pay and the suit is for the sale of the mortgaged land. The mortgage money became payable in March 1882. The suit was, however, instituted in June 1894.
14. The question for determination is whether the case is governed by Article 132 or by Article 147 of the Limitation Act. If the latter article does not apply the case would, of course, fall under the former. The question is indeed a difficult one, as the conflict of decisions on the point shows. According to the Full Bench rulings of the Bombay and the Allahabad High Courts the case falls under Article 147 [Motiram v. Vitai I.L.R., 13 Bom., 90 and Shib Lal v. Ganga Prasad I.L.R., 6 All., 551]. But according to the Full Bench ruling of the Calcutta High Court, Article 132 applies [Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730]. Which of these conclusions is correct?
15. Before I proceed to discuss and answer the question I ought to observe that it is difficult to agree in the suggestion on which so much stress has been laid, viz., that the slight alteration in the language of Article 132 as compared with the corresponding article in Act IX of 1871 and the insertion of a new Article, viz., 147, were made with reference to the distinction between a charge and a mortgage which in this country was for the first time distinctly drawn in the Bill relating to transfer of property that came before the Legislative Council about the time the Limitation Bill of 1877 was under consideration. It was early in 1877 that the Transfer of Property Bill was sent by the Government of India to the Secretary of State for permission to introduce it in the Legislative Council. Leave was granted in April and the Bill was introduced in June 1877. Though the Bill had thus seen the light in the Legislative Council a few weeks before Act XV of 1877 was passed, yet then and long subsequently serious doubts were entertained, if not with reference to the part thereof relating to mortgages, at any rate generally, about the propriety of allowing the Bill to become law. (See particularly the Hon’ble Mr. Plowden’s speech–Proceedings of the Legislative Council for 1882, pages 78 to 83.) Having regard to this circumstance and the numerous and important changes which were made in the Bill during the four years that intervened between its introduction and its becoming law, one need scarcely hesitate to say that it is exceedingly unlikely that the Legislature framed Articles 132 and 147 or any other provision in the Limitation Act in reference to what was contained in a Bill which, at that time, could not have been confidently expected to become law. Further, a comparison of the provisions of the Limitation Bill of 1877 in regard to the present matter at the different stages of its progress in the Legislative Council shows beyond doubt that the suggestion under consideration is not well founded. Now, in the Bill as it stood at the time of its introduction, the article corresponding to the present Article 132 was Article 128, and the part thereof in the first column was (as in Act IX of 1871 “for money charged upon immoveable property” (see Gazette of India, Part V, page 107A In the Bill, however, as revised by the Select Commitee and submitted with their report of the 28th March 1877, the language of the article (numbered therein as 130) was altered as it now stands (lb., page 142). That the alteration thus made was treated as unimportant (which it could not have been if instead of its embracing cases of mortgagees as well as cases of charge-holders it was to be confined to the letter only) is evident by the Select Committee noticing in their report certain, alterations specially, but referring to the rest as merely verbal (lb. at pages 127 and 128). and the provision which is now Article 147 was not introduced into the Bill when the language of that which became Article 132 was amended as stated above, but was inserted later on. Moreover, at the date of that amendment the Transfer of Property Bill had not even formally come before the Council, inasmuch as the amendment was made before the end of March, while the Transfer of Property Bill was introduced only in June. As regards the insertion of the provision forming Article 147 subsequent to the amendment alluded to, that that also had likewise no connection with the Transfer of Property Bill is evident, being supported by certain cogent circumstances. These, however, it would be convenient to state later on when I deal with an argument urged as to why Article 147 was introduced. It seems, therefore, quite inadmissible to attempt to interpret the Articles in question in the light of the provisions of the Transfer of Property Bill.
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which refers to suits of the former class, expressly mentions Chartered Courts, while there is no such statement in the next article relating to suits for foreclosure or sale. But as suits by mortgagees against mortgagors for possession of mortgaged property were, of course, maintainable in the mofussil Courts as well as in Chartered Courts, and as the limitation of twelve years had by Article 135 been already prescribed for such suits in the mofussil Courts, distinct mention of Chartered Courts was necessary in Article 146. On the other hand, suits for foreclosure or sale in the alternative were before or in 1877 entirely unknown so far as the mofussil Courts were concerned, but were sustainable in the Chartered Courts only. Consequently express allusion to the forum was uncalled for in Article 147. I need scarcely observe that I have referred above to the Proceedings of the Legislative Council, bearing on the present matter, not of course for the purpose of determining the meaning of the article in question, but to meet certain arguments as to the supposed intention of the Legislature founded on considerations extraneous to the language of the Statute–arguments which found acceptance in one or two cases cited for the appellant.
17. It remains only to add that a reason may be suggested as to why the long period of sixty years was allowed for suits for foreclosure or sale. Now the mortgagees entitled to claim such relief were mostly, if not exclusively, mortgagees under mortgages in the English form, and they had at the date of the enactment in question the power to sell without the intervention of the Court. If in their case a shorter period than sixty years, say twelve years, were granted while the longer period provided in Article 148 continued to be the term given to mortgagors to redeem, that would lead to a very curious result. For as in such a case though a mortgagee of the class under consideration had omitted to sue for sale before the expiry of twelve years, and had thus lost his remedy of selling through Court, yet even subsequently there could be nothing on principle to prevent his proceeding to exercise his power of sale out of Court. This would be an anomaly which could only have been avoided by prescribing sixty years for suits for foreclosure or sale.
18. For all these reasons I am convinced that Article 147 ought to be construed in the alternative sense, and I would, in reply to the question referred for decision, say that the case is governed not by that article, but by Article 132.
19. The mortgage (Exhibit A) in this case is dated the 2nd July 1879. It purports to be an usufructuary mortgage, and it contains in addition a covenant to pay the money on a fixed date, viz., the 8th March 1882. No doubt the Courts have found that, as a fact, the mortgagor remained in possession. I do not, however, think that this circumstance is sufficient to render the transaction a mere hypothecation. The mortgagee had the right to immediate possession at any time, and there was, therefore, a transfer of an interest in the property to him. It was more than an hypothecation or a charge on the property. It was a mortgage, and, in my opinion, Article 147 of the Limitation Act is applicable.
20. It has no doubt been held by the Full Bench of the Calcutta High Court [Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730] that Article 147 refers only to what is known as an English mortgage, but this view has never been adopted either by this Court or by any other High Court in India. The contrary has been either assumed or expressly held in a long series of cases in this Court [Aliba v. Nanu I.L.R., 9 Mad., 218], Rangasami v. Muttukumarappa I.L.R., 10 Mad , 509, Ammanna v. Gurumurthi I.L.R., 16 Mad., 64, Udayana Pillai v. Senthivelu Pillai I.L.R., 19 Mad., 411. The present case is similar to Motiram v. Vitai I.L.R., 13 Bom., 90, in which Girwar Singh v. Thakur Narain Singh I.L.R., 14 Cal., 730 was fully considered and dissented from.
21. The reasoning in the Bombay case commends itself to me. I am not aware of any decision of this Court, which is inconsistent with the view that Article 147 is applicable to the case now before us.
22. In reply to the reference I would say that the suit is governed by Article 147.
23. I concur with Benson, J.

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