1988 PLP 1675 (CLC)

This first appeal under section 96 of the C.P.C. is filed by the appellants/plaintiffs against the order of Senior Civil Judge, Mirpur Khas, dismissing their suit for foreclosure and sale of mortgaged property filed under Order 34 C.P.C. The following facts may be stated here in brief which are relevant for the decision of this appeal: Predecessor‑in‑interest of Respondents 1 (a) to 1 (g) Haji Mohammad Siddik (I will hereinafter refer him as the deceased only for the sake of convenience) was granted overdraft facility to the exent of Rs.36,000 by the appellant in consideration of a registered .simple mortgage created by the deceased in favour of appellant on 8th April, 1964. Simultaneous to the execution of mortgage deed the deceased also, allegedly executed promissory note in favour of respondent No.2 on 30th March, 1964 which the later endorsed it favour of appellant. The endorsement on promissory note by respondent No.2 in favour of appellant was followed by an agreement of guarantee executed by respondent No. 2 on the same date in favour of appellant. The appellant/plaintiff instituted the above suit on 16th April, 1969 both against the principal borrower as well as the surety. The suit was resisted by both the defendants. The principal borrower who was alive at the time of institution of the suit filed written statement and denied the claim of the plaintiff. Similarly respondent No.2 also disputed the claim of the plaintiff both on merits as well as on legal ground. On the basis of the controversy between the parties following issues were framed by the Court:‑ "(1) Whether the defendants are agriculturists? (2) Whether the defendant No. 1 had taken loan of Rs.36,000 as alleged in para No.3 of the plaint or Rs.32,000 as alleged in para 3 of written statement? (3) When and in what manner the amount taken on loan by the defendant was to be re‑paid? (4) Whether the defendant has paid all the amounts due against him and nothing remains to be paid? (5) Whether the defendant No.1 had made acknowledgement of the amount alleged to be due against him on 31‑3‑1967 if yes, to what effect? (6) Whether both the defendants or any one of them would be liable to pay any amount to the plaintiff. If yes to what extent? (7). Whether the suit is time‑barred? (8) Whether the plaintiff is entitled to pay interest? (9) Whether the plaintiff had granted extension for payment of loan to defendant No.l, if yes, what is the effect so for the liability is concerned? (10) What should the decree be?" Issues 4 to 7 in the suit which related to the defence of respondents /defendants were decided against the appellant /plaintiff while all other issues were decided in favour of plaintiff. As a result of findings on issues No.4 to 7 the suit was dismissed. Learned counsel for the appellant contends that the findings of the trial Court on issues No.4 to 7 are contrary to the evidence on record and are otherwise based on misreading of the evidence. During the proceedings of this appeal the appellant moved an application for producing additional evidence which was allowed by order dated 25‑3‑1985 and accordingly additional evidence was recorded in appeal by this Court or. 20th October, 1985. In the evidence recorded in this Court the appellant produced certified true copies of the statement of account relating to the loan account of the deceased as well as five original cheques issued by the deceased for withdrawal of the amount from the credit account. I have heard the learned counsel far the parties at length and have gone through the evidence recorded by the trial Court as well as in this Court with assistance of learned counsel. I am of the view that this appeal must succeed and the findings of the trial Court are liable to be reversed on issues Nos.4 to

7. Issue No.

4. The burden of proving this issue was on the defendants. The deceased alleged in his written statement that the amount was repaid by him. The witness examined on behalf of respondents 1 (a) to 1 (g) stated in his evidence before the Court that the deceased during his life time deposited a sum of Rs.31,776 with the bank on various dates and that at the time of grant of loan facility a sum of Rs.4,000 was deducted by the appellant plaintiff from the loan amount and in this way the deceased in all paid a sum of Rs.35,776.63 to the bank. With regard to alleged deduction of Rs.4,000 by the appellant at the time of grant of loan to the deceased, the respondents cannot claim any benefit as under issue No.2 framed in the suit the trial Court held that the loan granted to the deceased was in the sum of Rs.36,

000. The respondents in their evidence before the trial Court produced deposit receipts which show that the deceased during his life time deposited with the appellant a sum of Rs.31,776.63. Learned counsel for the appellant contends that the witness produced by the appellant only admitted deposit of Rs.28,500 while the sum of Rs.3276.63 alleged to have been deposited by the deceased on 4‑1‑1965 was not admitted by the appellant. It is also contended that there is no entry in the certified copy of the statement of account produced in this Court in the evidence, with regard to above deposit. It is accordingly contended that it is not established that the sum of Rs.3276.63 was deposited in the loan account by the deceased. The deposit of Rs.3276.63 is evidenced by the original deposit receipt produced on record and its genuineness was not at all challenged before the trial Court. The learned counsel for the appellant made an attempt to show that the deposit of the sum of Rs.3,276.63 was a transfer entry which was to be credited only on the clearance of the assets but neither in the evidence of the plaintiff nor in the evidence of the defendant any such plea was raised. I, therefore, find no substance in the contention of the learned counsel for the appellant that the payment of Rs.3,276.63 evidenced by Ex.97 should not be taken into consideration and hold that the deceased during his life time deposited with the appellant a sum of Rs.31,776.63 against the loan account which is liable to be adjusted in that account. Issue No.

