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1919 Supreme(SC) 13
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT HALDANE, VISCOUNT CAVE, LORD DUNEDIN, SIR JOHN EDGE, AND MR. AMEER ALI.
RAJA SETRUCHERLA RAMABHADRA RAJU - Appellant
Versus
MAHARAJA OF JEYPORE - Respondents
On Appeal from the High Court at Madras.
Decided On : Feb. 25. 1919.
Solicitor for appellants:Douglas Grant. Solicitors for respondent: T. L. Wilson & Co.
A mortgage clause allowing recovery of "the said amount" upon interest default permits acceleration of the entire debt. Furthermore, courts subject to the Code of Civil Procedure lack jurisdiction to order the sale of land in scheduled districts where the Code is expressly excluded.
Headnote:(A) Code of Civil Procedure, 1908 - Sections 1(3), 17, and 21 - Act XXIV of 1839 - Mortgage - Recovery of principal and interest - Interpretation of mortgage clauses - A clause providing that if yearly interest is not paid, the lender may recover "the said amount" then and there without waiting for the due date, is interpreted as giving the lender the power to recall the entire loan, including the principal, rather than merely a power of sale for interest in arrears.
(B) Code of Civil Procedure, 1908 - Section 17 - Jurisdiction - Where a suit is brought for relief respecting immovable property situated within the jurisdiction of different courts, the provision allowing the suit to be instituted in any court where a portion of the property is situated applies only to courts to which the Code applies - An order for sale of land situated in a scheduled district where the Code is excluded is a nullity for want of jurisdiction.
(C) Code of Civil Procedure, 1908 - Section 21 - Objection to jurisdiction - An objection regarding the total absence of jurisdiction over a specific territory is not an objection as to the "place of suing" and is not barred by the requirement that such objections be taken in the court of first instance.
Facts of the case:
The appellants borrowed a sum of money and mortgaged lands as security. A subsequent mortgage extended the due date for the principal but included a clause allowing the lender to recover "the said amount" if yearly interest was not paid. Upon default of interest, the respondent sued for the entire sum and an order for sale of the mortgaged properties. Some of the lands were situated in a scheduled district where the Code of Civil Procedure was excluded. The lower courts granted the decree for sale, with the appellate court noting the suit for principal was initially premature but valid by the time of the appeal.
Findings of Court:
The suit for the whole sum was not premature as the mortgage clause allowed for the acceleration of the entire debt. However, the order for sale of lands located in the scheduled district was invalid due to a lack of jurisdiction.
Issues: Whether the suit for the whole sum was premature based on the construction of the mortgage deed, and whether the court had jurisdiction to order the sale of land situated in a scheduled district.
Ratio Decidendi: The court held that the most natural interpretation of the clause allowing recovery of "the said amount" upon interest default was to allow the lender to recall the entire loan. Regarding jurisdiction, since the Code of Civil Procedure is excluded from scheduled districts, any order for sale made under the Code regarding such lands is a nullity. Section 17 of the Code only applies to courts subject to the Code, and Section 21 does not apply to objections based on a total lack of jurisdiction.
Result: Decree varied by deleting the order for sale so far as applicable to the lands situate within the scheduled district.
Legal Category Hierarchy
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practice and procedure
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jurisdiction
- scheduled districts
- place of suing
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jurisdiction
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property law
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mortgages
- simple mortgage
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enforcement of mortgage
- interest and default
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mortgages
Judgement
Appeal from a judgment and decree of the High Court (March 3, 1916), affirming a decree of the Subordinate Judge of Vizagapatam.
The suit was brought by the respondent in the Court of the Subordinate Judge of Vizagapatam to enforce a mortgage over land which was situate partly in the district of Vizagapatam and partly within the district, commonly known as the Agency Tracts, which by Act
XXIV. of 1839 is a scheduled district.
The facts and the effect of the decisions in India appear from the judgment of their Lordships.
1919. Feb. 13, 14. Sir William Garth for the appellants. The High Court rightly held that upon the true construction of the mortgage deed of July 4, 1911, the principal was not due until January 4, 1916. The respondent not being entitled at the date of the suit to sell the property for the principal, the High Court wrongly held that the decree for sale could stand. The rights of the parties in a suit depend solely upon the position at the date of the plaint Evans v. Bagshaw (( 1870) L. R. 5 Ch. 340.); Buys v. Royal
Law Rep. 46 Ind. App. 151 ( 1918- 1919) Raja Setrucherla Ramabhadra Raju V. Maharaja of Jeypore 29
Exchange Assurance Corporation ([ 1897] 2 Q. B. 135.) ; Ram Rattan Sahn v. Mohant Sahn . (( 1907) 6 Cal. L. J. 74.) The fact that the due date arrived pending the appeal, therefore, did not increase the respondents rights. Secondly, part of the mortgaged land being in a scheduled district, neither the Subordinate Judge nor the High Court had jurisdiction Maha Prasad v. Ramani Mohan Singh . (( 1914) L. R. 41 I. A. 197.) Sect. 17 of the Code of Civil Procedure, 1908, applies only where each of the different Courts within whose jurisdiction the land is situate is a Court subject to the Code. The decision of the Board in the case last cited shows that the whole decree is invalid, not merely that part of it which ordered a sale of the land in the Agency Tracts. The objection to the jurisdiction was taken at the hearing in the High Court; that was not too late. In Maha Prasad1 s Case (4) the objection was taken only during the hearing before the Board. Sect. 21 of the Code applies only where the right " place of suing " is one subject to the Code. In the present case there was an entire absence of jurisdiction under the Code, at any rate so far as concerns the land in the Agency Tracts.
De Gruyther K.C. and Kenworthy Brown for the respondent.
Upon the true construction of the deed of July 4, 1911, the respondent was entitled at the date of the plaint to recover principal and interest, there being a default in the payment of the yearly interest. The words " the said amount " (at the end of the deed) refer to the principal and interest. If not, they are otiose, because under the covenant to pay interest it could be recovered " then and there. But in any case the due date having been passed at the date of the appeal, the High Court rightly affirmed the decree made. There was power to do so under Order xli., r. 33. Although part of the land was in the Agency Tracts, the Subordinate Judge had jurisdiction under s. 17 of the Code of Civil Procedure. That section is wider than the corresponding provision in s. 19 of the Code of 1882, and applies so long as the suit is brought in a court subject to the Code. Act XXIV. of 1839 provided that suits arising in the Agency Tracts should be brought in particular courts, but otherwise it did not affect procedure, as appears from the rules made under that Act see Madras Code, 4th ed., vol. 2, Appendix, p. 1264. The decision of the Board in Maha Prasads Case (L. R. 41 I. A. 197.) depends entirely upon legislation peculiar to the Sonthal Parganas. In any case, there was power to decree a sale of the land not in the Agency Tracts ; otherwise the respondent cannot enforce the mortgage by sale at all.
Sir William Garth in reply. Apart from the provisioh in the deed the interest in default was not recoverable Kannu v. Natlsa. (I. L. R. 14 M. 477.) It therefore is not n
