R NARAYANA REDDIAR Vs. VENKATESA REDDIAR

JUDGEMENT

(1.) On the 30 November, 1924, the first defendant executed a mortgage of immovable properties in favour of the plaintiff's father. On the 26 November, 1927, the first defendant created a second mortgage over some of the properties covered by the first mortgage. The second mortgage was in favour of one Krishnaswami Naicker, whose legal representatives are defendants 4 to 6. On the 29 September, 1928, the mortgagor was adjudicated an insolvent. Four of the mortgaged properties had been sold before the adjudication. On the 17 February, 1931, the Official Receiver sold the rest of the properties, subject, of course, to the mortgages which had been created. The properties were purchased by Ramaswami Reddiar, the elder brother of the second defendant. Ramaswami Reddiar is now dead and is represented by the second defendant. On the 15 November, 1936, the second defendant paid Rs. 50 towards the interest due on the mortgage created in favour of the plaintiff's father and the payment was duly acknowledged by an endorsement on the mortgage deed. It is common ground that the second defendant was a person who could make the payment and endorsement. See Askaram Sowkar V/s. Venkataswami Naidu(1920) 40 M.L.J. 218 : I.L.R. 44 Mad. 544.

(2.) On the 11 November, 1940, which was after the death of his father, the plaintiff filed a suit in the Court of the Subordinate Judge of Cuddalore to enforce the mortgage. He obtained a mortgage decree, but the Subordinate Judge excluded the properties covered by the second mortgage. In respect of these properties he was of the opinion that the mortgagee's claim was time-barred. The plaintiff has appealed from this finding.

(3.) The Subordinate Judge based his decision on the judgment of the Full Bench in Pavayi v. Palanivelu , but that case has no application here. There it was held that a mortgagor who had lost all interest in the mortgaged property and was not personally liable to pay the debt could not bind by an acknowledgment under Section 19 or by a payment of principal or interest under Section 20 of the Limitation Act, the person on whom his interest had devolved. In order to bind the assignee in such circumstances the acknowledgment or payment must be made before the mortgagor had parted with his interest in the property. We are concerned in the present case with the question whether a payment falling within Section 20--made, of course, by a person entitled to do so--starts a new period of limitation which affects a second mortgagee whose charge was created before the payment.