K.N. Adikesavalu Naidu vs Manni Munuswami Chetty

Panchapakesa Sastri, J.—The respondent in this appeal filed the suit to enforce a mortgage, dated 9th October, 1918, executed in his

favour by defendants 1 and 2 in the action. The appellant was impleaded as the third defendant because he had a second mortgage dated 20th

November, 1918, in his favour. The present suit for sale was filed on the 24th December, 1942. The appellant had filed a suit of his own on his

mortgage, O.S. No. 75 of 1930 on the file of the District Munsiff''s Court, Trivellore, on 6th January, 1930, and obtained a preliminary decree. On

7th October, 1930, defendants 1 and 2 the mortgagors, sold a portion of the hypotheca to the present plaintiff for a sum of Rs. 300 in satisfaction

of the mortgage amount due to him under his mortgage, dated 9th October, 1918. Possession of the properties sold was delivered over to the

plaintiff who continued to enjoy the rents and profits thereof down to 1942. The appellant brought the properties to sale in execution of his own

mortgage decree and purchased the same on 19th February, 1934. After some proceedings he ultimately succeeded in getting possession of the

properties in 1943 in pursuance of the ultimate decree in his favour, dated 13th November, 1942, passed in S.A. No. 283 of 1941 arising out of

O.S. No. 207 of 1936 (District Munsiff''s Court, Trivellore) wherein it was held that the sale in respondent''s favour was invalid and could not

affect appellant''s rights. The present suit had been filed in 1942 itself after the said decision and before the plaintiff was deprived of his possession

by the appellant herein. The defence which was raised by the third defendant who is the only contesting defendant is that the suit is barred by

limitation under Article 132 of the Indian Limitation Act. As the mortgage was dated 9th October, 1918, and no period for payment was fixed, the

period of limitation would expire by 9th October, 1930. Prima facie the claim is barred by limitation.

For the plaintiff respondent, it is contended that the bar of limitation is got over by virtue of an acknowledgment made by the mortgagors which

is contained in their sale deed, dated 7th October, 1930, and also by the fact that the rents and profits must be deemed to have been received

during the period from 7th October, 1930 down to 1942. It is also contended that in any event, there is a fresh cause of action which accrues to

the present plaintiff, when the sale in his favour was declared inoperative or at any rate when he was deprived of the possession of the properties in

pursuance of the decree obtained by the appellant in S.A. No. 283 of 1941.

In second appeal, the learned Judge held that the acknowledgment by the mortgagors will not avail against the puisne mortgagee as the said

acknowledgment was long subsequent to the said mortgage in favour of the appellant. This position is now accepted as correct by the respondent.

So far as the receipt of the rents and profits are claimed to amount to "" payment "" u/s 20 of the Limitation Act, there is no evidence in the case

that the said rents were ever received before the period of limitation had expired, that is, before 9th October, 1930, or even before 7th December,

1930, twelve years from the date of the registration of the mortgage deed sued on. In fact, there is no evidence as regards the date of the first

receipt of rents. The respondent, therefore, cannot get over the bar of limitation u/s 20 of the Limitation Act,

The real question that remains to be decided is whether there was a fresh cause of action in favour of the respondent by virtue of the

proceedings referred to whereby the sale in his favour was found to be vitiated by lis pendens and a decree was given to the appellant in pursuance

of which he got possession from the respondent in 1943. The learned Judge has held that in the circumstances a fresh cause of action is available to

him on the principle of the rulings in Muthuveerappa Chetty alias Vellayappa Chetty Vs. Adaikappa Chetty and Others, and the other decisions

referred to therein. There it was held that where a debtor satisfied by payment his creditor''s claim for balance of money due but later sued for and

obtained an annulment of the satisfaction on the ground that satisfaction was obtained by coercion and got a decree for refund, the annulment gave

the creditor a fresh cause of action against the debtor and time began to run from the date of annulment. This question has since been considered

by a Bench of this Court in Kowtha Sooryanarayana Rao Vs. Sarup Chand Rajaji, , where under circumstances similar to the present it was held

that there was no fresh cause of action in favour of the first mortgagee who had to bring his own suit on the original mortgage which must be

deemed to have been kept alive. That decision refers to the earlier decisions relied on by the learned Judge and points out that those cases really

relate to cases where the satisfaction was subsequently got annulled at the instance of the party who gave the satisfaction and this operated to bring

about a fresh cause of action against the particular debtor. So far as the puisne mortgagee in the present case is concerned he was not a party to

the events which happened after his mortgage or to the transactions between the mortgagors and the plaintiff mortgagee. It was not at his instance

that any satisfaction was made towards the plaint mortgage nor did he attempt to have it cancelled or set aside. The sale in plaintiff''s favour turned

out to be invalid because the plaintiff mortgagee ignored altogether the existence of the puisne mortgagee and his rights, and purported to deal with

the mortgagors as if there was no intermediate encumbrance in favour of any other persons. The plaintiff took the risk of the sale turning out to be

invalid as against persons like the present appellant whose rights he had ignored altogether. He could not therefore be in a position to say as against

the appellant that there is a fresh cause of action in his favour on the original mortgage when he finds that his sale is declared invalid or when he is

compelled to restore back possession to the appellant who obtained the properties in auction in execution of his own decree on the mortgage. All

that the plaintiff is entitled to is to enforce his rights on the original mortgage again as against the puisne mortgagee, which right is reserved to him

u/s 101 of the Transfer of Property Act. It is in enforcement of that right that the present suit is filed. At the same time however he cannot enforce it

except within the time allowed by law for a suit on that mortgage. In the circumstances, there being no fresh cause of action, the suit can only be

regarded as a suit to enforce the mortgage of 1918. If so, the present suit is obviously barred by limitation as it is filed long after the expiry of the

period of twelve years under Article 132 of the Limitation Act. There are no grounds for extending the period of limitation. The suit must,

therefore, be dismissed. We allow the Letters Patent Appeal and restore the decree of the Subordinate Judge. The appellant will get his costs of

the second appeal and this Letters Patent Appeal also.