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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: E.S. Venkataramiah, V. Krishnamurthy, Advocates.
Judges
  • S.R Das Gupta, C.J
  • Hegde, J.
Acts
  • SECTION 20 LIMITATION ACT
  • section 10 of the Mysore Court-fees Act
  • Sub-s. 20(1) of the Limitation Act
  • S. 21, Cl. (2) of the Limitation Act.
  • S. 20(2) of the Limitation Act.(3)
  • S. 20(1) of the Limitation Act.
  • principal.40. Sub-section (2)
  • S. 21 of the Limitation Act
  • sub-section to S. 20(1)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • For the Appellant: E.S. Venkataramiah, V. Krishnamurthy, Advocates.
Judges
  • S.R Das Gupta, C.J
  • Hegde, J.
Acts
  • SECTION 20 LIMITATION ACT
  • section 10 of the Mysore Court-fees Act
  • Sub-s. 20(1) of the Limitation Act
  • S. 21, Cl. (2) of the Limitation Act.
  • S. 20(2) of the Limitation Act.(3)
  • S. 20(1) of the Limitation Act.
  • principal.40. Sub-section (2)
  • S. 21 of the Limitation Act
  • sub-section to S. 20(1)
See more information ...
Smart Summary

Judgment Summary — Hegde, J. (Second Appeal on Limitation)

Factual and Procedural Background

This is a second appeal by the defendants against the decision of the District Judge of Mysore in R.A. No. 120 of 1952-1953. The underlying suit (O.S. No. 27/50-51) sought recovery of Rs. 3,000 (principal) and Rs. 3,000 (interest) claimed under a registered hypothecation bond dated 4-3-1927.

At trial the Sub-Judge dismissed the suit as barred by limitation. The plaintiff's legal representatives (the original plaintiff had died) appealed to the District Judge, Mysore, who allowed the appeal and decreed the sum claimed. The defendants appealed under S. 100 of the Mysore CPC to the High Court; because the District Judge reversed the trial court, questions of fact are also open on second appeal. The court identified limitation as the only question for consideration in this second appeal.

The factual dispute central to limitation was whether the original plaintiff (mortgagee) was in possession of a portion of the mortgaged property (Survey No. 190, item No. 3 of the mortgaged property) from 1936-1937 to 1941-1942 and whether he received the rent/produce of that property during that period.

Legal Issues Presented

  1. Whether the plaintiff (mortgagee) was in possession of Survey No. 190 (item No. 3) during the years 1936-1937 to 1941-1942.
  2. If possession is established, whether receipt of rent or produce by the mortgagee during that period saves the suit from the bar of limitation under S. 20(2) of the Limitation Act.
  3. Whether the proviso to S. 20 (requiring that payment/part-payment appear in the handwriting of or in a writing signed by the person making the payment) applies to S. 20(2) (i.e., whether acknowledgment is required where the mortgagee receives rent/produce).
  4. Whether an endorsement dated 26-2-1943 (and, as also referred to in the record, an endorsement dated 26-2-1913) by one co-mortgagor constitutes an acknowledgment under S. 20(1) sufficient to save limitation as against other co-mortgagors, in view of S. 21(2) of the Limitation Act.
  5. Whether the mortgagee must account for income received while in possession and whether pro rata deduction is required because Item No. 4 of the mortgaged property was sold to the plaintiff (merger) on 29-1-1932 under Exhibit VII.

Arguments of the Parties

Appellants' (Defendants') Arguments

  • The finding of possession by the District Judge (that the mortgagee-plaintiff was in possession of Survey No. 190 during 1936-1937 to 1941-1942) is unsustainable on the evidence.
  • Even if possession is proved, there is no proof of receipt of income; therefore limitation is not saved under S. 20(2) of the Limitation Act.
  • Where any receipt/payment is claimed to extend limitation, the proviso to S. 20 requires the payment/part-payment to appear in handwriting or in a writing signed by the person making the payment; appellants contended that this proviso governs both S. 20(1) and S. 20(2), so acknowledgment is necessary even in the case of receipt of produce/rent by a mortgagee in possession.
  • The plaintiff, being wealthy and lending money, would have kept account books; non-production of such accounts raises an inference that no rent/produce was received.
  • The fourth defendant had sold Item No. 4 of the mortgaged property to the plaintiff (Ex. VII), effecting a merger that should lead to pro rata deduction from the debt for that property portion.

