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1944 Supreme(SC) 15
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT SANKEY, LORD THANKERTON AND SIR MADHAVAN NAIR.
BATEY KRISHNA - Appellant
Versus
PARSOTAM DAS - Respondents
On appeal from the High Court at Allahabad.
Decided On : June. 12. 1944.
Solicitors for appellant:T. L. Wilson & Co. Solicitor for respondents: Harold Shephard.
A decree in a foreclosure suit declaring the priority of a party who paid off prior mortgagees creates a charge in favor of that party. The limitation period for enforcing this charge begins from the date of the decree, as the subrogated rights merge into it.
Headnote:(A) Indian Limitation Act, 1908 - Article 132 - Suit to enforce payment of money charged upon immovable property - Period of limitation is twelve years from when the money becomes due - Where a decree in a foreclosure suit declares the priority of a party who has paid off prior mortgagees, such a decree creates a charge in favor of that party - The period of limitation for enforcing the charge begins to run from the date of the decree, rather than from the date of the original payment or subrogation.
Facts of the case:
A party paid off prior mortgagees to prevent the sale of certain properties. In a subsequent foreclosure suit brought by other mortgagees, the trial court declared that the party who had paid off the prior mortgagees held priority charges over the properties. A decree was passed to this effect. The party later instituted a suit to recover the sums by enforcing the charge. The lower courts dismissed the suit, holding it was barred by limitation on the grounds that the charge existed prior to the decree and the twelve-year period had already expired.
Findings of Court:
The rights obtained by the party through subrogation merged into the decree passed in the foreclosure suit. The final decree in the foreclosure suit created a charge in favor of the party, and therefore, the suit to enforce said charge was within the prescribed period of limitation.
Issues: Whether a decree passed in a foreclosure suit, which declared the priority of a party who had paid off prior mortgagees, created a charge in favor of that party or merely declared an existing one, and consequently, when the period of limitation for enforcing the charge began to run.
Ratio Decidendi: When a party is subrogated to the rights of prior mortgagees and those rights are judicially determined and incorporated into a decree in a foreclosure suit, the subrogated rights merge into the decree. Such a decree creates a charge in favor of the party, and the limitation period for enforcing that charge commences from the date of the decree.
Result: Appeal allowed.
Legal Category Hierarchy
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property law
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mortgages
- subrogation
- foreclosure
- charges on immovable property
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mortgages
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practice and procedure
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limitation
- indian limitation act
- calculation of limitation period
-
decrees
- effect of decrees
-
limitation
Judgement
Appeal (No. 24 of 1943) from a decree of the High Court (April I, 1937), which affirmed a decree of the Subordinate Judge of Cawnpore (September 5, 1932) dismissing the plaintiffs (appellants) suit.
The following facts are taken from the judgment of the judicial Committee the suit out of which the appeal arose was brought to recover a sum of Rs. 45,765-6-3 as a charge against the properties specified in the plaint in the circumstances mentioned below. The plaintiff died during the pendency of the appeal in the High Court, and by an order of the court, his son, the appellant before the Board, was brought on the record in his place. The sole question for decision was whether the suit was barred by limitation. The provision of the Indian Limitation Act (IX. of 1908) applicable was art. 132, which prescribed a period of " twelve years " for a suit " to enforce " payment of money charged upon immovable property," and time began to run " when the money sued for becomes due." The properties in the suit, numbering seven villages, belonged to one Musammat Baktawar Begum. On February 11, 1909, she mortgaged them for Rs. 5,000 to Syed Abid Husain. The money became payable by her on February 10, 1912. On July 27, 1910, she sold an eight annas share in four of the seven villages to Indar Prasad, the brother of the plaintiff, Jagmohan Das. By a partition of the joint family property of the plaintiffs family the plaintiff became the owner of a seven annas share in the said villages. On March 12, 1915, Musammat Baktawar Begum executed a mortgage of the remaining eight annas share of the four villages mentioned above, and of the three entire villages, in favour of Parsotam Das, respondent No. 1, and Jugal Kishore, the father of respondent No. 2. Syed Abid Husain instituted a suit on his mortgage of February 11, 1909, and obtained, on July 24, 1915, a decree for sale in respect of the properties mortgaged to him. To save them from being sold in execution of the decree, the plaintiff paid Abid Husain, on June 19, 1917, the decretal sum of Rs. 6,151-13-0. On June 22, 1915, Musammat Baktawar Begum had executed a mortgage of the above properties in favour of Ganga Dhar and Gobardhan Das. The money under the bond became due on June 21, 1918. The plaintiff redeemed that mortgage by paying the mortgagees Rs. 4,552 on April 3, 1917. On that date Musammat Baktawar executed a further mortgage in favour of one Girdharilal, who was a benamidar for the plaintiff.
The dispute between the parties to the suit now under appeal related to the two sums paid by the plaintiff to Abid Husain, and Ganga Dhar and Gobardhan Das, respectively. Jugal Kishore and Parsotam Das (father of respondent No. 2, and respondent No. 1) as subsequent mortgagees instituted in the court of the Subordinate Judge of Mohanlalgang, Lucknow, suit No. 13/39 of 1927, for foreclosure on the basis of the mortgage dated March 12, 1915, and three other deeds which had been executed by Musammat Baktawar Begum mortgaging the properties in the seven villages referred to above. Jagmohan Das, the plaintiff in the present suit, and his brother Indar Prasad, were defendants 3 and 4 in the said suit. Issue No. 3 in the suit was, " To what extent are " defendants Nos. 3 and 4 entitled to priority against the " deeds in suit ? " The Subordinate Judge decided the suit in favour of the plaintiffs. The judgment concluded as follows " The foreclosure will be subject to a declaration of the " following rights and charges of defendant No. 3 in respect of " which he has priority over the plaintiffs.
"(A)-------
“(B) A charge of Rs. 6,151-13-0 or for such lesser amount, " if any, as may be found due to defendant No. 3 in respect " of the deed dated April 3, 1917.
"(C) A charge of Rs. 4,542, or for such lesser amount, if " any, as may be found due to defendant No. 3 in respect of " the deed dated April 3, 1917.
"Charges (B) and (C) operate in respect of 16 annas share " in three villages, 8 annas share i
