Full Judgment Text
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CASE NO.:
Appeal (civil) 840 of 2000
PETITIONER:
Prabhakaran & Ors.
RESPONDENT:
M. Azhagiri Pillai (Dead) by LRs. & Ors.
DATE OF JUDGMENT: 20/03/2006
BENCH:
Arijit Pasayat & R. V. Raveendran
JUDGMENT:
J U D G M E N T
RAVEENDRAN, J.
This appeal by special leave is filed by the legal
representatives of the plaintiffs in a suit for redemption of
mortgage.
2. Brief facts necessary for disposal of this appeal are :-
2.1) One Manickam Pillai obtained a loan of Rs.300/- from
Krishna Pillai and mortgaged his property situated in
Prithivimangalam Village, Thyagadurgam Taluk, (for short ’the
suit property’) in favour of the said Krishna Pillai under a
usufructuary mortgage deed dated 7.9.1935 (Ex.A-1). The deed
provided that mortgagee is entitled to be in possession of the
mortgaged property in lieu of interest till redemption.
2.2) The mortgagee (Krishna Pillai) assigned the said
mortgage in favour of one Soundararaja Iyenger (also known as
Soundararaja Achariar) under registered deed dated 12.2.1954
(Ex.A-3) by receiving Rs.300/- from the assignee and delivered
possession of the suit property to the assignee. The said
assignee, Soundararaja Iyenger died leaving him surviving his
widow Jayalakshmi Ammal and son Krishnaswamy Iyenger
(defendants 1 and 2 in the suit).
2.3) The mortgagor Manickam Pillai died some years after
executing the mortgage deed, survived by his widow and four
daughters. His widow and first daughter Kuppammal died
subsequently. The second daughter also died leaving behind her
son Thukkaram. His third daughter Yasodai Ammal and
Thukkaram settled their share/interest in the right of redemption
in favour of the fourth daughter of Manickam Pillai, namely,
Sakkubai Ammal (first plaintiff) under registered deed dated
24.8.1981. Before such gift/settlement, Thukkaram, Yasodai
Ammal and Sakkubai Ammal issued a notice on 21.8.1977 for
redemption of the mortgage. Defendants 1 and 2 sent a reply
dated 26.8.1977 refusing to comply on the ground that they
were not in possession of the suit property and one Azhagiri
Pillai (third defendant in the suit) was in possession of the
property. Thereafter, a notice dated 9.10.1977 was also sent to
Azhagiri Pillai who sent a reply dated 26.10.1977 repudiating
the claim and setting up an oral sale in his favour in December,
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1953/January, 1954.
3. The said Sakkubai Ammal filed the said suit - O.S.
No.1079/81 on the file of the District Munsiff, Kallakurichi on
16.11.1981 for the following reliefs : (i) a preliminary decree
for redemption of the usufructuary mortgage dated 7.9.1935 in
regard to the suit property, (ii) for an account in respect of the
income therefrom, from the date of discharge of the mortgage;
and (iii) for a final decree for redemption of the mortgage.
Plaintiffs contended that the mortgage and the right of
redemption were subsisting, in view of the assignment dated
12.2.1954 being an ’acknowledgement’ and that the mortgage
debt stood discharged by Section 9 of the Tamil Nadu Debt
Relief Act, 1979 (for short ’the Debt Relief Act’). In the said
suit, Jayalakshmi Ammal and Krishnaswamy Iyenger (legal
heirs of the assigneee of the mortgage) were impleaded as
defendants 1 and 2. Azhagiri Pillai who was in possession,
either as a licensee or lessee of Soundararaja Iyenger, was
impleaded as the third defendant. As the said defendant had let
out the suit property to Raghamathulla Sahib and Mayava
Pandithan, they were impleaded as defendants 4 and 5.