Respondents' (Plaintiff / Legal Representatives') Arguments

  • The District Judge correctly found that the plaintiff was in possession and received the income/produce; receipts of produce by a mortgagee in possession are "deemed to be payment" for the purposes of S. 20(1) by virtue of S. 20(2).
  • The endorsement dated 26-2-1943 (made by one co-mortgagor) should be treated as an acknowledgment under S. 20(1), thereby saving limitation.
  • When one co-mortgagor makes a payment and acknowledges it, the limitation is saved under S. 20(1) (respondents argued that such acknowledgement by one co-mortgagor binds others).
  • The mortgagee's possession was to enable him to pay himself interest; any income applied to interest should be reckoned against the debt, but the mortgagee must still account for income realised while in possession.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sant Lal v. Kamla Prasad, AIR 1951 SC 477 Distinguishes payment (which extends limitation) from acknowledgment (which is merely proof of payment). Used to explain that payment is what extends limitation; acknowledgment is only evidence of payment and the proviso prescribes statutory proof for certain payments.
Mathura Singh v. Palakdhari Rai, AIR 1940 Pat 512 Held that the proviso to S. 20 does not govern both S. 20(1) and S. 20(2); no acknowledgment is necessary where mortgagee in possession receives produce. Cited and followed to reject appellants' contention that the proviso applies to S. 20(2).
Kumari Ittaman v. Bhaskara Menon, AIR 1953 Trav-Co. 63 Expresses the view that no acknowledgment is necessary when mortgagee in possession receives produce/rent. Cited as additional High Court authority supporting that S. 20(2) does not require the proviso-type acknowledgement.
Muthu Chettiar v. Muhammad Hussain, AIR 1920 Mad 418 Holds that "joint contractors" includes co-mortgagors and that S. 21(2) prevents one co-contractor's written acknowledgment from binding others; "chargeable" includes liability as to property. Relied upon as principal authority for the proposition that acknowledgment by one co-mortgagor cannot bind other co-mortgagors; the court accepted this view.
Thayammal v. Muthu Kumaraswami Chettiar, AIR 1929 Mad 881 Supports Madras view that co-mortgagors are within "joint contractors" and the words "chargeable" include property liability. Cited among decisions confirming that S. 21(2) bars extension of limitation as against other co-mortgagors by one co-mortgagor's acknowledgement.
Dashrath Motiram v. Gajanan Keshav, ILR (1943) Bom 486; AIR 1943 Bom 381 Bombay High Court decision aligning with the view that S. 21(2) covers co-mortgagors and protects them from being bound by acknowledgment/payment of co-contractors alone. Used to show that multiple High Courts have adopted the view that S. 21(2) prevents one co-mortgagor's acknowledgment from binding others.
U so Maung v. J. Thom, AIR 1939 Rang 287 High Court of Rangoon accepted the Madras view on S. 21(2) applicability to co-mortgagors. Cited to demonstrate consistency across jurisdictions supporting the Madras approach.
Sripati Samanta v. Lalji Sahu, AIR 1936 Pat 361 Decision of Justice James suggesting limitations on the effect of one co-contracting party's payment on others (discussed by the court). Considered but treated as not correct in principle for the purposes of the present appeal; the court did not follow it as binding authority.
Baijnath Prasad v. Satilal Sahu, AIR 1938 Pat 383 Contains observations (including Wort J.'s) relating to whether mortgage may be kept alive by payment by one mortgagor; some observations are obiter. The court noted Wort J.'s obiter remark but held the broader weight of authority favoured the opposite view; did not accept these observations as overturning the consensus.
Nagayya Naidu v. Duraiswami Naidu, AIR 1938 Mad 111 Madras decision following AIR 1920 Mad 418 and endorsing that S. 21(2) covers co-mortgagors and protects them from unilateral acknowledgments. Relied upon as part of a chain of Madras authorities supporting the proposition that an acknowledgment by one co-mortgagor cannot bind the others.
Azizur Rahaman v. Upendra Nath, AIR 1938 Cal 129 Calcutta High Court decision indicating concurrence with the Madras view on S. 21(2)'s ambit. Used to show near unanimity among High Courts on the point that S. 21(2) protects co-mortgagors from unilateral acknowledgements or payments of others.

