Palthankam and others vs Arumanayakam and others

Nainar Sundaram, J.—This second appeal arises out of a suit for redemption. The property, subject-matter of the mortgage, was of an

extent of 35 cents. Out of that, the predecessor-in-title of the plaintiffs purchased the equity of redemption with regard to 22 cents under Ex. A3,

dated 26th May, 1943. The original mortgagor redeemed the entirety of 32 cents under Ex. A6, dated 24th September, 1949. The defendants

claim under the original mortgagor. The point that was put against the plaintiffs by the two courts below when they non suited the plaintiffs is one of

limitation. It has now been well settled:�

Since subrogation of the redeeming co-mortgagor would give him the right under the original mortgagee to hold the non-redeeming co-mortgagors

property as security to get himself reimbursed for the amount paid by him in excess of his share of the liability, it follows that a suit for possession of

his share or portion of the property by a non-redeeming co-mortgagor on payment of the proportionate amount of the mortgage debt, may be held

either within be limitation prescribed for a suit for redemption of the original mortgage or within the period prescribed for a suit for contribution by

the redeeming co-mortgagor against the Other co-mortgagor.

Vide Valliamma Champaka Pillai Vs. Sivathanu Pillai and Others, By this I find, the majority view of the Full Bench of this Court in Valliamma v.

Sivathanu AIR 1964 Mad. 269=77 L.W. 27 (F.B.) has been confirmed. The majority view is to the following effect:�

Thus there will be two periods within which a non-redeeming mortgagor can obtain his property from his co-mortgagor who had redeemed, the

first is based on the rule of subrogation and the second is the correlative obligation in the redeeming co-mortgagor to give up the property

belonging, to his co-mortgagor on being paid the money due by him. In the former case, where the mortgage is possessory, the period of limitation

will be governed by Art. 147 (Art. 136 of the Travancore Limitation Regulation) and the starting point for limitation will be the same as for the

original mortgage redeemed. In the latter case, the non-redeeming co-mortgagor will have a period of 12 years from the date of redemption of the

original mortgage by the other co-mortgagor. It will be open to the non-redeeming co-mortgagor to take advantage of any one of these periods

whichever is to his advantage.

I had occasion to, follow this ratio in A. Grant v. S.K. Yesu Dasan App. No. 789 of 1977�Judgment dt. 7th July, 1982). It is admitted that if

the second period, namely, the period prescribed for a suit for contribution by the redeeming co-mortgagor against the other co-mortgagor, being

twelve years from the date of the redemption in the instant case from the date of Ex. A6 namely 24th September, 1949 is counted, as the time for

a suit for the present nature by the non-redeeming co-mortgagor, the suit was out of time. But Miss O.K. Sridevi, learned counsel for the plaintiffs-

appellants herein, would contend that the first period, namely, the period prescribed for a suit for redemption of the original mortgage could be

availed of and if so done, the period for redemption of the original mortgage could not be said to have lapsed, because within the said period there

were acknowledgments as per Exs. A4 and A5, deeds of assignment of mortagee''s rights and hence on that basis learned counsel says that the

suit filed could not be stated to be out of time. Learned counsel expresses a grievance-legitimately in my view that the lower appellate Court has

not at all adverted to this aspect. Learned counsel wants to bring the deeds of assignment of mortagee''s rights as amounting to acknowledgments

of the mortagor''s right of redemption within the meaning of S. 18 of the Limitation Act, 1963, corresponding to S. 19 of the Limitation Act, 1908.

The word ''acknowledgment'' occurring in S. 18 is certainly not a word of art and it has got a potency ,of course, plain and literal.

Acknowledgment means an admission of the factum of a liability on the part of the person acknowledging. No particular form is prescribed for

such admission. It may be express or implied and it could also be a matter of inferences to be drawn by a proper construction of the document

which is stated to contain the acknowledgment. The rule of construction countenanced by Courts in this behalf is of a liberal nature. In construing

the documents stated to contain the acknowledgment, the Court should read the documents as a whole and consider the surrounding

circumstances. But the section does require a definite acknowledgment of liability. The document must contain an acknowledgment of liability

within itself though the rule of construction may be liberal and such a construction must certainly spell out this element of definiteness of

acknowledgment of liability.