4. Defendants 1 and 2 as also defendants 4 and 5 remained
ex parte. Only the third defendant, (Azhagiri Pillai) contested
the suit, alleging that he was the cousin of first plaintiff; that
apart from the mortgage dated 7.9.1935 created by Manickam
Pillai, the suit property was mortgaged by the daughters of
Manickam Pillai to one Raju Pillai on 22.6.1948 for Rs. 200/-;
that they (first plaintiff and her sisters) approached him for
discharging the said debts; that the property was valued at
Rs.1,000/-, and it was agreed that he should pay them Rs.400/-
and retain the balance of Rs.600/- to discharge the two
mortgage debts; that accordingly he paid Rs.400/- to first
plaintiff and her sisters in December, 1953 or January, 1954
and purchased the suit property under an oral sale; that as he did
not have the funds to pay the mortgage debts, his friend
Soundararaja Iyenger came to his rescue with the understanding
that he (Soundararaja Iyenger) would discharge the
usufructuary mortgage in favour of Krishna Pillai and simple
mortgage in favour of Raju Pillai and obtain assignments of the
mortgages, and thereafter receive the amount from the third
defendant as and when he was able to pay the amount; that in
pursuance of such arrangement, Soundararaja Iyenger paid the
mortgage amount to Krishna Pillai and Raju Pillai and obtained
assignments dated 12.2.1954 in his favour; that subsequently in
the year 1960, the third defendant paid the amount to
Soundararaja Iyenger; and that he obtained possession of the
suit property in the year 1954. He contended that he perfected
his title by adverse possession. He also contended that the
mortgage dated 7.9.1935 was no longer subsisting and the
plaintiffs had no right of redemption.
5. During the pendency of the suit, the first plaintiff
Sakkubai Ammal died. Her legal heirs, that is, husband
Vijayarangam Pillai, sons Prabhakaran and Venkatesan, and
daughter Vatchala were impleaded as plaintiff Nos.3, 2, 5 and 4
respectively. After evidence, the trial court dismissed the suit
by judgment and decree dated 30.10.1987 holding that the
mortgage deed dated 7.9.1935 was not subsisting as on the date
of the suit, that the right of redemption was barred by
limitation, and the third defendant had perfected his title over
the suit property by adverse possession.
6. Feeling aggrieved, plaintiffs 2 to 5 filed an appeal before
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the Subordinate Court, Virudachalam. The first appellate court
allowed the said appeal by judgment and decree dated
18.12.1990. It held that the oral sale put forth by the third
defendant was not proved and at all events void and invalid as
any sale for a consideration of more than Rs.100/- could be
only by a registered instrument. It held that even if the third
defendant was in possession for more than 12 years, such
possession by the third defendant was claimed through the
mortgagee, and did not become adverse to plaintiffs nor confer
title on third defendant by adverse possession. The appellate
court also held that having regard to the acknowledgement
contained in the deed of assignment of the mortgage dated
12.2.1954 by Krishna Pillai, the mortgage was subsisting and
the first plaintiff was entitled to file a suit for redemption within
30 years from 12.2.1954, and, therefore, the suit filed in the
year 1981 was not barred by limitation. It also held that by
virtue of the mortgagee and his assignee being in possession of
the mortgaged property for more than 10 years, the mortgage
debt was discharged under Section 9 of the Debt Relief Act.
Consequently, the first appellate court allowed the appeal, set
aside the judgment and decree of the trial court and granted a
preliminary decree for redemption with costs, as prayed.
7. The third defendant filed Second Appeal No.99/1991
before the Madras High Court against the said judgment. He
also filed an application (CMP No. 5963 of 1997 in the second
appeal) for amendment of the decree by amending the
description of the suit property so as to be in conformity with
the deed of mortgage dated 7.9.1935 (Ex. A1).
8. A learned Single Judge of the Madras High Court by
judgment dated 1.9.1999, allowed the second appeal, and
consequently, dismissed the suit, holding as follows :-
(i) The concurrent finding of fact recorded by the trial
court and first appellate court that Azhagiri Pillai
(third defendant), did not acquire title by adverse
possession, did not call for interference.
(ii) The assignment of mortgage by the mortgagee
under deed dated 12.2.1954 did not amount to
acknowledgement for extending limitation for filing
a suit for redemption.
(iii) The mortgage was executed on 7.9.1935. The
period of limitation for a suit for redemption was 30
years under Article 61(a) of the Limitation Act,
1963, while the period of limitation was 60 years
under the corresponding Article 148 of the
Limitation Act, 1908. Where the period of
limitation under the new Act was shorter, having
regard to Section 30 of the new Act, the suit ought
to have been filed within 7 years from the date of
commencement of the said Act. The new Act came
into force on 1.1.1964. Therefore, the last date for
filing the suit for redemption was 1.1.1971 and the
suit filed on 16.11.1981 was barred by limitation.
