Back
1937 Supreme(SC) 53
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD MACMILLAN, SIR SHADI LAL, AND SIR GEORGE RANKIN.
PRADYUMNA KUMAR MULLICK - Appellant
Versus
KUMAR DINENDRA MULLICK - Respondents
On appeal from the High Court at Calcutta.
Decided On : June. 4. 1937.
Solicitors for appellant :Douglas Grant & Dold. Solicitors for respondents: A. J. Hunter & Co.
A private agreement cannot expand a court decree's scope. A new mortgage creating distinct rights is an independent transaction, not a decree adjustment. A written acknowledgment of liability extends the limitation period for recovery suits under the Indian Limitation Act.
Headnote:(A) Indian Limitation Act, 1908 - Section 19 - Code of Civil Procedure, 1908 - Order XXXIV, r. 6, Order XXI, r. 2 and Section 47 - Acknowledgment of liability - Suit for recovery of money on personal covenant in mortgage deed - A conveyance reciting that a sum be set off against dues and acknowledging a balance due operates as an acknowledgment of liability under Section 19 of the Indian Limitation Act, thereby extending the limitation period for instituting a suit. (Paras 1, 15)
(B) Code of Civil Procedure, 1908 - Scope of Decree - Parties cannot by private agreement add to a court decree something not included in the original claim or confer jurisdiction on the court to enforce a claim not embodied in a decree. (Paras 10, 11)
(C) Order XXI, r. 2 - Adjustment of Decree - A mortgage deed that creates new rights, conveys additional security, and provides for a higher rate of interest is an independent transaction and not an adjustment of a decree for sale. (Paras 12, 13)
(D) Estoppel and Res Judicata - The dismissal of an application for a personal decree under Order XXXIV, r. 6 on the grounds of limitation does not bar a subsequent suit on the personal covenant of a mortgage, nor does it create an estoppel if the other party has not changed their position to their detriment. (Paras 14, 15)
Facts of the case:
Mortgagors executed a mortgage to secure a loan, leading to decrees for sale. A third party discharged the debt and advanced additional funds, receiving an assignment of the decrees and a new mortgage deed. The new deed included a clause allowing the mortgagee to treat the new debt as part of the original decree. After partial recovery through sales, the mortgagee first applied for a personal decree under the Code of Civil Procedure, which was dismissed for limitation. Subsequently, a suit was filed to enforce the personal covenant of the second mortgage.
Findings of Court:
The court found that the mortgage deed was properly registered. The clause attempting to modify the court decree was legally unenforceable. The mortgage was an independent transaction and not an adjustment of the decree. The suit was not barred by res judicata or estoppel. Finally, the suit was within the limitation period due to an acknowledgment of liability in a subsequent conveyance.
Issues: Whether a private agreement can expand the scope of a court decree; whether a new mortgage constitutes an adjustment of a decree under Order XXI, r. 2 of the Code of Civil Procedure; and whether a prior failed application for a personal decree bars a subsequent suit on a personal covenant.
Ratio Decidendi: Private parties cannot modify a court decree to include claims not originally adjudicated. A transaction creating new rights and obligations is a separate contract, not a decree adjustment. The failure of one legal remedy does not preclude the pursuit of another valid remedy. A written acknowledgment of debt resets the limitation period under the Limitation Act.
Result: Appeal allowed, decree of the Court of Appeal reversed, and that granted by the trial Court restored.
Legal Category Hierarchy
-
practice and procedure
-
civil procedure
-
execution of decrees
- adjustment of decree
- jurisdiction of executing court
-
mortgage suits
- personal decree
-
legal bars
- res judicata
- estoppel
-
execution of decrees
-
civil procedure
-
property law
-
mortgages
- personal covenants
- registration
-
mortgages
-
limitation law
- acknowledgment of liability
Judgement
Appeal (No. 74 of 1935) from a decree of the High Court in its appellate jurisdiction (June 21, 1934) which reversed a decree of the High Court in its ordinary original civil jurisdiction (May 25, 1933).
This appeal involved the question whether the appellant was entitled to a decree for money based on the covenants in an indenture of mortgage, dated June 27, 1924, and whether a conveyance, dated March 14, 1928, by which the respondent Kumar Dinendra Mullick conveyed to the appellant certain of the mortgaged properties for the price of Rs.45,000 operated as an acknowledgment of liability and satisfied the requirements of s. 19 of the Indian Limitation Act (IX. of 1908), so as to prevent the suit being barred by limitation. The conveyance recited (inter alia) " And whereas the vendor did on the 13th January, 1928, contract with the purchaser for the absolute sale to him of the said .... premises 24 and 25, Upper Chitpore Road, free from encumbrances at or for the price of Rs.45,000 which is to be set off against the balance of the purchasers dues from the vendor and the estate of Kumar Ganendra Mullick, deceased, .... under the said Indenture of Additional security bearing date the 27th day of June, 1924, And Whereas over two lakhs of rupees are now due from the vendor and the estate of the said Kumar Ganendra Mullick deceased to the .... purchaser as aforesaid. Now this Indenture witnesseth that in consideration of the said sum of Rs.45,000 by the direction of the vendor credited to the vendor and the estate of the said Kumar Ganendra Mullick deceased by the purchaser in the account of monies due under .... the said Indenture of Additional security, .... the vendor doth hereby grant transfer and convey unto the purchaser,” etc.
The other facts appear from the judgment of the Judicial Committee.
Buckland J., who tried the suit, held that the appellant was entitled to a personal decree on the mortgage deed in his favour.
On appeal a Division Bench (Costello and Lort-Williams JJ.) dismissed the suit. The appeal is reported at ( 1934) I. L. R. 62 C. 28.
1937. April 22, 23. L. P. E. Pugh K.C. and T. B. W. Ramsay for the appellant. There are two distinct debts by covenant in the two deeds, and two distinct mortgage obligations. A mortgagee can pursue all or any of his remedies, either separately in different suits or together in one suit at his option Halsburys Laws of England, 2nd ed., vol. 23, p. 420. The attempt to alter the first decree by adding terms to the decree was misconceived and was bound to fail, but the fact that the mortgagee tried to pursue a course which he was not entitled to take cannot prejudice him when he pursues a proper remedy, as he is now doing. The point as to estoppel is not sustainable, for it is not suggested that any one has altered his position relying on a representation. Sect. 47 of the Civil Procedure Code does not apply, because the first suit had been completely disposed of and nothing more could be done in that suit. There can be no question of res judicata because the present claim has never been put forward in any prior suit, and could not have been, because it did not exist at the time when the former suit was filed.
30 Law. Rep. 64 Ind. App. 302 ( 1936- 1937) Pradyumna Kumar Mullick V. Kumar Dinendra Mullick
132
Dunne K.C. and J. M. Pringle for the respondents. The suit is barred by limitation, having been instituted more than six years from the date of the mortgage deed of 1924. There was no acknowledgment of liability within the requisite period.
Pringle followed. If a plaintiff proceeds on the security, and does not ask for relief on the personal covenant, he cannot bring a separate suit afterwards on the personal covenant. He may bring a suit on the personal covenant first, and then sue on the security, but the converse is not allowed. [Reference was made to Kishan Narain v. Pala Mai . (( 1922) L. R. 50 I. A. 115, 117.)]
June 4. The judgment of their Lordships was delivered by
