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1921 Supreme(SC) 86
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCKMASTER, LORD CARSON, SIR JOHN EDGE, MR. AMEER ALI, AND SIR LAWRENCE JENKINS.
MUHAMMAD HAFIZ - Appellant
Versus
MUHAMMAD ZAKARIYA - Respondents
On Appeal from the High Court at Allahabad.
Decided On : November 17, 1921.
Solicitor for appellants: H. S. L. Polak.
Under Order II, Rule 2 of the Civil Procedure Code, 1908, a plaintiff must include the entire claim arising from a single cause of action in one suit; failure to do so bars subsequent proceedings for the remaining portion of that claim.
Headnote:(A) Civil Procedure Code, 1908 - Order II, Rule 2 - Suit for recovery of interest and principal under mortgage - Requirement to include the whole claim in respect of the cause of action - If a plaintiff is entitled to a larger relief based on the same cause of action but limits the claim to a smaller portion, they cannot subsequently sue for the balance.
(B) Cause of action - Definition and effect - The cause of action is the foundation of the suit; if it enables a party to ask for wider relief than that to which the claim is limited, the balance cannot be recovered by independent proceedings.
Facts of the case:
A mortgage deed provided that if interest remained unpaid for six months, the creditor could sue for the unpaid interest or for both principal and interest. Additionally, after three years, the creditor could sue for the entire amount. The creditor instituted a suit only for the interest due. A decree was passed, which erroneously implied that payment of the interest would result in the retransfer of the property free from the mortgage. Subsequently, the creditor filed a second suit for the recovery of the principal and accrued interest. The defendant contended that this suit was barred by Order II, Rule 2 of the Code of Civil Procedure, 1908.
Findings of Court:
The court held that the cause of action for the first suit—whether based on the six-month default of interest or the expiration of the three-year period—entitled the plaintiff to seek the realization of the entire security. By electing to pursue only the interest, the plaintiff was precluded from later seeking the principal based on the same cause of action.
Issues: Whether a subsequent suit for the recovery of the principal amount of a mortgage is barred by Order II, Rule 2 of the Code of Civil Procedure, 1908, when a previous suit was instituted only for the recovery of interest based on the same cause of action.
Ratio Decidendi: The court ruled that Order II, Rule 2 requires every suit to include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action. Since the non-payment of interest and the lapse of the fixed term provided a cause of action for the entire debt, the plaintiff could not split the claim into two separate suits.
Result: Appeal dismissed.
Legal Category Hierarchy
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practice and procedure
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civil procedure
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pleadings
- order ii rule 2 (splitting of claims)
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pleadings
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civil procedure
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property law
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mortgage
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simple mortgage
- realization of security
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simple mortgage
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mortgage
Judgement
Appeal (No. 27 of 1920) from a judgment and decree (May 2, 1917) of the High Court reversing a decree of the Subordinate Judge of Agra.
The suit was brought in January, 1915, by the appellants and the respondents other than the first named respondent to recover Rs. 14,000 principal and Rs.3010 interest due under a mortgage bond dated September 14, 1910. They had in March, 1914, sued for the interest then due under the mortgage, and had obtained a decree. The defendants (now represented by the first respondent) pleaded that the suit could not be maintained having regard to Order n., r. 2, of the Civil Procedure Code, 1908. The material provisions of the deed, and the facts of the case, appear from the
2 Law Rep. 49 Ind. App. 9 ( 1921- 1922) Muhammad Hafiz V. Muhammad Zakariya
303
judgment of the Judicial Committee.
The Subordinate Judge made a decree in favour of the plaintiffs, but that decree was set aside on appeal to the High Court. The learned judges (Piggott and Walsh JJ.) were of opinion that the suit was barred by Order n., r. 2, which provides that " every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action." They said that in the earlier suit which had been undefended the plaintiffs had not clearly stated that they claimed to have a right to sue for the principal at a subsequent date, and that the plaintiffs had taken a decree for a sale of the property not for a sale subject to the debt. The appeal of the High Court is reported at I. L. R. 39 A. 506.
1921. Nov. 17. S. Hyam for the appellants. The High Court misconstrued the effect of the clauses of the deed. By the deed the plaintiffs had after three years two distinct and separate causes of action. The cause of action in the first suit was by the terms of the plaint strictly limited to the right to recover interest. The terms of the deed made Order n., r. 2, inapplicable. The plaint in the first suit gave the defendants clear notice that the right to sue for the principal was reserved under the terms of the deed. [Reference was made to Brunsden v. Humphrey (( 1884) 14 Q. B. D. 141.) ; Read v. Brown (( 1888) 22 Q. B. P. 128.) ; Pramada Dasi v. Lakhi Narain Mitter (( 1885) I. L. R, 12 C. 60.) ; and to the cases referred to in the judgment of their Lordships.]
The respondents did not appear.
The judgment of their Lordships was delivered by
LORD BUCKMASTER. In this appeal their Lordships have not had the advantage of hearing counsel for the respondents, but owing to the full and able argument of Mr. Hyam they have been placed in complete possession of the facts.
The appeal arises out of a mortgage suit. The appellants and the second, third and fourth respondents represent together the mortgagee. The first respondent was himself one of the mortgagors and represents the other. The mortgage deed in question was executed on September 14, 1910, and was a simple mortgage but it took an unusual form. It created security for the repayment to the mortgagees of Rs. 14,000 principal and interest at the rate of 8 annas per cent, per month, it then provided by clause 2 that the interest should be paid on the bond as each month went by, and that if the interest was not paid for six months, the creditor should be competent to realize only the unpaid amount of interest duo to him, or the amount of principal and interest both by bringing a suit in Court without waiting for the expiration of the time fixed, and that the mortgagors should take no objection to such proceedings. The time fixed was that mentioned in clause 7. which provided that if the amount secured by the bond, with interest, should not be paid after the expiration of three years, the creditor should be entitled to realize by bringing a suit for the whole of the amount of the principal and interest, together with other incidental expenses, and again the clause concluded by provision that the mortgagors should have no objection, and, if they took ob