(iv) The plaintiffs were not entitled to any relief under
the provisions of the Tamil Nadu Debt Relief Act,
1979, as the mortgage was not subsisting on
15.7.1978, when the said Act came into force.
(v) The plaintiffs could not alternatively claim relief
under the Tamil Nadu Agriculturist Relief Act,
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1938 (Act 4 of 1938) as amended by Act 24 of
1950, as such a case was not pleaded.
9. In this appeal filed by the plaintiffs, the contentions urged
to challenge the decision of the High Court, give rise to the
following questions for consideration :
(i) Whether the assignment of the usufructuary
mortgage by Krishna Pillai in favour of
Soundararaja Iyenger under deed dated 12.2.1954
amounted to an ’acknowledgement’ under section
18 of Limitation Act, 1963, thereby enabling
plaintiffs to compute a fresh period of limitation for
the suit for redemption, from the date of such
acknowledgement.
(ii) Whether the mortgage debt under the deed of
mortgage dated 7.9.1935 stood discharged under
section 9 of the Tamil Nadu Debt Relief Act, 1979.
(iii) If the answer to the above two questions is in the
affirmative, to what relief plaintiffs are entitled to.
Re : Question (i) :
10. An usufructuary mortgage is a transfer by the owner
(mortgagor) of an interest in an immovable property for
securing the amount advanced/to be advanced by the creditor
(mortgagee), under which possession of the property is
delivered to the mortgagee with authority to retain such
possession and enjoy the rents and profits therefrom, until the
debt is paid (vide Section 58(d) of the Transfer of Property Act,
1882, for short ’T.P. Act’). The owner/mortgagor, who
continues to hold the bundle of rights constituting ownership,
minus the right to possession, has the right to recover
possession of the mortgaged property by paying the mortgage
debt. The said right to recover possession (along with the right
to receive back the documents relating to the mortgaged
property and the right to obtain a deed of
reconveyance/retransfer of the mortgaged property) is known as
the right of redemption of the mortgagor and is statutorily
recognized in section 60 of T.P. Act. Such right of redemption
can be extinguished during the subsistence of the mortgage only
by the act of parties or by decree of a court. This Court in
Jayasingh D. Mhoprekar vs. Krishna B. Patil [1985 (4) SCC
162] observed :
"It is well-settled that the right of redemption under a
mortgage deed can come to an end only in a manner known
to law. Such extinguishment of right can take place by a
contract between the parties, by a merger or by a statutory
provision which debars the mortgagor from redeeming the
mortgage. A mortgagee who has entered into possession of
the mortgaged property under a mortgage will have to give
up possession of the property when the suit for redemption
is filed unless he is able to show that the right of
redemption has come to an end or that the suit is liable to
be dismissed on some other valid ground. This flows from
the legal principle which is applicable to all mortgages,
namely, "Once a mortgage, always a mortgage"."
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11. Article 148 of the Limitation Act, 1908 (referred to as
’old Act’) provided a limitation of 60 years for a suit against a
mortgagee, to redeem or to recover possession of immovable
property mortgaged. The corresponding provision in the
Limitation Act, 1963 (’new Act’ or ’Limitation Act’ for short),
is Article 61(a) which provides that the period of limitation for
a suit by a mortgagor to redeem or recover possession of the
immovable property mortgaged is 30 years. The period of
limitation begins to run when the right to redeem or to recover
possession accrues. In the case of a usufructuary mortgage
which does not fix any date for repayment of the mortgage
money, but merely stipulates that the mortgagee is entitled to be
in possession till redemption, the right to redeem would accrue
immediately on execution of the mortgage deed and the
mortgagor has to file a suit for redemption within 30 years from
the date of the mortgage. Section 27 of the Limitation Act
provides that "at the determination of the period hereby limited
to any person for instituting a suit for possession of any
property, his right to such property shall be extinguished". This
would mean that on the expiry of the period of limitation
prescribed under the Act, the mortgagor would lose his right to
redeem and the mortgagee would become entitled to continue in
possession as the full owner.
