A VENKU DIKSHITULU Vs. GUNDU SUBBAYYA SETTI

JUDGEMENT

(1.) This appeal filed against the judgment of Viswanatha Sastry J., raises the question as to the power of an Official Receiver to keep a debt alive by making a payment under Section 20 of the Indian Limitation Act.

(2.) The material facts may be stated in a few words. The defendant in O. S. No. 9 of 1950 on the file of the Subordinate Judges Court, Kurnool, executed a mortgage on 4-11-1930 for Rs. 8,000.00. Treating it as an act of insolvency, one of his creditors presented a petition for adjudicating him an insolvent. Accordingly, he was adjudicated on 29-12-1931 in I. P. No. 73 of 1931. After the order of adjudication, the Official Receiver, in whom the estate of the insolvent had vested, had the mortgage debt scaled down under the provisions of the Madras Agriculturists Relief Act to Rs. 6,220.00 as on 1-10-1937 with interest at 6 1/4 per cent, thereafter. Subsequently, he applied to the Insolvency Court for permission to sell a house of the insolvent in order to pay off the mortgage debt due to the plaintiff in the aforesaid suit. The requisite permission was granted and the Official Receiver sold the property and paid a sum of Rs. 2,932-6-8 towards the mortgage debt on 2-7-1940. He also made an endorsement of part payment on the mortgage deed, Ex. A-1, which is in these words: "As ordered by the District Court in Dis. No. 2256, dated 29-6-1940 in I. P. No. 73 of 1931 (I. P. No. 20 of 1932, O. R.) in M. P. No. 204 of 1940 District Court (a sum of Rupees two thousands, nine hundred and thirtytwo, annas six and pics eight) Rs. 2,932-6-8 was paid by Cheque No. 1,56,563 Book No. 1566 dated 2-7-1940 to Gunda Subbayya Chetti, the mortgagee."The adjudication was annulled on 17-2-1948, since he paid off all his simple money creditors by that date. So far as the mortgage was concerned, no further payment other than the one made by the Official Receiver was made.

(3.) This had obliged the mortgagee to institue a suit on 9-1-1950. One of the defences to the suit was limitation. In answer to the plea of limitation, the plaintiff called in aid the payment made by the Official Receiver in July, 1940. The trial Court accepted the contention of the plaintiff that the suit was saved from the bar of limitation by reason of the payment which fell within the purview of Section 20 of the Limitation Act and decreed the suit.