RAM LAGAN SINGH Vs. RAM BILOCHAN SINGH

JUDGEMENT

(1.) This first appeal is by the plaintiffs. The facts are that on 18 May 1925, defendants first party mortgaged certain property to defendants second party to secure an advance of Rs. 1800 On 7 January 1927, a two anna share in the same property was mortgaged to defendants third party to secure a loan of Rs. 600. The property was again mortgaged to the plaintiffs on 7 June 1927. This bond contained a provision that the plaintiffs should pay off an earlier mortgage to one Jugeshwar Singh which had been executed in 1923 and should be subrogated to his rights. The due date of Jugeshwar Singh's mortgage was 31 July 1934. The plaintiffs redeemed Jugeshwar Singh's mortgage by the payment of Rs. 3515 on 26 May 1927, that is to say, a few weeks before the mortgage in their favour was executed. The plaintiffs sued on the mortgage on 22 June, 1937. Defendants second and third parties claimed priority as their mortgages were earlier in time than the mortgage in suit. The plaintiffs, however, relied on the fact that they had redeemed the mortgage of 1923 and been subrogated to the rights of Jugeshwar, the mortgagee under that bond. To this defendants second and third parties replied that more than 12 years had elapsed since the due date of that bond. The plaintiffs answer to this was that they acquired a fresh terminus a quo from the date on which Jugeshwar's mortgage was redeemed. The contention was negatived in the Court below but was again raised by the plaintiffs in the present appeal. In the view which I take of this case, however, it is unnecessary to decide this question. The reason is this: in the plaintiffs mortgage of 6 June 1927, the mortgagor acknowledged that the rights of Jugeshwar under the bond of 1923 had, vested in the plaintiffs. It is not disputed that this acknowledgment is sufficient to provide a fresh terminus a quo against the mortgagor, but it is contended that it does not provide a fresh terminus a quo against defendants second and third parties. The solution of that question depends on the construction to be placed on Section 19(1), Limitation Act, which provides: Where, before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the person against whom such property or right is claimed, or by some person through whom he derived title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2.) The question resolves itself into this: Is the mortgagor a person through whom defendants second and third parties derived their title? It is contended on their behalf that as the mortgages in their favour were executed before the acknowledgment they are not bound by it. Reliance is placed on the decision in Ram Sarup V/s. Sahu Bhagwati Prasad A.I.R. 1936 All. 636 , where it was stated that an acknowledgment by a mortgagor cannot be said to be one by a person through whom a mortgagee derives his title or liability if the acknowledgment is subsequent to the latter's mortgage, Reference was made in that case to certain English decisions one of which was Bolding V/s. Lane (1863) 1 De. G.J. & Section 122, where Westbury L. C. held that an acknowledgment by a mortgagor does not preclude a puisne mortgagee from relying on limitation where the mortgage has been taken previous to the acknowledgment. It does not, in my opinion, serve any useful purpose to refer to English cases on this point which must be decided on the language of the Indian statute. As was observed in Modhugari Narayana v. Venkataramanna Patnaik A.I.R. 1935 Mad. 899 : Whatever may be said in England to be the effect of holding that an acknowledgment by mortgagor is binding on a prior purchaser or incumbrancer--and it is not clear that even the English authorities are satisfied with Lord Westbury's description monstrously unjust--we do not see any injustice in so holding in this country where we have got a Law of Registration and every purchaser or encumbrancer can easily know of the existence of any prior mortgage The subsequent purchaser or encumbrancer who knows the existence of a mortgage ought also to know the possibility of the mortgage being kept alive by acknowledgment or payment and as he purchased only the equity of redemption it cannot be said that he is disappointed. He gets what he bargained for. He has no right to expect that the mortgage would become barred and he can make a profit in the transaction.

(3.) Accordingly it was held in that case that an acknowledgment by the mortgagor subsequent to the sale kept the mortgage alive and that the purchaser of the equity of redemption was liable. A similar view has been taken in a large number of cases in this country: Krishna Chandra V/s. Bhairab Chandra 32 Cal. 1077 , Lakshmanan Chetty V/s. Muthaya Chetty A.I.R. 1920 Mad. 1026, is R.H. Skinner v. Bank of Upper India Ltd. A.I.R. 1937 Lah. 507 , Velauda Reddi V/s. Narasimha Reddi A.I.R. 1918 Mad. and Arbindakeb Rai V/s. Jageshar Rai A.I.R. 1919 All. 242 . The last case is a decision of a Division Bench of the Allahabad High Court and Walsh, J. in that case observed: The real question is, not when was the acknowledgment given nor when did the transaction of transfer take place, but was the acknowledgment really a genuine acknowledgment as and when it was given?