12. Section 18 of the new Act (corresponding to section 19
of the old Act) deals with the effect of acknowledgment in
writing, the relevant portion whereof reads thus :
"18. Effect of acknowledgment in writing.- (1) Where, before the
expiration of the prescribed period for a suit or application in
respect of any property or right, an acknowledgement of liability in
respect of such property or right has been made in writing signed
by the party against whom such property or right is claimed, or by
any person through whom he derives his title or liability, a fresh
period of limitation shall be computed from the time when the
acknowledgement was so signed.
(2) \005\005..
Explanation.- For the purposes of this section,-
(a) an acknowledgement may be sufficient though it
omits to specify the exact nature of the property or
right, or avers that the time for payment, delivery,
performance or enjoyment has not yet come or is
accompanied by a refusal to pay, deliver, perform or
permit to enjoy, or is coupled with a claim to set off,
or is addressed to a person other than a person entitled
to the property or right,
\005\005\005\005."
13. Earlier, there were two views as to what constituted an
acknowledgement in regard to a suit for redemption of a
mortgage. One view was that an admission by a mortgagee, in a
subsequent transaction, that he holds the property as a
mortgagee was a sufficient acknowledgement that the
mortgagee thought and believed that he was liable for the
property being ’redeemed’ from him by the mortgagor as on the
date of that statement. The other view was that, to constitute an
acknowledgement, the statement must be an admission by the
mortgagee of the jural relationship in relation to the liability or
the right or the property claimed and that such a statement must
be shown to have been made with a consciousness and an
intention of admitting such a right or liability. The controversy
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has now been set at rest by the decisions of this Court.
14. In Shapur Fredoom Mazda v. Durga Prosad Chamaria
(AIR 1961 SC 1236), this Court explained the essentials of an
acknowledgement by considering the scope of Section 19 of the
old Act :
"\005 acknowledgement as prescribed by section 19 merely
renews debt; it does not create a new right of action. It is a
mere acknowledgement of the liability in respect of the
right in question; it need not be accompanied by a promise
to pay either expressly or even by implication.
The statement on which a plea of acknowledgement is
based must relate to a present subsisting liability though the
exact nature or the specific character of the said liability
may not be indicated in words. Words used in the
acknowledgement must, however, indicate the existence of
jural relationship between the parties such as that of debtor
and creditor, and it must appear that the statement is made
with the intention to admit such jural relationship. Such
intention can be inferred by implication from the nature of
the admission, and need not be expressed in words. If the
statement is fairly clear, then the intention to admit jural
relationship may be implied from it.
In construing words used in the statements made in writing
on which a plea of acknowledgement rests oral evidence
has been expressly excluded but surrounding circumstances
can always be considered. \005 The effect of the words used
in a particular document must inevitably depend upon the
context in which the words are used and would always be
conditioned by the tenor of the said document\005..
Stated generally, courts lean in favour of a liberal
construction of such statements though it does not mean
that where no admission is made one should be inferred, or
where a statement was made clearly without intending to
admit the existence of jural relationship such intention
could be fastened on the maker of the statement by an
involved or far-fetched process of reasoning."
15. The question was again examined with reference to the
right of redemption in Tilak Ram v. Nathu (AIR 1967 SC 935)
and this Court held :
"The right of redemption no doubt is of the essence of and
inherent in a transaction of mortgage. But the statement in
question must relate to the subsisting liability or the right
claimed. Where the statement is relied on as expressing
jural relationship it must show that it was made with the
intention of admitting such jural relationship subsisting at
the time when it was made. It follows that where a
statement setting out jural relationship is made clearly
without intending to admit its existence, an intention to
admit cannot be imposed on its maker by an involved or a
far-fetched process of reasoning."
After examining the wording of the document which was put
forth as an ’acknowledgement’, in that case, this Court
observed as follows, on the facts of that case :
"These statements were clearly made for the purpose of
describing his own rights which he was selling under this
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deed. But there is nothing in this document to show that he
referred to the said mortgages with the intention of
admitting his jural relationship with his mortgagors and,
therefore, of his subsisting liability as the mortgagee
thereunder of being redeemed."
The principles laid down in S.F. MAZDA (supra) and TILAK
RAM (supra) were reiterated in Lakhmi Ratan Cotton Mills Co.