Court's Reasoning and Analysis

The court proceeded through the issues in sequence, basing its reasoning strictly on facts proved and on statutory interpretation supported by legislative history and authorities cited in the record.

1. Possession (1936-1937 to 1941-1942)

  • The plaintiff produced oral evidence from multiple witnesses (P.W.s 1, 2, 5, 6, 7 and 8) who deposed that the plaintiff was in possession of item No. 3 (Survey No. 190) during the stated period and enjoyed its income. P.W. 8 was a supplemental plaintiff (interested witness), but P.W.s 6 and 7 were disinterested neighbours who testified to the terms of the agreement and presence at its making.
  • Circumstantial evidence supported the oral testimony: documents Ex. C-1 to C-4 showed the plaintiff paid assessment for the years 1937 to 1941; defendants offered no satisfactory explanation for these payments and did not claim to have paid the assessments themselves. The 1st defendant (the village Patel), who might have best known the facts, was not examined.
  • The trial judge's terse rejection of these witnesses was criticized by the High Court: there was no adequate reason recorded for rejecting testimony, and the District Judge's detailed acceptance of the plaintiff's evidence was preferred. The court concluded the plaintiff did prove possession for the period in question.

2. Receipt of Income / Produce — sufficiency of proof

  • The defendants argued that production of account books would be necessary to prove receipt of rent/produce and that non-production justified an adverse inference that no income was received.
  • The court treated the argument as overly technical: once possession and cultivation/raising of crops by the plaintiff are established, it is a natural inference that the plaintiff gathered the produce and thus received the income. The court held that the receipt of income was satisfactorily established by the combination of oral and circumstantial evidence.
  • Hence the factual prerequisites of S. 20(2) — possession by the mortgagee of whole or part of the mortgaged property and receipt of rent/produce — were held to be met.

3. Statutory interpretation of S. 20 and the proviso

  • The court reviewed the legislative history of S. 20 (pre-1929 wording and changes made by the 1929 amendment) and emphasized that the 1929 amendment introduced a uniform statutory mode of proof (payment/part payment must “appear in the handwriting of or in a writing signed by the person making the payment”) for payments of interest or part payments of principal. Prior to amendment, payment of interest did not require such acknowledgment.
  • The critical textual point considered was that S. 20(2) states that receipt of produce by the mortgagee "shall be deemed to be a payment for the purpose of sub-s. (1)". The appellants urged that the proviso to S. 20(1) therefore applies to S. 20(2) as well, and an acknowledgment in writing would be required.
  • The court rejected this argument on both textual and purposive grounds: the wording of the section, its scheme, and legislative history indicate the proviso was deliberately placed after sub-s. (1) and not after sub-s. (2); sub-s. (2) was converted into a separate sub-section and is independent of sub-s. (1). The words "deemed to be a payment for the purpose of sub-s. (1)" were read as relating only to the concept of "payment" and not to the additional statutory requirement of written acknowledgment prescribed by the proviso.
  • From commonsense considerations the court found it unreasonable to require the mortgagor to acknowledge each receipt of income by a mortgagee in possession: the mortgagee in possession is effectively paying himself and no separate payer exists whose written acknowledgement would be plausible or practical.
  • The court also relied on precedents (Patna and Travancore-Cochin High Courts) that had considered the question and held that the proviso does not govern S. 20(2). The court expressly rejected the appellants' construction and held that no acknowledgment is necessary where the mortgagee in possession receives produce or rent.

