F. A. No. 601 of 1985

2nd November, 1992

Petitioner Counsel: G. T. Tendulkar
Respondent Counsel: R. G. Ketkar, R. N. Dhorde

JUDGMENT

S. M. DAUD, J. :- This is plaintiff's appeal taking exception to the dismissal of the greater part of its claim on the foot of a loan advanced to defendant No. 1 for the benefit of the joint family headed by him and including defendants Nos. 4 and 5 as also his guarantors the 2nd and 3rd defendants.

2. Defendants Nos. 1, 4 and 5 constituted a joint Hindu family, defendant No. 1 being the Karta thereof. The joint family was in need of money to repair an old well etc. etc. and therefore applied for a loan to the plaintiff-Bank. A loan of Rs. 12,000/ - was agreed to be advanced and to ensure the repayment of the loan, defendant No. 1 passed a promissory note on 17-6-1970 and a deed of mortgage on 16-6-1970. The agreed rate of interest was 4% over and above that fixed by the Reserve Bank of India from time to time, subject to a minimum of 9% per annum. Adjusting the repayments made, as on 31-3-1973, a sum of Rs, 15,488.20 ps., was outstanding. This sum together with interest as from 1-4-1973 amounting to Rs. 38.447.50 ps. making a total of Rs. 53,935.70 ps. was claimed in the suit. Defendants contended that the claim was barred by time and that Ganpat Nalavade was a necessary party to the suit. Pleadings aforestated gave rise to the appropriate issues. The learned trial Court held that a mere sum of Rs. 15,488.20 ps. was due from the defendants and that this amount be paid with proportionate costs and future interest at rate 6% per annum from the date of suit till realisation. It is the dismissal of the remaining part of the plaintiff's claim which has given rise to the present appeal.

3. The learned trial Judge has committed a series of errors which has led to a faulty verdict. First, he has overlooked the fact that the suit was for recovery of money on the foot of a mortgage. True, there was a reference to the promissory note, but the plaintiff had also sought a decree for recovery of the amount due from the defendant by sale of the mortgaged property. According to the learned trial Judge, the mortgage deed executed on 16-6-1970 was void as being without consideration. This is a surprising conclusion. The mere fact that the money promised to defendant No. 1 started being withdrawn as from 17-6-1970, would not make the mortgage deed executed a day earlier, void for want of consideration. Section 2(d), (e) and (f) of the Indian Contract Act, 1872 lay down as follows :-

"(d) When, at the desire of the promisor the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.(e) Every promise and every set of promises, forming the consideration for each other, is an agreement.

(f) Promises which form the consideration or part of the consideration for each other, are called reciprocal promises."

The advance of Rs. 12,000/- to the joint family was against the execution of a promissory note as also a mortgage deed passed by defendant No. 1 in his capacity as the Karta of the joint family. The property of the joint family was mortgaged to ensure repayment of a loan sought and received for and on behalf of the joint family. The promise to repay along with interest was a promise made by the promisees. As against this promise, the promisor agreed to and made an advance of Rs. 12,000/-. Each set of promise formed the consideration for the other and the two promises, were, what are known as "reciprocal promises". The mortgage deed was not void and was very much relevant both for the purposes of ruling upon the issue of limitation as also the nature of the decree to be passed against the defendants. The next error committed by the trial Court is in relation to the finding that a mere sum of Rs. 15,488.20 ps. was due from the defendants. This was on the basis that the sum represented the amount acknowledged as due by defendant No. 1. But there was no question of the remaining part of the claim becoming barred by time. The issue of limitation had to be decided on the basis of the applicability of Article 62 of the Limitation Act, 1963. This Article is worded as under :-

Description of suit	Period of Limitation	Time from which period begins to run.
62. To enforce payment of money secured by a mortgage or otherwise charged upon immovable property.	Twelve years.	When the money sued for becomes due.

The mortgage deed is at Exh. 19 and under it the loan amount was to be repaid in three annual instalments of Rs. 4000/- each plus interest thereon - the repayment to begin from June, 1971. Therefore, the very first instalment became due in June, 1971, and even if that be taken as the starting point of limitation, the present suit which was instituted on 1-12-1982, would be well within limitation as the same had been brought within 12 years of the commencement of running of time. The third error committed by the learned trial Judge is in relation to the finding that Rs. 38,447.50 ps. was not recoverable or it had not been shown in the statement of account pertaining to the suit loan. But a lapse, and, a clerical lapse at that in book-keeping, would not wipe out the liability. After all, there is no dispute the sum of Rs. 38.447.50 ps. represented interest payable from 1-4-1973 at the stipulated rate as laid down in the mortgage deed. Not keeping account upto-date by mentioning the exact sum due in the account-sheet of the defendants, would not wipe out the contractual liability of the defendants flowing from the promissory note and the mortgage deed. The fourth error committed by the learned trial Judge is in granting pendente lite and future interest, overlooking the fact that on the date the suit was instituted, no part of the sum due from the defendants represented the 'principal' sum. The balance for which the suit was brought represented the interest and nothing more. Having regard to the foregoing discussion, we set aside the decree passed by the trial Court and substitute by one, phrased thus :-

"Defendants do jointly and severally pay to the plaintiff a sum of Rs. 53,935.00 and costs proportionate thereto. In the event of this sum not being paid within six months from the date of the decree, plaintiff will be entitled to recover the decretal amount by enforcing sale of the mortgaged property. A preliminary decree for sale in the above terms be drawn up."

Appeal allowed as above.

Costs in this Court as incurred.

Appeal allowed.