Konduri Suryanarayana Rao vs Vagasana Venkataraju

Varadachariar, J.—The only point for determination in this appeal is a question of limitation, which arises under the following circumstances.

The plaintiff sued on a mortgage bond (Ex. A) of 1905 and the principal contesting defendant, (the 11th defendant) had a mortgage, in his favour,

of 1902 (Ex. I). To get over the prima facie priority of Ex. I, Plaintiff relied on the fact that his mortgage Ex. A was practically a renewal of Ex. B,

which, being dated 24th May, 1892, was long anterior to Ex. I. The learned Subordinate Judge, in appeal, accepted the Plaintiff''s claim to priority

and gave him a decree as prayed for. On Second Appeal to this Court, Jackson, J., reversed this decision, holding that on the date of Ex. A, the

claim under Ex. B had become barred by limitation and therefore the Plaintiff was not entitled to priority as against the 11th defendant. Hence this

Letters Patent Appeal.

The way in which a renewal of an earlier mortgage operates as against intermediate transferees of the mortgaged property has been discussed in

Velayudha Reddi v. Narasimha Reddi (1916) 32 M.L.J. 263 and (Cadapalli) Yagnanarayana and Another Vs. Kaja Venkata Krishna Rao and

Others, . According to these decisions, the new mortgage may operate to keep alive the rights under the old mortgage, as against intermediate

transferees, on the analogy of part-payment; but the starting point for an action for the recovery of the debt will be fixed, not merely as against the

mortgagor but also as against intermediate mortgagees, in accordance with the terms of the new contract. The importance of this principle in the

present case arises out of this fact - that the renewal under Ex. A, was effected at a time, when according to the law as declared by a Full Bench of

this Court see Narayana Aiyar v. Venkataramana Aiyar I.L.R.(1902) 25 Mad. 220 the claim under Ex. B, had not become barred by limitation

and Ex. A allowed time for payment by instalments upto 1916. If the principle applied by the Privy Council in 8 CWN 186 (Privy Council) could

be invoked here, it might well be contended that, the rights not merely of the mortgagor and the mortgagee but of the puisne mortgagee as well,

must be judged of by the law as understood at the date of Ex. A, notwithstanding a judicial declaration of law to a different effect, by later

pronouncements of authority.

If however the 11th defendant is entitled to rely upon the later decision of the Privy Council in (1907) L.R. 34 I.A. 186 (Privy Council) and

contend that, on the application of the 12 years'' rule of limitation, the remedy under Ex. B must be held to have become barred on the date of Ex.

A, the Plaintiff may as well claim the benefit of Section 31 of the Limitation Act of 1908 which was introduced to remedy the hardship caused by

this very decision of the Privy Council. This position was not disputed before us, on behalf of the Respondent.

The main contention on behalf of the Respondent was that Section 31 of the Limitation Act of 1908, only provided a special period of grace of

two years, for instituting suits on mortgages of a particular description and that where no suit had been instituted within the period so allowed, no

general benefit could be held to have accrued to the holders of such mortgages, as if their mortgages had been revived even for purposes of

Sections 19 and 20 of the Limitation Act. This question has been dealt with, by a Bench of this Court, in Somisetti Seshayya Chetty and Others

Vs. Rolla Subbadu, minor by Next Friend, Rolla Ragadu and Others, and we see no reason to depart from the view there taken that with

reference to the special class of cases dealt with in Section 31, that section must be interpreted as prescribing a period of limitation even for the

purposes of the application of Sections 19 and 20 of the Limitation Act. The argument that the word ''prescribed'' in these sections must be

understood as only meaning prescribed in the second schedule to the Limitation Act is not warranted by the language of the sections and is

opposed to the weight of authority. Mr. Raghava Rao had to admit that that construction would exclude the possibility of a second

acknowledgment or part payment ever being available to save limitation, because it could be made available only by reading the schedule with

Section 19 or 20 of the Act.

The only decision in favour of Mr. Raghava Rao''s contention, namely, Dayaram Parashram Marwadi Vs. Laxman Runja Teli, has not been

followed by the other High Co arts and the preponderance of authority is certainly in favour of the view taken in Somisetti Seshayya Chetty and

Others Vs. Rolla Subbadu, minor by Next Friend, Rolla Ragadu and Others, . The declared object of the legislature in enacting Section 31 was to

remove the hardship caused by the Privy Council decision to persons who had theretofore acted on the basis of the applicability of the 60 years''

rule even to suits on simple mortgages. There is no reason why a provision introduced for this purpose should be unnecessarily restricted in its

scope or why the legislature should be assumed to have intended that all persons holding such mortgages should immediately rush to Court, even

though the mortgagors were prepared to make part payments or execute renewals. The effect of such a narrow construction is particularly

noticeable in this case, because in view of the terms of Ex. A, the mortgagee could not have filed a suit between 1908 and 1910 for the instalments

now in question (namely of 1913-16) and after having accepted Ex. A, he could not, even as against the mortgagor, have fallen back on his cause

of action under Ex. B.

Alternatively, Mr. Raghava Rao contended that the decision in Somisetti Seshayya Chetty and Others Vs. Rolla Subbadu, minor by Next

Friend, Rolla Ragadu and Others, should be restricted to acknowledgments or part-payments made between August 1908 and August, 1910 and,

in that view, (sic) at decision cannot avail the plaintiff in the present case. But having regard to the principle on which that decision rests, there is no

warrant for such restriction.

We are of opinion that the claim under Ex. B, was enforceable or at any rate must be deemed to have been enforceable, on the date of Ex. A,

and that the Plaintiff is accordingly entitled to claim priority as against the 11th defendant on that footing. The decision of Jackson, J., is therefore

set aside and the decree of the Subordinate Judge restored. The 11th defendant will pay the Plaintiff''s costs here and in the Second Appeal.