D. Sreedevi, J. 1. This appeal is directed against the decree and judgment in A.S. No. 7/89 of the District Court, Thrissur, which was filed against the decree and judgment in O.S. No. 208/83 of the Munsiff's Court, Wadakkancherry. The official receiver appointed by the District Court, Palakkad for the administration of the estate of M.N. Venkitasubramania lyer and Sons and Narasimha Financing Company in insolvency proceedings in I.P. 3/76 and I.P. 4/76 is the appellant, who was the plaintiff in the trial court. Defendants 2 to 5 are the respondents.
2. The first defendant in the suit, who was the father of the other defendants/ respondents was a subscriber of a kuri conducted by M.N. Venkitasubramania Iyer & Sons. The kuri amount was Rs. 10,000/- having 50 tickets of Rs. 200/- each and to run for 50 months from 15.12.1972. The first defendant, who was a subscriber to one ticket, prized the kuri for Rs. 6,990/- at the 12th instalment held on 15.11.1973 and received the amount on 20.12.1973 under Ext. A1 receipt executed by the 1st and 2nd defendant. The letter of acknowledgement was executed by defendants 1 and 2 undertaking to pay 37 future instalments at the rate of Rs. 200/- under Ext. A2. Along with Exts. A1 and A2, the deceased first defendant and respondents herein deposited the title deeds in respect of the suit property with the intention to create a mortgage and to secure the amounts already due, and amounts which may become due thereafter from any or all of them under any promissory note, loan, kuri amount or other transactions, but upto a limit of Rs. 20,000/-. The 2nd defendant took another loan of Rs. 3130 from the company after executing a pronote. From 38th instalment onwards the defendants committed default of payment of instalments. Therefore, the suit was filed for recovery of the amount including Rs. 3,130/- together with interest due under Ext. A5 promissory note executed by the 2nd defendant.
3. The defendants resisted the suit. The second defendant has received Rs. 3,130/ from the company by executing a pronote on 8.4.1976 with an undertaking to pay on demand together with 18% interest. It is also alleged in the plaint that the amount covered by the pronote is also secured by virtue of the mortgage created on 20.12.1973. The defendant did not repay the pronote amount. Hence the plaintiff sues for a charge of the defaulted kuri amount as well as the amount covered by the pronote.
4. Defendants 2 to 4 and 5 together filed a written statement. According to them, the first defendant never joined the kuri as alleged. They would state that kuri was run by the second defendant, that these defendants have not received any kuri amount as alleged, that they have handed over some blank papers for the first defendant for the purpose of kuri transaction, that the defendant 3 onwards are not liable for any debt incurred by defendants 1 and 2, that even if the defendants 1 and 2 had joined the kuri and received some amount, the other defendants are not liable and that defendants 3 to 5 are not liable for the amount covered by the promissory note. They also filed an additional written statement contending that the suit is bad for non joinder of parties as the first defendant, their father, passed away on 10.7.1974, even prior to the date of institution of the suit.
5. The trial court, after taking evidence, decreed the suit allowing the plaintiff to realize Rs. 4,476/- with future interest at the rate of 6% per annum till the date of realisation creating a charge on the plaint schedule property and from the assets of the first defendant to the extent that devolved on defendants 2 to 5. The court disallowed the claim to realize the amount covered by the pronote as the pronote is barred by limitation.
6. Aggrieved by the said decree and judgment the plaintiff filed A.S. 7/89 before the District Court, Thrissur. The learned District Judge dismissed the appeal confirming the decree and judgment of the trial court. Aggrieved by the said decree and judgment, the plaintiff has filed this appeal.
7. The questions of law involved in this case for the purpose of the appeal are the following:
A. Has not the lower appellate court acted illegally in holding that a mortgage by deposit of title deeds can be created only in respect of subsisting debts and not in respect of debts that may arise in future?
