PAKSHI RAMASWAMI CHETTIAR Vs. KESAVAN CHETTIAR

JUDGEMENT

(1.) There is only one question in this appeal, a question of limitation. The suit out of which the appeal arises was filed by the appellants in the Court of the District Munsif of Mayavaram to enforce payment of two mortgages, one dated the 1st November, 1921, for Rs. 1,000 and the other dated the 8 November, 1921, for Rs. 100. The first one was a usufructuary mortgage. The appellant obtained a preliminary mortgage decree on the 10 March, 1932, and a final decree on the 18 September, 1933, but did not apply for the sale of the mortgaged property until the 17 March, 1938. Throughout he had remained in possession of the property as a usufructuary mortgagee. The mortgagors contended that as more than three years had elapsed from the date of the final decree an application in execution was barred by the law of limitation. The District Munsif decided the question against the mortgagors and allowed the application for execution to proceed. His decision was affirmed on appeal by the Subordinate Judge of Mayavaram. The mortgagors then appealed to this Court and the appeal was allowed by King, J., who gave a certificate which has permitted the appellant to file this appeal under Clause 15 of the Letters Patent.

(2.) The decision turns on the interpretation to be placed upon Section 20 of the Limitation Act. Sub-section (1) of that section states 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. Sub-section (2) says that where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of the land shall be deemed to be a payment for the purpose of Sub-section (1). There is added to the .section an explanation which states that the word debt includes money payable under a decree or order of Court. Therefore when a usufructuary mortgagee is in possession, what he receives by way of rent or produce from the mortgaged property shall be taken to represent interest on the mortgage-debt, and each receipt starts a fresh period of limitation. The explanation makes it quite clear that the provisions of Sub-section (2) apply-even when a decree has been passed in favour of the mortgagee.

(3.) The appeal was allowed by King, J., because he was of opinion that once the final decree had been passed in the mortgage suit, the appellant could not be regarded as being in possession as a mortgagee, and he relied on the decision of the Privy Council in Sundar Koer V/s. Rai Sham Krishen (1906) 17 M.L.J. 43 : L.R. 34 I.A. 9 : I.L.R. 34 Cal. 150 (P.C.), where Lord Davey in delivering the judgment of the Board said that the scheme and intention of the Transfer of Property Act was that a general account should be taken once for all, and an aggregate amount be stated in the decree for principal, interest and costs due on a fixed day and that after the expiration of that day, if the property should not be redeemed, the matter should pass from the domain of contract to that of judgment, and the rights of the mortgagee should thenceforth depend, not on the contents of his bond, but on the directions in the decree. In Sundar Koer V/s. Rai Sham Krishen (1906) 17 M.L.J. 43 : L.R. 34 I.A. 9 : I.L.R. 34 Cal. 150 (P.C.), the Privy Council did not hold that a usufructuary mortgagee ceases to be in possession of the mortgaged property as mortgagee simply because a final decree for sale is passed in his favour. Notwithstanding that the matter is taken from the domain of contract and the rights of the parties fall to be regulated by the decree, the mortgagee may nevertheless still retain his character of mortgagee until the property is sold. His security for the loan made by him is the property which has been mortgaged to him. The final decree has decided what is due by the mortgagor to him and settles the question of interest. It also gives the mortgagee the right to sell, but the mortgagor in law has the right to redeem his property until the sale held in pursuance of the mortgage decree has been confirmed. The provisions of Order 34, Civil Procedure Code, make this quite clear.