PAVAYI Vs. PALANIVELA GOUNDAN

JUDGEMENT

(1.) This appeal raises a question of limitation and one of some difficulty. The appellants filed a suit in the Court of the District Munsif of Salem to enforce a mortgage which had been created on the 12 November, 1913 by a Hindu father and his son. The appellants are the assignees of an interest in the mortgage. Under the terms of the mortgage deed the debt became payable in one year. On the 16 January, 1919 a creditor of the mortgagors obtained a money decree against them and in execution of that decree purchased the equity of redemption. On the 16 December, 1920, the first mortgagor paid to the mortgagees Rs. 200, towards the amount of interest then due in respect of the mortgage debt. A record of this payment was endorsed on the deed and signed by the first mortgagor. A suit to enforce the mortgage was filed on the 9 December, 1932. The question which arises is whether the payment of the Rs. 200, on the 16 December, 1920, saves the suit from being barred by the law of limitation. That the personal remedy against the mortgagors is barred is conceded but it is said that inasmuch as the payment of the Rs. 200 towards interest was made within eight years of the creation of the mortgage a fresh period of limitation started and the suit having been filed within twelve years from the date of the payment of interest the appellants are entitled to have the property sold in order to realise what is due to them. The District Munsif held that the payment of interest on the 10 of December, 1920, did operate to save limitation and granted the appellants a decree. On appeal the Subordinate Judge of Salem held that the suit was out of time.

(2.) The Subordinate Judge's decision was based on his interpretation of Section 20 of the Limitation Act which says that where interest on a debt or legacy is, before the expiration of the prescribed period, paid as such by the person liable to pay the debt or legacy, or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made. By the Indian Limitation (Amendment) Act, 1927, a proviso was inserted to the effect that after the 1 January, 1928 acknowledgment of the payment must be in the handwriting of, or in a writing signed by, the person making the payment. As I have indicated there was such an acknowledgment in writing by the first mortgagor, but as this was not necessary at the time the Rs. 200 was paid the mere payment would have been sufficient if the section applied. In this Court it has been contended on behalf of the appellants that both Secs.19 and 20 can be called in aid to save limitation. Section 19 states that where before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability has been made in writing signed by the party against whom the property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was signed.

(3.) For the respondent, it has been argued that inasmuch as the mortgagors had parted with all their interest in the properties as the result of the Court auction on the 16 January 1919, they were not personally liable to pay the mortgage debt, and therefore did not come within Section 20 of the Limitation Act. On the same basis it was contended that they were not in a position to give an acknowledgment of liability within the meaning of Section 19. There are several decisions of this Court bearing on the question, which has also been raised before the Calcutta High Court. I will state the effect of these decisions and then discuss the principle involved in the light of certain English decisions which in my opinion also have bearing.