4. Endorsement / Acknowledgment by one co-mortgagor (26-2-1943)

  • The respondents contended that an endorsement dated 26-2-1943 by one co-mortgagor should be treated as an acknowledgment under S. 20(1) and so save limitation as to the debt.
  • The court analysed S. 21(2) of the Limitation Act, which provides that one of several joint contractors, partners, executors or mortgagees shall not be rendered chargeable by reason only of a written acknowledgment signed or payment made by any other of them. The court examined whether "joint contractors" includes "joint mortgagors".
  • Relying on a body of authority (Madras, Bombay, Rangoon, Calcutta High Courts and others, including AIR 1920 Mad 418 and subsequent decisions), the court held that co-mortgagors are within "joint contractors" and that "chargeable" refers not only to personal liability but also to liability affecting property. Consequently, the statutory bar of S. 21(2) prevents an acknowledgment by one co-mortgagor from binding the others or keeping alive limitation as against the property of other co-mortgagors.
  • The court considered contrary observations (e.g., decisions of Patna High Court justices) but regarded those as either obiter or not correct in principle, and held that the weight of authority supported the proposition that an acknowledgment by one co-mortgagor does not extend limitation as against other co-mortgagors.

5. Accounting and merger / effect of sale of Item No. 4

  • The court accepted that the mortgagee was put in possession primarily to enable him to pay himself interest and that he must account to the mortgagors for income received during his possession.
  • The defendants' plea that Item No. 4 was sold to the plaintiff on 29-1-1932 (Ex. VII) and that pro rata deduction ought to be given was not disputed in principle by the High Court. The District Judge had accepted the plea but had ordered the subordinate judge to ascertain values after decree. The High Court held it was preferable to give the necessary deductions prior to passing the decree and remanded the matter for a fresh decree with accounting and necessary adjustments.
  • The parties were given leave to adduce additional evidence on accounting and on deductions relating to the sale/merger of Item No. 4, to be recorded either by the District Judge himself or through the Trial Court.

Holding and Implications

Holding: The High Court set aside the decrees of the lower courts and remanded the case to the District Judge, Mysore for a fresh decree in the light of the findings summarized above. The court held that (i) the plaintiff proved possession of item No. 3 (Survey No. 190) from 1936-1937 to 1941-1942; (ii) receipt of rent/produce by a mortgagee in possession is sufficient to save limitation under S. 20(2) without any written acknowledgment; and (iii) an endorsement or written acknowledgment by one co-mortgagor does not, in view of S. 21(2), bind other co-mortgagors or extend the limitation as against their property.

Implications:

  • Direct effect on the parties: the plaintiff's possession and receipt of produce during 1936-1937 to 1941-1942 preserves the claim from limitation under S. 20(2); however the mortgagee must account for income realised while in possession and appropriate deductions (including any deduction due to Item No. 4 having been sold to the plaintiff) must be made when passing the final decree.
  • The court remanded the matter for a fresh decree and permitted the parties to lead additional evidence limited to accounting and deductions. The appellants were ordered to pay the costs of the appeal to the respondents (one set) and were granted a certificate under section 10 of the Mysore Court-fees Act for refund of Court fees paid on the appeal memorandum.
  • On broader legal principle: the court reaffirmed the interpretation that S. 20(2) does not require the written acknowledgment prescribed by the proviso to S. 20(1); and that S. 21(2) prevents one co-mortgagor's written acknowledgment or payment from binding other co-mortgagors. The decision rests on statutory construction and precedents of several High Courts. The court did not purport to create a novel precedent beyond these interpretive conclusions.