Ltd., vs. The Aluminium Corporation of India Ltd., (AIR 1971
SC 1482).
16. This Court had occasion to consider the question again in
Reet Mohinder Singh Sekhon Vs. Mohinder Parkash (1989 (4)
SCC 30). In that case, the suit property was mortgaged on
22.5.1886 and the mortgagee sold his mortgage rights under a
Sale Deed dated 1.11.1913 which contained the following
recitals :-
"Now I of my own accord have sold all my mortgagee
rights along with the original mortgage consideration and
interest which according to the terms of the aforesaid
mortgage deed has accrued and is payable to the instant
vendor . . . The rights and interest regarding recovery of
original mortgage money and interest according to
mortgage deeds executed by Jangi Khan original mortgagor
deceased and redemption of the mortgaged land which
hencetofore vested in the instant vendor stand vested in the
purchaser\005"
The successors-in-interest of the mortgagor filed a suit for
redemption on 28.12.1968 contending that the aforesaid recitals
amounted to an acknowledgement of the right of the mortgagor
to redeem the property. The suit was resisted on the ground that
the recitals in the sale deed dated 1.11.1913 did not serve as an
acknowledgement. Negativing the said objection, this Court
held :
"\005 It is true, as pointed out in Tilak Ram v. Nathu (AIR
1967 SC 935), that the period of limitation cannot be
extended by a mere passing recital regarding the factum of
the mortgage but that the statement on which the plea of an
acknowledgement is based must relate to a subsisting
liability. The words used must indicate the jural
relationship between the parties and it must appear that
such a statement is made with the intention of admitting
such jural relationship. But, in our opinion, the recitals in
the sale deed on November 1, 1913 fulfil the above
requirements. The fact of Nanak Chand having obtained a
mortgage with possession had already been recited in an
earlier part of the sale deed. The passages in the sale deed,
which have been extracted by us above, contain two
specific recitals. The first is that "the original consideration
and interest under had accrued and was payable to the
instant vendor". These words acknowledge that the
mortgage had not been redeemed and that the mortgage
moneys remained outstanding to the mortgagee from the
mortgagor as on the date of the sale deed. The second
recital is even more specific. It says that what stands
transferred to the purchaser is not only the right of the
mortgagee for recovering the principal amounts and interest
according to the mortgage deed (which, as earlier stated,
still remained outstanding) but also "the rights and interest"
regarding the redemption of the mortgaged land. These
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words are, of course, a little inappropriate because the right
of redemption is in the mortgagor and not in the mortgagee.
But, read as a whole, the second sentence we have quoted
here from the sale deed clearly manifests an intention on
the part of the mortgagee to acknowledge that his right to
recover the moneys under the mortgage deed as well as his
liability to have the property redeemed by the mortgagor in
the event of his paying off the moneys due under the
instrument both stand vested in the purchaser. We are of
the opinion that it is not correct to treat the recitals in the
document as a mere narration of the previous mortgage that
had been created on the property. The words spell out a
clear intention that the moneys due under the mortgage still
remained unpaid and also that the mortgagor had a
subsisting right of redemption which he could enforce
against the mortgagee. In this view of the matter the
contention on behalf of the appellant that the recitals in the
document of November 1, 1913 constituted an
acknowledgement of liability for redemption within the
meaning of Section 19 of the Limitation Act deserves to be
accepted."
17. The said principles relating to section 19 of the old Act
fully apply to ’acknowledgements’ under section 18 of the new
Act. To summarise, a statement (in writing and signed) by a
mortgagee can be construed as an ’acknowledgement’ under
Section 18 of the Limitation Act, if it fulfils the following
requirements :
(i) The acknowledgement of liability must relate to a
subsisting mortgage.
(ii) The acknowledgement need not be in a document
addressed to the mortgagor (person entitled to the
property or right). But it should be made by the
mortgagee (the person under liability).
(iii) The words used in the acknowledgement must indicate
the existence of jural relationship between the parties and
it must appear that the statement is made by the
mortgagee with the intention of admitting the jural
relationship with the mortgagor.