In Nallathambl Nadar v. Ammal Nadachi AIR 1964 Mad. 169 = 77 L.W. 27 (F.B.), a Bench of this Court countenanced the essential

requirements of acknowledgment under S. 19 of the Limitation Act, 1908 in the following terms:

There are in essence two essential requirements of the Section: (1) there should be an acknowledgment of liability in respect of the property or the

right in question; and (2) it should be by the party against whom such property or right is claimed. An acknowledgment of liability presupposes that

the person acknowledging possesses some interest which can be bound by his statement. If he has no such interest, it will be a misnomer to call his

statement, an acknowledgment of liability.

Again, it is a well-settled rule an acknowledgment of liability must involve an admission of a subsisting jural relationship between the parties and a

consciousness and an intention of continuing such a relationship until it is lawfully terminated.

�Head Note

Coming to the present question as to how far a deed of assignment of a mortgage executed by a mortgagee would amount to acknowledgment

of the mortgagor''s right of redemption, the case law on the subject is interesting, but, ultimately I find that the rule has been settled by

pronouncements of the highest Court in the land beyond ambiguity. In Sidhari Rama v. Gargoi Din AIR 1924 All. 458, a mortagee executed a sale

deed in favour of the defendant, of mortagee rights in a grove and in that sale deed, he stated that he was a mortagee of the grove and he was

telling his rights as mortagee to the defendant. It was held:

� the very fact of the mortagee selling his mortgage rights amounts to an express acknowledgment of a subsisting mortgage and of his subsisting

rights which he was competent to sell, that the very fact of the defendant purchasing those rights was an acceptance on his part of an existing

mortgage, a mortgage which was in force as a subsisting mortgage on the date of the sale to him, and that, therefore, be cannot set up any defence

inconsistent with the mortgagee''s rights.

In Padmanabha v. Lakshmi AIR 1953 TC 244, the Bench countenanced that a deed of assignment by a mortgagee of an existing mortgage right

constituted valid acknowledgment to save limitation for a suit for redemption. There was an assignment of mortgage right and the assignee created

another mortgage in respect of the mortgage right and it was held there was clear admission that be had at that time only mortgage right over the

property, implying thereby that the property was liable to be redeemed.

In Sankara Pillai Kujukrishna Pillai Vs. Ananda Pillai Bharathi Amma, the Bench held:

...the real nature of the transaction rather than the name given to it by the parties should decide its nature, that whether or not there is an

acknowledgment is to be decided only on the recitals contained in the document, and that the acknowledgment of the subsistence of the mortgage

by the mortgagee is binding on his assigned who derives his title to the mortgage right from him and gives fresh starting point of limitation for a suit

for redemption.

In Khan Bahadur Shapoor Fredoom Mazda Vs. Durga Prosad Chamaria and Others, on the question of acknowledgment as prescribed by S.

19 of the Limitation Act, 1908, the following observations should be taken note of:�

It is thus clear that acknowledgment as prescribed by S. 19 merely renews debt; it does not create a new right of action. It is a mere

acknowledgment 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 acknowledgment is bated must relate to a present subsisting liability though the exact nature of the

specific character of the said liability may not be indicated in words. Words used in the acknowledgment must, however, indicate the existence of

jural relationship between the parties, such as that of debtor and creditor, and it must appear that be 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. The admission in question need not be express but must

be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a

subsisting liability as at the date of the statement. In construing words used in the statements made in writing in which a plea of acknowledgment

rests oral evidence has been expressly excluded but surrounding circumstances can always be considered. 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. Broadly stated, that is the effect of the relevant provisions contained in S. 19, and there is really no

substantial difference between the parties as to the true legal position in this matter.

�page 1238.

In Tilak Ram and Others Vs. Nathu and Others, it was observed as follows:�

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 an expressly 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 far-fetched process of

reasoning.

