OFFICIAL ASSIGNEE OF MADRAS Vs. NSUBRAMANIA AIYAR

JUDGEMENT

(1.) This is an appeal from a judgment of Coutts-Trotter, J. on what is undoubtedly a difficult point under the Limitation Act. The case has been very clearly argued before us by Mr. O. T. Govindan Nambiyar for the appellant and Mr. Anantakrishna Aiyar for the respondent. The facts appear clearly from the judgment of the Court below and it is sufficient to state them shortly for the purpose of this judgment.

(2.) The Official Assignee is suing here as the representative of the estate of an insolvent, one K. R. Narayana Aiyar, who is since deceased. He was a mortgagee having obtained a mortgage in October 1894 from one Narayani Ammal for Rs. 1,000. She was a dancing girl. She died in August 1900 and she made the mortgagee the executor of her will. In that will she referred to the debt due to him, and, in applying for probate, he stated the amount of the mortgage encumbrance due by the deceased lady at Rs. 1,620. In November 1912 a suit was brought by one T. S. Kothandarama Chetti against, among others, the mortgagee. He claimed to be entitled to the mortgagee's interest in that mortgage having as he alleged purchased that interest at Court auction and he sued the mortgagee in his capacity of executor for the mortgagor, he being as such in possession of the mortgaged property, and in February 1913, he (the mortgagee) put in a written statement defending that suit. The Official Assignee, who is representing the estate of the mortgagee, has now found it beneficial to the estate to claim on that mortgage and he is met by a plea of limitation. According to the law of this country it is necessary for him in bringing this suit to show that his claim is not barred by limitation, and in order to do so he relies on two acknowledgments of liability by Narayana Aiyar on behalf of the mortgagor, The first acknowledgment relied upon is contained in the affidavit by the mortgagee made by him in his capacity as executor under the will in claiming probate. He sets out in that affidavit a mortgage debt of Rs. 1,620. I am quite satisfied that the mortgage debt referred to there was the mortgage debt to himself as mortgagee. I have no doubt that that is a matter which can be proved by reason of the wording of explanation (1) to Section 19 of the Limitation Act. I am quite satisfied that strict proof of the fact was dispensed with in the Court below because the defendants would have been totally unable to suggest that there was any other encumbrance which he could have been referring to. In my judgment that admission is an admission which keeps the debt alive down to that date.

(3.) The second alleged admission is contained in the written statement of February 1913, and the learned trial Judge has held that that is not an admission sufficient for the purposes of Section 19 of the Act. I do not agree with him. An admission to prevent the running of time under the Limitation Act need not be in the full sense of the word an admission of the existence of liability at the date of the admission, if the proper inference to be drawn from the admission which is made is that it was intended to represent the debt as then subsisting. The law on the point is stated by the Privy Council in Maniram Seth V/s. Seth Rupchand (1906) ILR 33 C 1047 particularly at page 1059 : 16 MLJ 300, where there was a statement of what was held to amount to an admission of a debt at a time antecedent to the date of the statement, that is to say, the statement relied upon referred to the debt as having existed at a previous date. It was held under the circumstances of the case that, as the statement did not, as it would naturally if it had been a fact, do, go on to say that the position has altered since, it must be taken that the natural presumption was that the debt still continued down to the date of the statement, and that was held under those circumstances to be enough. That case has been discussed in subsequent cases by Miller, J. in Ranganayakalu Aiya V/s. Subbayyan (1909) 5 MLT 71, by the Division Bench of this Court, (Napier and Odgers, JJ.) in Subbarama Iyer v. Veerabadra Pillai (1921) ILR 45 M 443 : 42 MLJ 268 and finally in the recent case in Kandaswami Reddi V/s. Suppammal by Ayling and Venkatasubba Rao, JJ. I think that the statement of the law as made by Ayling, J., and concurred in by Venkatasubba Rao, J., in the latter case is certainly correct. My only doubt is whether it goes far enough, but in that case, he in effect states his interpretation of the Privy Council judgment to be that you have got to look at all the facts at the time of the statement which is claimed to be an admission and then say whether the proper inference to draw is that it was the intention to make an admission of the then existence of the debt. Now in this case the plaint in answer to which the written statement relied upon was put in alleged definitely the execution of the mortgage in October 1894 and it further alleged that there was due in respect of the mortgage at that date a sum which was equal to the principal amount and a very large arrear of interest. In the written statement the mortgagee, who was contesting the action in his capacity as executor of the mortgagor and in that capacity only, in terms admits the mortgage. He then deals with the plaint paragraph by paragraph, but, when he comes to paragraph 19 in the plaint which was in these terms: " There will be now due for principal and interest in respect of the said mortgage a sum of Rs. 2,629-4-0," he passes it over in silence. He does not suggest in any part of his written statement that the amount was no longer due, that the mortgage had been discharged in any way or the debt repaid. Under the rules applicable to pleadings in this Court, viz., Rule 5, O. VIII of the Civil Procedure Code of 1908, every allegation of fact in a plaint not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant shall be taken to be admitted. The effect of that is that that written statement in law amounted to an express admission first of the existence of the mortgage debt at the date of that written statement and then that the amount due was Rs. 2,629-4-0. It is argued that the admission must be express and it is not sufficient for this purpose that it should be an admission which the law implies under the rules by reason of the absence of any denial in the written statement. Speaking for myself 1 do not agree. I think that for the purpose of preventing the running of the statute of limitation it would be quite enough, if there was such a passing over of a certain allegation in silence in a written statement signed by the party making the admission which in law amounted to an admission; because he must be taken to know the law and therefore he would be making an admission at that time; for the purpose of limitation an admission made to some other person is sufficient. But, if I am wrong about that, I am quite clear that applying the test stated by Ayling, J., in the case referred to above, that one of the circumstances to look at is to see what was being pleaded and what was being denied in the defence, and it can hardly to my mind be open to doubt that the intention of the person who signed the written statement in February 1913 was to admit the continuance of the mortgage debt at the date of that document. That being so the case is taken out of the Statute of Limitation. In my judgment, the judgment appealed against is wrong, and the plaintiff is entitled to succeed.