5. The learned counsel for the appellant contends that vide Ex.94 the deceased had admitted a balance of Rs.31,815.70 as the amount due and payable against him as on 31st March, 1967. This exhibit is disputed by the respondents and it is contended that it,.relates to ancther account which the deceased had with the appellant bank it is however not necessary to go into this aspect of the case as at present. I am only determining the question of passing of a preliminary decree in this suit in which account has to be taken. This issue is accordingly decided. Issue N0.6. The learned counsel for the appellant contends that according to evidence on record and the additional evidence produced in this Court a SL m. of Rs.35,874 was due and payable by the .deceased to the appellant bank on account of loan outstanding against him. It is not disputed by the learned counsel for the appellant that this amount is made of various items like interest, payment of salary to the chowkidars, insurance premium, penal interest and other charges. It, is an admitted position that the mortgage created in favour of the plaintiff in the case was a simple mortgage without possession. In these circumstances there was hardly any justification for the plaintiff /appellant to have charged for the salary of Chowkidar as the property continued to be in possession of the deceased defendant. Similarly the mortgage agreement between the parties which is registered document contained no provision for payment of penal A interest by the deceased in the event of default by the mortgagor in payment of mortgage money. The appellant therefore, was not entitled to charge penal interest. However, with regard to insurance charges and ether' sundry expenses alleged to have been incurred by the appellant they will be entitled to these expenses upon providing proof of these expenses and if they are found necessary for the purpose, of preserving and maintaining the mortgage security. Issue No.7. The respondents in their written statements contended‑ that the suit against them is barred by limitation. Learned trial Court accepted the plea of the respondents and dismissed the suit as time‑barred against all of them. The suit against respondents 1 (a) to. 1 (g) is based on a registered mortgage and I fail to understand how the trial Court reached the conclusion that suit against them is time‑barred. The suit against these respondents is well within time having . beer filed under Order 34 C.P.C. on the basis of a mortgage, However the case of defendant No. 2 (respondent No. 2) is distinguishable and needs to be considered separately. Respondent 2 was only a surety for repayment of the amount and for this purpose he had endorsed the promissory note executed in his favour by the deceased in favour of the bank. The endorsement on this promissory note is dated 30th March, 1964 and is followed by an agreement of guarantee (Ex.95) of the same date. Learned counsel for the plaintiff/ appellant contends that as there was a specific provision in the agreement of guarantee postponing the recovery of the amount mentioned in the promissory note until service of a notice and expiry of 3 days from the date of service of notice, the suit was governed under Article 80 of Limitation Act and not Article 73 which contemplates filing of a suit on the basis of a promissory note within 3 years of its execution. To support his contention the learned counsel has placed reliance on an unreported judgment in Suit No.103/60, dated 30th August, 1969. It is true that in the present case the suit of the appellant will fall under Art.80 of Limitation Act, but even then it was not within time against respondent No.2. In paragraph 5 of the plaint it is stated by the plaintiff /appellant that the amount advanced as loan was agreed to be repaid to the appellant/ plaintiff by 1‑3‑1965. In paragraph 6 of the plaint it is further alleged that the defendant failed to repay the amount which was ‑due‑ against him. It then stated in paragraph 7 of the plaint that the last notice was issued by the appellant /plaintiff to the defendants on 12‑12‑1967 and thereafter in paragraph 10 of the plaint the cause of action is stated to have arisen as follows:‑

10. That the cause of action accrued to the plaintiff on 1‑3‑1965 at Mirpurkhas, within the jurisdiction of this honourable Court, when and where the amount of the advance became due and: the defendants failed to pay the same to the plaintiff." A reading of paragraph 10 of the plaint which gives cause of action as having arisen against the defendants on 1‑6‑1965 alongwith the averments made in paragraph 7 of the plaint, it is, clear that the suit as instituted on 16‑4‑1969 was beyond time, No facts are pleaded either in the plaint or in the evidence of appellant which had the.' effect of reviving the period of limitation. The, learned counsel for the plaintiff made an attempt to argue that as there is no evidence on record to show when the first notice of demand was served or respondent No. 2 the suit should be held to be within time from the date of the last mentioned notice dated 12‑12‑1967. 1 am unable to accept this contention of the learned counsel for the reason that paragraph 7 of the plaint cannot be read in isolation but has to be read alongwith paragraph 10 of the plaint in which the starting point of limitation for filing suit against the defendants is mentioned,. The fact that the plaintiff in his evidence omitted to produce the notices served on the defendants could not enlarge the period of limitation calculated from the date mentioned in paragraph 10 of the plaint: I therefore, hold that insofar respondent No. 2 is concerned the suit against him was not within time. The suit against defendant No. 2 is accordingly dismissed but there will be no order as to costs. As a result of above discussion and reversal of the finding, of the trial Court on issues No.4,6 and 7 1 pass a preliminary decree against defendant 1 (a) to 1 (g) (respondent 1, (a) to (g,) for taking of account to determine the principal amount as well as the interest due to appellant/plaintiff on the date of decree. However while taking the accounts the respondents 1 (a) to 1 (g) will be entitled to the credit of Rs.3,276.63 deposited by the deceased on 4‑10‑1965 as held under issue No.4. The plaintiff will not be entitled to charge the salary of the chowkidar and the penal interest shown in the statement as held under issue

6. The interest on the principal amount will be calculated strictly in accordance with the stipulation in the mortgage deed and will be payable until recovery of the amount. The plaintiff will also be entitled to proportionate costs of the suit and such other expenses which the plaintiff is able to prove were necessary for the purposes of preservation of the mortgage security. The preliminary decree to follow accordingly. H . B . T . / N‑69/ K Appeal allowed /Order accordingly,