(Such intention of admitting the jural relationship need
not be in express terms, but can be inferred or implied
from the nature of admission and the words used, though
oral evidence as to the meaning and intent of such words
is excluded.)
(iv) Where the statement by the mortgagee in the subsequent
document (say, deed of assignment) merely refers to the
mortgage in his favour which is being assigned, without
the intention of admitting the jural relationship with the
mortgagor, it will not be considered to be an
’acknowledgement’.
18. There is no difficulty in holding a statement to be an
’acknowledgement’ under section 18, where the mortgagee
makes a direct admission that he is liable to deliver back
possession to the mortgagor or that the mortgagor has the right
to redeem the property from the mortgage. But when there is no
direct admission, but an acknowledgement is to be implied
from an admission of jural relationship, we have noticed some
confusion in the decisions rendered, as to what is an "admission
of jural relationship". The term ’jural’ means ’legal’ or
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’pertaining to rights and obligations’. ’Jural relationship
between parties’ means legal relationship between parties with
reference to their rights and obligations. In a mortgage, both the
mortgagor and the mortgagee, have certain rights and
obligations against each other. The rights/obligations of a
mortgagor or a mortgagee co-exist, like the two sides of a coin.
The mortgagor’s right of redemption is co-extensive with the
mortgagee’s right of sale or foreclosure (where such right is
recognized in law). Any statement by either, admitting the jural
relationship with the other, will extend the limitation for a suit
by that other, against the person acknowledging. It follows that
when a mortgagee makes a statement about his right to recover
the mortgage amount, such statement impliedly acknowledges
the corresponding right of redemption of the mortgagor.
Further, a statement admitting jural relationship, need not refer
to or reiterate the rights and obligations flowing therefrom.
Where a party to the mortgage, by his statement, admits the
existence of the mortgage or his rights under the mortgage, he
admits all legal incidents of the mortgage including rights and
obligations of both parties, that is mortgagee and mortgagor.
19. It is contended by the counsel for the respondents that the
statement by the mortgagee in the deed of assignment, that the
assignee will be entitled to receive the amount under the
original mortgage, is only an assurance made by a creditor to
his assignee about the assignee’s rights in respect of the
mortgage assigned to him, and such a statement cannot be said
to be an admission of jural relationship with the mortgagor. It is
pointed out that the earlier view, that when a mortgagee sells or
assigns his mortgage rights, the very fact that he was selling or
assigning his rights was a clear acknowledgement of a
subsisting mortgage and of his subsisting rights as a mortgagee,
is no longer valid. It also pointed out that in TILAK RAM
(supra), this Court clarified that the act of
assignment/transfer/sale of the mortgage rights, by the
mortgagee, by itself will not amount to an acknowledgement, if
the document merely described the status of the mortgagee or
described the right that was being transferred, without
indicating any intention to admit his jural relationship with the
mortgagor. It is, therefore, contended that the assignment deed
in this case cannot be considered to be an ’acknowledgement’.
20. The contention ignores the purport and scope of Section
18 and proceeds on the assumption that an acknowledgement
can be made only by a ’debtor’ and there is no question of a
’creditor’ making an acknowledgement. Section 18 of the Act
deals not only with acknowledgement of debts, but
acknowledgements with reference to all suits involving
properties or rights for which limitation is prescribed under the
Act. It sets out the circumstances in which a fresh period of
limitation can be computed for a suit. If the suit is one for
recovery of the amount due under an on-demand promissory
note, no doubt, only an acknowledgement by the debtor can
extend the period of limitation. But in regard to mortgages, T.P.
Act has created and recognized rights as well as obligations
both in the mortgagor and the mortgagee (vide Chapter IV of
the Transfer of Property Act, in particular, Sections 60 and 67).
Section 18 of the new Act provides that where before the expiry
of the prescribed period for a suit in respect of any property or
right, an acknowledgement of liability in respect of such
property or right has been made by the party against whom such
property or right is claimed, a fresh period of limitation shall be
computed from the time when the acknowledgement was so
signed. An acknowledgement under Section 18 can, therefore,
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be by a mortgagee also, and such acknowledgement will
extend the limitation for a suit against the mortgagee in respect
of the property or right claimed against him.
