Narayan Nanda vs Sankar Sahu

S. Acharya, J.—The Defendant has preferred this appeal against the judgment and decree of the Additional District Judge, Dhenkanal In Money Appeal No. 7 of 1970 confirming the judgment and decree passed by the Subordinate Judge. Dhenkanal in Money Suit No. 12/4 of 1986/69.

According to the Petitioner the Defendant who was in good relationship with him asked for Rs. 500/- on 10-7-1963 and executed a plain paper document Ext. 1(a) stipulating therein that he would mortgage some of his properties with the Petitioner from which the latter would get payment of the interest for the aforesaid amount advanced to the Defendant. The Petitioner was not given possession of the said land and none of the terms of the agreement on which the said money was taken was given effect to by the Defendant. Again on 10-9-1965 the Petitioner advanced another sum of Rs. 300/- to the Defendant on the latter executing a registered mortgage bond, Ext. 2, acknowledging therein the loan of Rs. 300/- and also the previous loan of Rs. 500/-. all told for Rs. 800/- and mortgage some properties as specifically mentioned in Ext. 2. As in spite of demands the Defendant did not repay the said loan with interest the Petitioner instituted the suit on 11-9-1968 for the realisation of the principal sum of Rs. 800/- together with interest, all told Rs. 1088/-, and for future interest till its realisation.

The Defendant in his written statement admitted execution of Exts. 1 and 2, but he alleged that those documents were without consideration. His case is that the Petitioner acted as a bailor for him and his field servant in a criminal case and on that occasion and on that account the Petitioner took the said document from the Defendant. It is averred by the Defendant that as no consideration passed under the said document he is not liable to pay the amount mentioned in Ext. 2. The Defendant also pleaded that the Petitioner was a regular money lender and his claim was barred by limitation.

The trial Court found that it was not proved that the Petitioner was a regular money lender and so the suit was not bit by the provisions of the Orissa Money Lenders Act. It also held that as the Petitioner and Defendant were in good relationship with each other the Petitioner actually advanced a sum of Rs. 500/- on 10-7-1963 and Rs. 300/- on 9-9-1965 and the said loans were acknowledged by the Defendant by executing the registered document Ext. 2 on 10-9-1965, and so the Defendant was liable to pay the said loan taken by him from the Petitioner. The trial Court also found that the Petitioner was entitled to get a personal decree against the Defendant for the realisation of the said amount. On the above findings the trial Court in the operative portion of its judgment ordered that the suit be decreed on contest for Rs. 1088/- with costs and advocate's fee at the contested scale.

In appeal by the Defendant the finding of the trial Court to the effect that the Petitioner was entitled to a personal decree against the Defendant and that the Petitioner was not a regular money lender were challenged, but the Court below on both these questions confirmed the said findings of the trial Court. The other findings of the trial Court were not challenged. On behalf of the Appellant it was, however, contended that the suit was barred by limitation but that contention also on various considerations was negatived. On the above finding and conclusions the appellate Court confirmed the judgment and decree passed by the trial Court.

It is urged by Mr. Das. the learned Counsel for the Defendant-Appellant, that the finding of the Court below that the suit is within time is misconceived and bad in law. According to Mr. Das the cause of action stated in the plaint was 10-9-1965, i.e. the date of the execution of Ext. 2, and so the Petitioner should have brought the suit within 3 years from the said date. Mr. Das contends that as according to the Petitioner himself the cause of action for the suit arose on 10-9-1965, he should have instituted the suit within 5 years from the said date if he wanted a personal decree against the Defendant for the realisation of the said dues; and he having not done so the suit is clearly barred by limitation.

Mr. Mohapatra, the learned Counsel for the Petitioner Respondent, contends that the cause of action for the suit actually arose only on 10-9-1968 and not on 10-9-1965, as the Petitioner could not have instituted this suit within 3 years of the execution of Ext. 2, because of the fact that the Defendant had the option to payoff the said loan amount on any day within 3 years of the date of the execution of Ext. 2, as specifically stipulated in that document. On a careful perusal of Ext. 2 it is quite evident that the Defendant was free to pay up the said loan on any day within the said period of 3 years, and he could do so even on the last day of that j years. So the Petitioner could not have demanded repayment of the loan from the Defendant on any day within that period of 3 years. The said amount therefore could be demanded from the Defendant only on the last day of the said 3 years or on any day after the expiry of the said 3 years and within the prescribed period of limitation. That being so, an the failure of the Defendant to repay the loan till the last day of the said three years it was possible for the Petitioner only thereafter to demand repayment of that money and to institute this suit for that purpose, and he in fact instituted the suit on 11-9-1968, i.e. only one day after the expiry of the said 3 years.

