Case Note & Summary
The dispute concerned the enforcement of two mortgage deeds executed on June 14, 1922 and August 27, 1922 by Rajkumar Ran Bahadur Singh (mortgagor) in favour of two sets of mortgagees over certain properties in District Manbhum. The mortgagor borrowed Rs.5,500 from Rabindra Nath Chakravarty and secured it by mortgaging his shares in Mauza Bansjora and Simitanr, and also allowed recovery from Mauza Bahaldih. He later borrowed another Rs.5,500 from Sasindranath Chakravarty and Indra Nath Chakravarty under similar terms. The due date for both loans was April 14, 1925. The mortgagor subsequently assigned his interest in Mauza Bansjora on May 17, 1927 and in Mauza Simitanr on October 2, 1927. His interest in Mauza Bahaldih was sold in court auction on January 16, 1937, and possession was taken by the auction purchaser on April 7, 1937. In 1946, Manimala Devi obtained assignments of the mortgagees' rights and filed a suit for enforcement of the two mortgages by sale of mortgaged properties. She relied on endorsements of part payments dated August 16, 1934 (Rs.100) and April 1, 1937 (Rs.600) signed by the mortgagor to extend limitation. The core questions were whether Mauza Bahaldih had been mortgaged under the deeds; whether part payments by the mortgagor after he had assigned his interest could extend limitation under Section 20 of the Limitation Act, 1908; and whether the right conferred by Section 68 of the Transfer of Property Act, 1882 was a right to enforce the mortgage or merely a personal right to sue for mortgage money or compensation, and which limitation article applied. The appellant contended that Bahaldih was included in the mortgage, that part payments extended limitation, and that dispossession of the mortgagees from Bahaldih in 1937 furnished a fresh cause of action. The respondents argued that Bahaldih was not mortgaged, that the mortgagor had no remaining interest at the time of part payments so they could not extend limitation, and that dispossession was not pleaded. The Supreme Court first held that the High Court erred in concluding only properties A and B were mortgaged; the mortgage deed's clauses and schedules made Bahaldih also security. However, on limitation, the Court held that a mortgagor whose equity of redemption has been transferred is not a 'person liable to pay the debt' within the meaning of Section 20 of the Limitation Act. Consequently, part payments made by such a mortgagor after assignment did not extend limitation. The Court relied on Pavai v. Palanivela Goundan. It further held that Section 68 of the Transfer of Property Act did not confer a right to enforce the mortgage; it only allowed the mortgagee to sue for the mortgage money on the personal covenant or to claim compensation when deprived of security. A suit for personal covenant was governed by Article 116 of the Limitation Act, 1908 and a suit for compensation by Article 120, following Unichaman v. Ahmed. Since the plaintiff's suit was for enforcement of mortgages and was filed more than twelve years after the due date without valid extension, it was barred by limitation. The Supreme Court dismissed the appeal, holding that although Bahaldih was mortgaged, part payments by the mortgagor after losing his interest did not extend limitation, and the suit for enforcement of mortgages was barred by limitation. The High Court's dismissal of the suit was upheld.
Headnote
A) Limitation Law - Part Payment - Section 20 Limitation Act, 1908 - A mortgagor who transferred his equity of redemption is not a 'person liable to pay the debt' within the meaning of Section 20; part payment by such mortgagor after transfer does not extend limitation - The mortgagor had assigned his interest in Mauzas Bansjora and Simitanr and his interest in Mauza Bahaldih was sold in court auction before the part payments; the Supreme Court held that part payments could not extend limitation against the assignee/purchaser, following Pavai v. Palanivela Goundan - Held that the suit for enforcement of mortgage was barred by limitation (Paras Not mentioned). B) Transfer of Property - Mortgagee's Right on Deprivation of Security - Section 68 Transfer of Property Act, 1882 - Right conferred by Section 68 is not a right to enforce the mortgage but a right to sue for mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of security - Suit for enforcement of personal covenant governed by Article 116 Limitation Act, 1908; suit for compensation governed by Article 120; following Unichaman v. Ahmed - Held that the plaintiff's suit as framed for enforcement of mortgages could not be converted into a suit for compensation or personal covenant (Paras Not mentioned). C) Mortgage Law - Interpretation of Mortgage Deed - Clauses and Schedules of Mortgage Deed - Whether Mauza Bahaldih was included in mortgage security - The High Court erred in holding that only Mauzas Bansjora and Simitanr were mortgaged; the mortgage deed allowed recovery by sale of properties in Schedules (ka) and (kha), which included Mauza Bahaldih, thus Bahaldih was mortgaged - Held that Bahaldih was part of mortgaged properties (Paras Not mentioned). D) Limitation Law - Extension by Part Payment - Applicability of Section 20 Limitation Act, 1908 - For part payment to extend limitation, the payer must be a person liable to pay the debt at the time of payment; once the mortgagor has parted with all interest in mortgaged property, subsequent part payment by him is ineffective - The part payments of Rs. 600 on April 1, 1937 and Rs. 100 on August 16, 1934 were made after the mortgagor had lost his interest in the properties, hence could not extend limitation - Held that the suit was barred by limitation (Paras Not mentioned).
Issue of Consideration
Whether Mauza Bahaldih was mortgaged under the two mortgage deeds; whether part payments made by the mortgagor after assignment of his interest extended the period of limitation under Section 20 of the Limitation Act, 1908; whether the right conferred by Section 68 of the Transfer of Property Act, 1882 is a right to enforce the mortgage or merely a right to sue for mortgage money or compensation, and which limitation articles applied.
Final Decision
Supreme Court dismissed the appeal, holding that the High Court erred on the issue of whether Bahaldih was mortgaged (it was mortgaged), but the suit was barred by limitation because part payments by the mortgagor after he assigned his interest did not extend limitation under Section 20 Limitation Act, 1908; Section 68 Transfer of Property Act conferred only a right to sue for personal covenant/compensation, not to enforce mortgage, and such claims were also barred. The High Court's dismissal of the suit was upheld.
Law Points
- A mortgagor whose interest in the equity of redemption 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
- 1908
- part payment by such mortgagor after transfer will not extend limitation
- the right conferred by Section 68 of the Transfer of Property Act
- 1882 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
- suit for enforcement of personal covenant is governed by Article 116 of the Limitation Act
- suit for compensation is governed by Article 120 of the Limitation Act
- 1908.
