R. Narayana Reddiar vs Venkatesa Reddiar and Others

Alfred Henry Lionel Leach, C.J.—On the 30th November, 1924, the first defendant executed a mortgage of immovable properties in favour

of the plaintiff''s father. On the 26th November, 1927, the first defendant created a second mortgage over some of the properties covered by the

first mortgage. The second mortgage was in favour of one Krishnaswami Naicker, whose legal representatives are defendants 4 to 6. On the 29th

September, 1928, the mortgagor was adjudicated an insolvent. Four of the mortgaged properties had been sold before the adjudication. On the

17th February, 1931, the Official Receiver sold the rest of the properties, subject, of course, to the mortgages which had been created. The

properties were purchased by Ramaswami Reddiar, the elder brother of the second defendant. Ramaswami Reddiar is now dead and is

represented by the second defendant. On the 15th November, 1936, the second defendant paid Rs. 50 towards the interest due on the mortgage

created in favour of the plaintiff''s father and the payment was duly acknowledged by an endorsement on the mortgage deed. It is common ground

that the second defendant was a person who could make the payment and endorsement. See Askaram Sowkar v. Venkataswami Naidu(1920) 40

M.L.J. 218 : ILR Mad. 544.

On the 11th November, 1940, which was after the death of his father, the plaintiff filed a suit in the Court of the Subordinate Judge of

Cuddalore to enforce the mortgage. He obtained a mortgage decree, but the Subordinate Judge excluded the properties covered by the second

mortgage. In respect of these properties he was of the opinion that the mortgagee''s claim was time-barred. The plaintiff has appealed from this

finding.

The Subordinate Judge based his decision on the judgment of the Full Bench in Pavayi and Others Vs. Palanivela Goundan and Others, , but

that case has no application here. There it was held that a mortgagor who had lost all interest in the mortgaged property and was not personally

liable to pay the debt could not bind by an acknowledgment u/s 19 or by a payment of principal or interest u/s 20 of the Limitation Act, the person

on whom his interest had devolved. In order to bind the assignee in such circumstances the acknowledgment or payment must be made before the

mortgagor had parted with his interest in the property. We are concerned in the present case with the question whether a payment falling within

Section 20--made, of course, by a person entitled to do so--starts a new period of limitation which affects a second mortgagee whose charge was

created before the payment.

A similar question arose in the recent case of Thayyanayaki Ammal by agent Viswalingam Chettiar Vs. Sundarappa alias Apath Sahaya

Kandiar, by his mother and guardian Alamelu Ammal (dead) and Others, , which was decided by a Bench composed of Wadsworth and Patanjali

Sastri, JJ. Their decision supports in full the case for the appellant. In that case the suit was on a mortgage executed on the 4th June, 1913. The suit

was instituted in 1937. The mortgagee relied on five endorsements evidencing part-payments by the mortgagor. These endorsements were dated

respectively the 11th December, 1914, 9th April, 1916, 6th April, 1922, 23rd February, 1928, and 13th November, 1932. In 1917, the

mortgagor had sold one of the properties covered by the mortgage and the question which the Court had to decide was whether the part payments

by the mortgagor operated to save the right of suit against the purchaser. The Court held that a part-payment by a mortgagor who has parted with

the mortgaged property, but is personally liable to pay under his covenant, saves the right of suit against the purchaser of the equity of redemption.

A payment made by a parson entitled to make the payment u/s 20 of the Limitation Act creates a fresh period of limitation against all persons who

might have been sued within the prescribed period. That decision is binding on us and must be applied here. We may add that we respectfully

agree with the judgment in that case. A payment which falls within Section 20 of the Limitation Act starts a fresh period of limitation for an action

on the debt against all persons who are liable thereon.

In Lakshmi Naidu v. Gunnamma (1920) 40 M.L.J. 218 : ILR Mad. 544 Varadachariar and Burn, JJ., held that Section 20 does not

contemplate that when there are more persons than one liable in respect of a debt all of them should join in making a part-payment. A part-

payment by one of the persons liable avails not merely against the person making it but also against other persons liable in respect of the debt. It

may be added that in Askaram Sowkar v. Venkalaswami Naidu (1934) 68 M.L.J. 470 : ILR Mad. 418 where it was held that a purchaser of the

equity of redemption is a person liable to pay the mortgage debt within the meaning of Section 20, it was pointed out that a second mortgagee was

the person liable to pay the first mortgagee on the ground that he could only get the property by redeeming the first mortgage.

Accordingly we hold that the payment and the endorsement by the defendant of Rs. 50 towards interest on the 15th November, 1936, saves

the full rights of the mortgagee.

The appeal will be allowed with costs here and below against respondents 4 to 6, who have contested the appeal.