B. Has not the lower appellate court erred in not properly interpreting Ext. A4 memorandum of deposit of title deeds?
8. Mr. S.V. Balakrishna Iyer, learned counsel for the appellant, challenges the decree and judgment on various grounds. According to him, the lower Appellate Court failed to see that Ext. A4 memorandum of deposit of title deeds executed on the same date as that of Exts. A1 and A2, secured not only Ext. A2 debt but also any debt or liability that the executants of Ext. A4 or any of them incur in future. He has also submitted that under the Transfer of Property Act a mortgage by deposit of title deeds can be created for securing a future debt.
9. Admittedly, the plaintiff is the official receiver appointed by the District Court, Palakkad in Insolvency Petition NOS. 3/76 and 4/76, by virtue of which, the administration of the estate vests with the official receiver. The insolvency petitions were filed for adjudicating M.N. Venktasubramania Iyer and Sons and Narasimha Financing Company as insolvents. M.N. Venkitasubramania Iyer and Sons as foreman was conducting a kuri. The deceased first defendant subscribed to the kuri. He bid the kuri at the 12th instalment and received the kuri amount of Rs. 6,990/-. Defendants I and 2 executed a receipt in favour of the company acknowledging the receipt of the amount. Thereafter the first defendant paid subscriptions upto the 37th instalment. Defendants 2 to 5 are the children of the first defendant. Ext. A2 is the letter of acknowledgment executed by the first and defendants 1 and 2 acknowledging the liability to pay future 37 instalments at the rate of Rs. 200/- per instalment. Ext. A4 is the memorandum of title deeds evidencing the mortgage in relation to the plaint property. There, it is admitted that the liability will be limited to Rs. 20,000/-.
10. After the execution of Ext. A4, the second defendant borrowed Rs. 3,330/-from the company and executed a promissory note undertaking to pay the amount with 18% interest. According to the plaintiff, the promissory note amount was also covered by the equitable mortgage and hence he is entitled to realise the said amount from the property. Both the courts below concurrently held that the plaintiff is not entitled to realise the amount covered by the promissory note as it is a separate transaction and that the amount under the pronote is barred by the law of limitation. Learned counsel for the appellant submitted that both the courts below went wrong in holding that the amount covered by the promissory note is not a part of the mortgage amount for which he relied on S. 58(a) of the Transfer of Property Act, which reads as follows:
"A mortgage is the transfer of an interest in specific immovable properly for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability".
11. According to the learned counsel for the appellant, the equitable mortgage created in favour of another is for securing a future payment also. Therefore, the amount advanced by the company to the second defendant subsequent to the equitable mortgage is a debt due under the mortgage. A mortgage can be created for a loan amount and also to be advanced by way of loan.
The property belonging to the fifth defendant was offered as security. The memorandum was executed by respondent 2 to 5. This memorandum reads as follows:
"Please acknowledge receipt of the following documents mentioned in the list below, being Title deeds of my/our properties already delivered to you at the premises of M/s. Narasimha Building Nailkural, TCR as security for all amounts already due or that may hereafter become due by me/us by way of Pro-Note loans, kuri amounts or any other amounts. Limit Rs. 20,000/- (Rupees Twenty thousand only)".
From this it is clear that this property was offered as security for all the amounts already due or that may hereafter become due by the executants by ways of pronote amounts, kuri amounts or any other amounts not exceeding Rs. 20,000/-. In view of Ext. A4 memorandum the defendants are estopped from contending that the amount covered by the promissory note executed by the second defendant is not liable to be recovered from the property offered as security. A mortgage also includes future debt. Therefore, the finding of the court below that the plaintiffs are not entitled to recover the amount covered by the promissory note, executed by the second defendant is not correct.
In the result, this appeal is allowed and the decree and judgment appealed against are set aside and the plaintiff is granted a decree allowing him to realise the amount covered by the promissory note, also along with the kuri amount allowed by the courts below, charged on the plaint schedule properties and also from the assets of the first defendant that devolved on defendants 2 to 5. No costs.