Mr. Mohapatra concedes that due to an inadvertent mistake it was mentioned in the plaint that the cause of action for the suit arose on 10-9-1965. He submits that much weight should not be put on the above incorrect statement in the plaint as the cause of action for a suit of this nature would depend on and would be ascertained from the facts and circumstances of the case and not merely on the formal statement to that effect made in the plaint. There is enough force in the above contention and submission of Mr. Mohapatra. The phrase "cause of action" has not been defined in the Code of Civil Procedure. In Re: D. Lakshminarayana Chettiar and Another, , it has been said that "cause of action" means the bundle of essential facts which is necessary for the Petitioner to prove before he can succeed in the suit. Bretts J. defined it in Cooke v. Gill (1873) 8 C.P. 107 (ZI), to mean "every fact which is material to be proved to en title the Petitioner to succeed, every fact which the Defendant would have a right to traverse." In Ed. Khalil Khan and Anr. v. Mahaboob Ali Mian and Ors. AIR 1942 All. 122, it has been said that the expression "cause of action" means the circumstances forming the infringement of the right or the immediate occasion for the action. In its wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but the infraction coupled with the right itself ... in other words it means the whole bundle of material and essential facts which it is necessary for the Petitioner to prove in order to entitle him to succeed in the suit," Therefore nothing turns out if by mistake at one particular place in the plaint it is incorrectly stated that the cause of action for the suit arose on a particular day though on the whole bundle of material and essential facts it is seen that the came of action really arose on any other date. As the cause of action for the suit has to be seen from the necessary conditions (or the maintenance of the suit and that has to be ascertained from the whole bundle of material and essential facts In the suit, mistaken statement in the pleadings regarding the cause of action for the suit cannot affect the main tainability of the suit. Mistakes to that effect may occur due to various reasons but the fate of the case cannot be determained solely on the mere appearance of a mistake of such a nature. No prejudice has been pleaded or urged due to the above mistake in the statement of cause of action. Question of limitation on that ground was never taken at the trial stage and no issue was framed on this point. Only at the first appellate stage this question was urged. On the facts and circumstances of the present case as stated above the cause of action for the suit clearly arose on and from 10-9-1968. So the suit having been instituted en 11-9-1968, only one day after the breach, it was clearly within time.

Mr. Das further contended that as per the stipulation in Ext. 2, the personal liability of the Defendant to pay up that loan existed only upto 3 years of the execution of Ext. 2, and thereafter the Defendant had no personal liability to repay that loan, and the Petitioner thereafter was entitled to recover the loan by filing a suit on the mortgage and by putting the said property into auction as specifically stipulated therein. There is no weight also m this submission of Mr. Das. As per Clause (a) of Section 68(1) of the Transfer of Property Act, the mortgage has a right to sue the mortgagor for the mortgage money when the mortgagor binds himself to repay the same. A suit under Clause (a) is a suit to enforce the personal covent express or implied in the mortgage. In a simple mortgage, as in this case, the mortgagee has the right u/s 68(1)(a) to sue for a personal decree while maintaining his security intact, but in a fit case the Court may at its discretion invoke the provisions of Sub-section 2 of the said section. A loan prima facie involves a personal liability, and that is more true in the case of a simple mortgage as in the present case. In Sochet Singh v. Hadayat Ullah AIR 1932 Lab. 630 at page 632 it was held that as the mortgage was a simple one it must be held to carry with it the personal covenant to pay the principal and interest on the principle embodied in Section 68(1)(a) of the Transfer of Property Act. In the case reported in Nityananda Ghose Vs. Rajpur Chhaya Bani Cinema Ltd., , it has been held that the personal covenant to pay the mortgage money must be presumed to exist in all mortgages unless there is something in the nature or terms of the mortgage to negative it. In Ext. 2 there is a promise by the Defendant to repay the loan, and there is nothing in that document to justify the Court to held that the parties agreed that the personal liability of the Defendant should be treated as extinguished after the expiry of the aforesaid 3 years'' period within which the Defendant was free to repay the loan any day he liked and the Petitioner was not entitled to demand payment of the same till the end of the said period. As the extinguishment of personal liability has not been clearly stated in Ext. 2 and there is a promise in the said document to repay that amount, I am of the view that the person liability of the Defendant to repay that loan continues, and the Petitioner can sue the Defendant for the recovery of the loan personally from the Defendant. Moreover, where there is a personal covenant which the mortgage is entitled to enforce, the mere fact that he could also proceed to sue on, the mortgage and get satisfaction of his loan by putting the property to sale does not debar the mortgagee from recovering the debt personally from the mortgagor. As the money was not repaid within the 3 years period as stipulated in Ext. 2, and the cause of action for the suit arose on and from 10-9-1968 as stated above, the Petitioner was within his rights to institute this suit within 3 years from the said date as per Article 55 of the Limitation Act. That Article is applicable to such a suit and the limitation commences from the date of the breach of the stipulation for repayment. See State of Orissa Represented by the Collector Puri v. Narendra Kumar Rourtray and Anr. 1972 (1) C.W.R. 331.

On the above considerations the findings of the Court below that this suit instituted on 11-9-1968 is within the prescribed period of limitation and the Defendant is personally liable to pay the decretal amount are perfectly correct.

The other findings of the Courts below were not challenged at the hearing of this appeal.

I, therefore, do not find any merit in this appeal and it is accordingly dismissed with costs.