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1889 Supreme(SC) 1
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD FITZ GERALD, LORD HOBHOUSE, SIR RICHARD COUCH, AND MR. STEPHEN WOULFE FLANAGAN.
SRINATH DAS - Appellant
Versus
KHETTERMOHUN SINGH - Respondents
On Appeal from the High Court in Bengal.
Decided On : Nov. 16, 17. 1888; Feb. 5. 1889.
Solicitors for Appellant: T. L. Wilson & Co.
A mortgagee's right to sue for possession of mortgaged property is barred after twelve years from the date the mortgagor's right to possession determines. Subsequent legislation creating a new remedy for foreclosure does not revive rights already extinguished by the statute of limitation.
Headnote:(A) Limitation Act, 1877 - Article 135 and 147 - Transfer of Property Act, 1882 - Section 2(c) - Mortgage in English form - Limitation for suit for possession vs. foreclosure - Right to possession of mortgagor determines upon default - Suit for possession barred after twelve years from such determination - Subsequent enactment providing for foreclosure suits does not revive a right already extinguished by limitation.
(B) Transfer of Property Act, 1882 - Section 2(c) - Effect of the Act on existing rights and liabilities - The Act does not affect any right or liability arising out of a legal relation constituted before its commencement, nor any relief in respect of such right or liability.
Facts of the case:
A mortgage in English form was executed with a specific due date. Upon default, the mortgagee attempted foreclosure proceedings under a regional regulation. While successful against the original mortgagor, the proceedings did not bind subsequent purchasers who were not served notice. A suit for payment and foreclosure was subsequently filed by an assignee of the mortgagee after the twelve-year period from the date of default had elapsed, but within the sixty-year period provided for foreclosure suits.
Findings of Court:
The right to possession of the mortgagor determined on the date of default. Under the applicable limitation law, a suit for possession must be brought within twelve years from that date. Since the suit was filed after this period, the right to possession was extinguished, and the title of the purchasers became unencumbered.
Issues: Whether a suit for possession of mortgaged property is governed by the twelve-year limitation period from the date the mortgagor's right to possession determines or the sixty-year limitation period for foreclosure suits, and whether the introduction of foreclosure suits by a subsequent Act revives an extinct right.
Ratio Decidendi: The court held that for mortgages of this nature, the right to possession determines upon default. Once the twelve-year limitation period for a suit for possession expires, the right is extinguished. The subsequent creation of a new legal remedy under the Transfer of Property Act, 1882, cannot revive a right already lost to limitation, as the Act expressly preserves existing rights and liabilities.
Result: Appeal dismissed.
APPEAL from a decree of the High Court (Nov. 18, 1885) reversing a decree of the Subordinate Judge of the 24-Per-gunnahs (June 7, 1883).
The plaint was filed on the 6th of September, 1882, i.e., after the Civil Procedure Code of 1882 and the Transfer of Property Act of the same year had both come into force; sect. 2 of the latter Act repealed wholly the Bengal Regulations 1 of 1798 and 17 of 1806 relating to redemption and foreclosure of mortgages and conditional deeds of sale.
The Plaintiff sued under the sections of the Transfer of Pro perty Act, 1882, relating to mortgages, as assignee of the interest which had belonged to one Shamasoondari Debt in the lands in suit, and sought to enforce against the Defendants, twenty-nine in number, of whom the first, Hurrinarain Dey, was the mortgagor, and the other purchasers subsequent to the mortgage of parts of the mortgaged premises, the mortgage securities which as such assignee he was entitled to.
The Courts below differed as to the law of limitation which governed the case as regards the purchasers front Hurrinarain Dey.
The facts of the case and the proceedings are sufficiently stated in the judgment of their Lordships.
The decree of the First Court was that the suit should be decreed in terms of sect. 68 of the Transfer of Property Act, for an account, payment, and foreclosure in default.
That Court also held on the issue as to limitation that art. 147 of Act XV. of 1877 applied.
The High Court, on the contrary, held that art. 135 applied.
Their judgment on the point of limitation was as follows—
"The parties to the mortgage of the 17th of November, 1865, were Hindus. The mortgage was a mortgage in English form, giving a power of sale and entry, and the due date was 17th -of February, 1866.
"So far as the form of the mortgage is concerned, it is clear that a mortgage in English form between Hindus, of lands in the Mofussil, outside Calcutta, is always treated by the Courts as a mortgage by conditional sale.
"In the case of Khelat Chunder Ghose v. Tara Churn Koondoo Chowdhry (6 Suth. W. R. 269, see 275.), Sir Barnes Peacock said in regard to the rights of the parties under a deed of this kind The mortgagee was entitled to possession before foreclosure immediately default was made, and he would hold possession subject to his own right tt> foreclose and the mortgagors right to redeem. His right to sue for possession did not depend upon his obtaining a decree for foreclosure. The Defendant might have been sued for possession immediately default was made.
"And in the suit of Srimati Sarasibala Debi v. Nand Lai Sen 5 Beng. L. R. 389.), it was decided that no suit would lie by the mortgagee as purchaser after breach of the condition, for possession of property on a mortgage in the English form, unless foreclosure proceedings had been taken under Regulation 17 of 1806.
"This case shews that under an English deed of mortgage the mortgagee had no better right than he would have under an ordinary mortgage by conditional sale, except that a mortgagee with a power of entry on default could sue for possession of pro perty without foreclosure.
"Now, the next point we come to is, what were the rights of a mortgagee in Bengal, holding a mortgage by conditional sale? This has been the subject of discussion before their Lordships of the Judicial Committee in the case of Thumbasawmy Mudelly v, Hossain Rowthen (Law Rep. 2 Ind. Ap. 241; S.C., Ind. L. R. 1 Madras, 1.). In that case their Lordships decided that before the passing of Regulation 17 of 1806, one of the essential characteristics of a mortgage by conditional sale, was, that on the breach of the condition of repayment, the contract executed itself, and the transaction was closed and became one of absolute sale without any further act of the parties or accountability between them. They also held that this was the law in force in Bengal, until Regulation 17 of 1806 made provisions for redemption and foreclosure, by the procedure in
