KONDURI SURYANARAYANA RAO Vs. VAGASANA VENKATARAJU

JUDGEMENT

(1.) The only point for determination in this appeal is a question of limitation, which arises under the following circumstances. The plaintiff sued on a mortgage bond (Ex. A) of 1905 and the principal contesting defendant, (the 11 defendant) had a mortgage, in his favour, of 1902 (Ex. I). To get over the prima facie priority of Ex. I, Plaintiff relied on the fact that his mortgage Ex. A was practically a renewal of Ex. B, which, being dated 24 May, 1892, was long anterior to Ex. I. The learned Subordinate Judge, in appeal, accepted the Plaintiff's claim to priority and gave him a decree as prayed for. On Second Appeal to this Court, Jackson, J., reversed this decision, holding that on the date of Ex. A, the claim under Ex. B had become barred by limitation and therefore the Plaintiff was not entitled to priority as against the 11th defendant. Hence this Letters Patent Appeal.

(2.) The way in which a renewal of an earlier mortgage operates as against intermediate transferees of the mortgaged property has been discussed in Velayudha Reddi V/s. Narasimha Reddi (1916) 32 M.L.J. 263 and Yagnanarayana V/s. Venkatakrishna Rao . According to these decisions, the new mortgage may operate to keep alive the rights under the old mortgage, as against intermediate transferees, on the analogy of part-payment; but the starting point for an action for the recovery of the debt will be fixed, not merely as against the mortgagor but also as against intermediate mortgagees, in accordance with the terms of the new contract. The importance of this principle in the present case arises out of this fact - that the renewal under Ex. A, was effected at a time, when according to the law as declared by a Full Bench of this Court see Narayana Aiyar V/s. Venkataramana Aiyar (1902) I.L.R. 25 Mad. 220 (F.B.) the claim under Ex. B, had not become barred by limitation and Ex. A allowed time for payment by instalments upto 1916. If the principle applied by the Privy Council in Abdul Aziz Khan v. Appayasami Naicker (1903) L.R. 31 I.A. 1 : I.L.R. 27 Mad. 131 (P.C.) could be invoked here, it might well be contended that, the rights not merely of the mortgagor and the mortgagee but of the puisne mortgagee as well, must be judged of by the law as understood at the date of Ex. A, notwithstanding a judicial declaration of law to a different effect, by later pronouncements of authority.

(3.) If however the 11 defendant is entitled to rely upon the later decision of the Privy Council in Vasudeva Mudaliar V/s. Srinivasa Pilla I (1907) L.R. 34 I.A. 186 : I.L.R. 30 Mad. 426 : 17 M.L.J. 444 (P.C.) and contend that, on the application of the 12 years rule of limitation, the remedy under Ex. B must be held to have become barred on the date of Ex. A, the Plaintiff may as well claim the benefit of Section 31 of the Limitation Act of 1908 which was introduced to remedy the hardship caused by this very decision of the Privy Council. This position was not disputed before us, on behalf of the Respondent.