OFFICIAL ASSIGNEE OF MADRAS Vs. SNATESA ACBARI

JUDGEMENT

(1.) The sole question in this appeal is whether certain words used in a deed of mortgage dated 4 July, 1924, amount to an acknowledgment of liability in respect of two earlier mortgages within the meaning of Section 19 of the Limitation Act. One Sundaravela Achari mortgaged the property in the suit to one Manicka Chetty on 9 August, 1921, to secure a sum of Rs. 5,000. On 6th January, 1923, he executed a second mortgage of the property in favour of Manicka Chetty to secure a further advance of Rs. 1,000. On 4 July, 1924, Sundaravela Achari executed a usufructuary mortgage of the property in favour of one Rajagopala Chetty for the sum of Rs. 1,000. The first two mortgages fell to the share of one Kuppuswami on a partition. Kuppuswami is now an insolvent and is represented by the appellant, the Official Assignee. The creditors will be entitled to the benefit of the first two mortgages if they are still enforceable. The suit out of which this appeal arises was not, however, filed until 13 July, 1936, more than twelve years after the second of the two mortgages was executed, but the appellant says that the following passage in the usufructuary mortgage deed of 4 July, 1924, saves the earlier mortgages from being time-barred: If we commit default in respect of any condition, you shall bring the said property to a public or private sale, take the principal and interest and also the auction expenses as per account, pay Kilanur Manicka Chetty if any debts incurred for the benefit of our family has to be paid to him in respect of the said property, and pay the balance, if any, to us.

(2.) Mr. Justice Somayya, who decided the case, held that this passage could not be read as an acknowledgment within the meaning of Section 19 of the Limitation Act. The learned Judge considered that the words might be read as indicating that some money was due on previous mortgages but it had not been shown that there were no other debts secured on the property and therefore the passage did not necessarily apply to the mortgages of the 9 August, 1921 and on the 6th January, 1923.

(3.) We are not disposed to agree with the learned Judge that the passage .relied on to save limitation, ought to be read as indicating that the property was subject to earlier mortgages. The clause provides that in default of the condition of the mortgage, the usufructuary mortgagee is to sell the property, and out of the proceeds first pay himself and then pay Manicka Chetty, handing the balance to the mortgagor. Manicka Chetty's mortgages were earlier and therefore ought to come first, but Manicka Chetty comes second. Read alone the clause might be taken to refer to the possibility of subsequent advances by Manicka Chetty. We are, however, in agreement with the learned Judge that there is no evidence on record which identifies the word debts used in this passage to the mortgage deeds of 9 August, 1921, and 6 January, 1923 and that in the words used there is no acknowledgment of these debts.