�page 939

In Lakshmirattan Cotton Mills Co.Ltd. and Behari Lal Ram Charan Vs. The Aluminium Corporation of India Ltd., the principle was summed up

as follows:-

It is clear that the statement on which the plea of acknowledgment is founded must relate to a subsisting liability as the section requires that it must

be made before the expiration of the period prescribed under the Act. It need not, however, amount to a promise to pay, for, an acknowledgment

does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific

character of the liability. The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence

of a jural relationship between the parties, such as, for instance, that of a debtor and a creditor, and the intention to admit such jural relationship.

Such an intention need not be in express terms and can be inferred by implication from the nature of the admission and the surrounding

circumstances. Generally speaking, a liberal construction of the statement in question should be given. That of course does not mean that where a

statement is made without intending to admit the existence of jural relationship, such intention should be fastened on the person making the

statement by an involved and far-fetched reasoning.

Ramanujam, J. in O.M. Jalali Vs. Anusuddin and Others, referred to some of the pronouncements and on the facts of that case, the learned

Judge found that the assignment deed made it clear that the assignment was only of the mortgagee''s rights and the learned Judge held that it would

amount to an acknowledgment within the meaning of S. 19 of the Limitation Act, 1908.

In C. Veerabahu Pattar Vs. P. Eswara Pillai, V. Ramaswami, J. referred to the case law on the subject and on facts the learned Judge held that

there was only a mere transfer of the right in the mortgage and the recitals were only descriptive of the interest assigned and would not amount to

an acknowledgment of the liability of the subsisting mortgage to be redeemed.

In Gurbu Singh v. Chinti 1984 Punjab & Haryana 17 the Bench dealt with a case where A made a gift of his mortgagee rights in land owned

by C in favour of B and in the gift deed, apart from the area of the land and the owner''s name, no other particulars of the mortgage were

mentioned and it was held that mere description of the gifted property as mortgagee rights in the gift deed did not amount to acknowledgment

under S. 19 of the Limitation Act 1908.

The acknowledgment must relate to a subsisting liability and it must indicate the existence of jural relationship between the parties and the

intention to admit such jural relationship. Such an intention need not be in express terms and can be inferred by implication from the nature of the

admission and the surrounding circumstances. A bare assignment by a mortgagee of his mortagee rights to a third person does not necessarily

amount to an acknowledgment of the right of redemption of the mortgagor unless the statement stated to be acknowledgment, relates to a

subsisting liability and indicates the existence of jural relationship between the parties and further, the intention to admit such jural relationship.

Coming to the present case, unfortunately, I find the lower appellate Court has no at all adverted to the first period of limitation, namely, the period

prescribed for redemption of the original mortgage as per the principles traced above, and rendered a specific decision one way or the other on

this question after finding out as to whether acknowledgments could be spelt out from the deeds of assignment, making the suit filed within time.

The lower appellate Court is duty bound to assess the factual and legal implications of the deeds of assignment, construing them in the light of the

principles enunciated by judicial precedents. Since there is an omission on the part of the lower appellate Court to advert to and adjudicate these

questions, I feel obliged to remit the matter back lo the lower appellate Court for it to 1 examine it afresh in the light of the principles discussed

above and assessing the facts of the case in relation thereto. Mr. P. Ananthakrishna Nair, learned counsel for the defendants, respondents herein, is

not adverse to this course being adopted. On the other hand, Miss O.K. Sridevi, learned counsel for the plaintiffs, appellants herein, states that by

this course only substantive justice will be done since the parties may desire to place further evidence also on this question. Hence, in the interest of

justice and in the interest of the parties, I am inclined to allow, and I do allow, this second appeal, set aside the judgment and decree of the lower

appellate Court and remit the matter back to the lower appellate Court for fresh consideration in the light of the observations and directions

adumbrated above. The lower appellate Court will permit the parties to place further evidence as they may deem it necessary on this question. The

parties are directed to bear their respective costs upto this stage. Further costs will abide the result before the lower appellate Court. The plaintiffs,

appellants herein, will be entitled to refund of the Court fee paid on the memorandum of second appeal.