21. We may illustrate as to what is a mere reference or
description of the jural relationship and what constitutes an
intention to admit the jural relationship. If the relevant portion
of the Deed of assignment, sought to be relied on as an
acknowledgement merely stated that "X mortgaged the
schedule property in my favour under deed of usufructuary
mortgage dated (date) and I hereby assign the said mortgage in
your favour", it will not be an ’acknowledgement’ under section
18 of the Act. This is because it refers only to the jural
relationship, but does not show an intention to admit the jural
relationship with the mortgagor or admit his subsisting liability
as mortgagee of being redeemed. But the position will be
different, if the assignment deed further stated : "The said
mortgage is subsisting" or "The rights and obligations under the
said mortgage are enforceable", or "The assignee is entitled to
all benefits under the said mortgage", or "The assignee is
entitled to receive the amount advanced under the said
mortgage", or "The assignee is entitled to all rights and liable
for all obligations under the said mortgage", or "The assignee is
entitled to continue in possession until the mortgage is
redeemed". The use of any such words (which are illustrative
and not exhaustive) would show an intention to admit the jural
relationship, and therefore, amount to acknowledgement,
though they may not refer to the mortgagor’s right of
redemption. Ultimately, it is not the form of the words, but the
intention to admit the jural relationship with the mortgagor, that
will determine whether a statement is an acknowledgement.
22. In this case, the operative portion of the deed of
assignment dated 12.2.1954 (Ex.A-3) states that in
consideration of having received Rs.300/-, the mortgagee
(Krishna Pillai) was assigning the mortgage under deed dated
7.9.1935 executed in his favour by Manickam Pillai and
delivered possession of the mortgaged property to Soundararaja
Iyenger. The deed further states that the assignee
(Soundararaaja Iyenger) was entitled to receive all the amounts
as per the original mortgage. The further statement that the
assignee is entitled to receive the amount as per the original
mortgage is an assertion of the right of the mortgagee against
the mortgagor under the mortgage, and consequently, an
admission of the subsistence of the mortgage and of the jural
relationship between the mortgagee and the mortgagor. It is an
acknowledgement under Section 18 of the Act. The High Court
though referred to the said further statement in the deed of
assignment, missed its significance and erroneously held that
the deed contained only a passing reference to the mortgage,
and not a conscious acknowledgement.
23. When the said deed of assignment was executed on
12.2.1954, the mortgage dated 7.9.1935 was subsisting, as the
period of limitation at that time, was 60 years. In view of the
admission of jural relationship contained in the assignment
deed, operating as an acknowledgement of liability, a fresh
period of limitation started from 12.2.1954. When the suit was
filed on 16.11.1981, the new Limitation Act was in force under
which the period of limitation was 30 years. When the 30 years
period is computed from 12.2.1954, the suit filed in the year
1981 was clearly within limitation.
Re : question (ii) :
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24. The plaintiffs have made the necessary averments in the
plaint for invoking and seeking relief under the Tamil Nadu
Debt Relief Act, 1979. The plaintiffs contended that having
regard to the fact that the mortgagee and his successors had
been in possession for more than ten years, the mortgage stood
discharged with effect from 14.7.1978 under section 9 (5)(a) of
the Debt Relief Act and therefore, they are entitled to sue for
redemption.
25. The trial court held that the question of the mortgage
being discharged under the provisions of the Debt Relief Act,
1979, would arise only if the mortgage dated 9.7.1935 was
subsisting as on 15.7.1978 when the said Debt Relief Act came
into force. As it was of the view that the right to redeem was
barred by limitation as on 1.1.1971, and the mortgage was not
subsisting when the Debt Relief Act came into force, it held
that no relief could be claimed by the plaintiffs with reference
to the Debt Relief Act.
26. On the other hand, the first Appellate Court held that the
mortgage was subsisting on the date when the Debt Relief Act
came into force and therefore, the mortgage debt got discharged
under section 9 of the Debt Relief Act with effect from
14.7.1978, and the suit for redemption for redemption was not
barred. The High Court in second appeal held that the deed of
assignment dated 12.2.1954 did not amount to an
acknowledgement and consequently, the limitation for a suit for
redemption of the mortgage expired on 1.1.1971 having regard
to the provisions of section 30 read with Article 61(a) of the
Limitation Act. It also held that as the mortgage was not
subsisting when the Debt Relief Act came into force on
15.12.1978, the question of mortgage getting discharged under
Section 9 of the Debt Relief Act did not arise.
