Limitation for delayed mortgage payment claims runs from actual loss, not mere breach, where compensation depends on injury suffered.

In a dispute over delayed payment of money retained for discharge of a prior mortgage, limitation was held to run from the date of actual injury, not merely from the date of contractual non-payment. The sale deed did not fix an express time for payment, so performance was due within a reasonable time, and the compensable loss arose only when the claimant later had to bear additional interest on the mortgage debt. The court treated the claim as one for compensation tied to actual loss and held that the suit was within time. The claimant was therefore entitled to damages for the loss caused by the delay.

---

---

Issues: (i) Whether the suit for damages arising from delayed payment of money left with the vendee for discharge of a prior mortgage was barred by limitation, and when the cause of action accrued; (ii) Whether the contractual stipulation created an indemnity, or a covenant whose breach gave rise to a claim only on actual injury.

Issue (i): Whether the suit for damages arising from delayed payment of money left with the vendee for discharge of a prior mortgage was barred by limitation, and when the cause of action accrued.

Analysis: The sale deed fixed no express time for payment, so payment had to be made within a reasonable time. The non-payment did not merely constitute a bare breach for purposes of compensation in the abstract; the actionable loss arose when the plaintiff was later compelled to pay additional interest on the mortgage debt. The Court treated Article 83 and Section 24 of the Limitation Act as governing a claim for compensation where the injury results later, and held that the period runs from the date of actual injury.

Conclusion: The suit was within time, and limitation did not bar the claim.

Issue (ii): Whether the contractual stipulation created an indemnity, or a covenant whose breach gave rise to a claim only on actual injury.

Analysis: The agreement to pay the mortgage money was not confined to a case where the mortgagee sued, though the deed also contained a specific stipulation as to costs and interest if litigation ensued. Even if read as an indemnity clause in a particular contingency, the broader promise to pay within a reasonable time remained operative. The Court held that, under Indian law, compensation for breach of such a covenant is tied to loss actually suffered, and the plaintiff could recover the additional interest caused by the delay.

Conclusion: The plaintiff was entitled to damages for the loss caused by the delayed payment.

Final Conclusion: The decree of the lower appellate Court was set aside and the decree of the trial Court restoring the plaintiff's relief was upheld.

Ratio Decidendi: In a suit for damages arising from delayed performance of an obligation to pay money to discharge an encumbrance, limitation runs from the date when actual loss is suffered, not merely from the date of contractual breach, where the right to compensation depends on injury actually resulting from the delay.

---