27. While dealing with the first question, we have held that
the period of limitation for the suit for redemption had to be
reckoned from 12.2.1954 and not from 7.9.1935. Therefore,
when the Debt Relief Act, came into force on 15.7.1978, the
mortgage was very much subsisting. Section 9 of the Debt
Relief Act contains special provisions in respect of mortgages.
Sub-section (1) of section 9 provides that the provisions of the
said section applies to all mortgages executed at any time
before 14.7.1978 and by virtue of which the mortgagee is in
possession of the property mortgaged to him. Sub-section (5) of
section 9 provides that where the mortgagee has been in
possession of the mortgaged property for an aggregate period of
10 years or more, then, the mortgage debt shall be deemed to
have been wholly discharged with effect from expiry of the
period of ten years or where such period expired before
14.7.1978, with effect from 14.7.1978. The said provision
applies as the mortgage transaction does not fall under any of
the exceptions enumerated in section 4 of the said Act. As the
mortgagee and his successors were in possession of the
mortgaged property ever since 7.9.1935, that is, for more than
10 years as on the date when the Act came into force, the said
mortgage debt stood wholly discharged with effect from
14.7.1978.
Re : Question (iii) :
28. As the mortgage stood discharged on 14.7.1978, the
plaintiffs will be entitled to a final decree for redemption
without the need to undergo the formality of a preliminary
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decree and taking of an account of the amount due under the
mortgage.
29. The next question is whether the plaintiffs are entitled to
a direction for accounts of the income/profits from the property
from 14.7.1978. The provisions of Order 34 Rules 7, 8, 8A, 9,
10 and 10A of Code of Civil Procedure are relevant in addition
to the provisions of T.P. Act. It is no doubt true that a decree for
redemption would include a direction for entire accounts
between the parties in relation to the mortgage. But the question
of directing accounts would arise only where it is necessary to
find out what is due from the mortgagor to the mortgagee, or
whether there is any over payment by the mortgagor to the
mortgagee. In this case, the mortgage was an usufructuary
mortgage, where the mortgagee was entitled to retain
possession until the mortgage money was paid. When the
mortgage debt got statutorily discharged, the mortgagee became
liable to deliver back possession to the mortgagor. In such a
situation, what the mortgagors-plaintiffs can claim from the
mortgagee, is not rendition of accounts, but mesne profits for
wrongful possession from the date of discharge of the mortgage
debt. There is, therefore, no question of accounting either of the
amounts due by the mortgagor to the mortgagee or of any
accounting of over-payments or for refund of any over-
payments by the mortgagee. In the suit, plaintiffs only sought
rendition of accounts but did not claim mesne profits nor paid
any court fee in regard to past mesne profits. Plaintiffs cannot,
under the guise of a claim for accounts, seek a decree for mesne
profits. After obtaining possession, it is open to them to sue for
such mesne profits as is permissible in law.
30. This takes us to the application filed by the third
defendant before the High Court for amendment of the
description of the property. The third defendant contended that
the description of the property in the plaint schedule was not in
accordance with the mortgage deed dated 7.5.1935, but referred
to a larger area with reference to the deed of settlement
executed by Thukkaram and Yasodhabai Ammal in favour of
the first plaintiff on 24.8.1981 (Ex. A-2). The relief of
redemption can be only in regard to the property mortgaged
under the deed of mortgage and not in regard to any other
property. Therefore, the decree has to be amended so as to bring
the description of the mortgaged property in consonance with
the description of the property mortgaged under the deed of
mortgage dated 7.9.1935 (Ex. A-1)
31. In view of the above, this appeal is allowed as follows :-
a) The judgment of the High Court is set aside and the
suit is decreed, holding that the plaintiffs are entitled
to a decree for redemption in regard to the suit
property. Final decree shall be drawn accordingly.
b) The prayer for rendition of accounts is rejected.
c) The schedule to the decree containing the description
of the mortgaged property shall be amended so as to
bring it in conformity with the schedule to the
mortgage deed dated 7.9.1935.
d) Appellants/plaintiffs will be entitled to costs
throughout.