Order: Das Gupta, C.J. concurred. Appeal remitted for further proceedings consistent with this judgment. Costs were awarded against the appellants.

Show full summary ...

    Patel Kempegowda And Others, v. Channaveeriah And Others,

    Hegde, J.:— This is a second appeal filed by the defendant against the decision of the District Judge of Mysore in R.A No. 120 of 1952-1953. The suit is for recovery of Rs. 3000/- principal and Rs. 3000/- interest; claimed as due on, a registered hypothecation bond dated 4-3-1927. The learned Sub-Judge tried the case as O.S No. 27/50-51 and dismissed the suit as being barred by limitation. On other material issues the Courts below have concurrently found against the defendants.

    2. As against this decision the legal representatives of the plaintiff, (Original plaintiff having died by that time) took up the matter in appeal to the Court of the District Judge, Mysore. The learned District Judge allowed the appeal and decreed the sum claimed in the suit. The defendants have come up in Second Appeal. As the appeal is governed by S. 100 of the Mysore C.P.C, the appellants are entitled to canvass the correctness of the decision on questions of facts as well, as the judgment appealed against is a reversing one. The only question for consideration in this Second Appeal is one of limitation.

    3. The material contentions raised by the learned advocate appearing for the defendants are:

    (1) that the finding of the First Appellate Court that the mortgagee-plaintiff was in possession of Survey No. 190 during the years 1936-1937 to 1841-1842 is unsustainable on the evidence on record.

    (2) that even if the said possession is proved there is no proof of any receipt of income and consequently limitation is not saved by S. 20(2) of the Limitation Act.

    (3) that even if there has been any receipt of income or rent there being no acknowledgment of the payment appearing in the handwriting or in a writing signed by the person making the payment, limitation is not saved. In other words his contention is that the proviso in S. 20 governs not merely S. 20, Sub-s. (1), but also sub-s. (2) of the said Section.

    4. On the other hand the learned Counsel appearing for the respondents questions the correctness of the conclusions of the Courts below in arriving at the finding that the endorsement dated 26-2-1943 does not save the bar of limitation. His contention is that when any one of the co-mortgagors make the payment and acknowledges the same, then the limitation is saved by S. 20(1) of the Limitation Act. It is necessary to examine these contentions in detail.

    5. The most important question to be decided in this appeal is whether the original plaintiff was in possession of any portion of the mortgaged property between the years 1936-1937 to 1941-1942 as contended by the plaintiff. The plaintiff's case is that the defendants were not in a position to pay the interest.

    6. Hence they put him in possession of Survey No. 190 — item No. 3 of the mortgaged property for the purpose of paying himself the interest due under the mortgage. His further case is that he was in possession of the said property for a period of six years and enjoyed the income of the said property. The defendants deny this. Unless the plaintiff establishes that he was in possession of the property during this period his suit according to the findings of the Courts below would be barred by limitation.

    7. To establish his possession for six years, the plaintiff has examined a large number of witnesses. P.Ws 1, 2, 5, 6, 7 and 8 speak to the face that the plaintiff was in possession of item No. 3 of the mortgaged property during these years and was enjoying the income thereof. P.W 8 is one of the supplemental plaintiffs.

    8. As such his evidence could be considered as interested; but apart from the evidence of P.W 8 there is the evidence of the other witnesses who speak to the fact of possession of Survey No. 190 by the plaintiff during the years 1936-1937 to 1941-1942 and amongst them P.Ws 6 and 7 speak also to the terms of the agreement under which the property was put in possession of the mortgagee.

    9. They claimed to have been present at the time of the agreement. These witnesses are disinterested witnesses. They are neighbours and persons likely to know both the fact of possession as well as the terms of the agreement spoken to by them. Nothing is brought out against them and there is no reason to disbelieve their evidence.

    10. Apart from the oral evidence in this case there is considerable circumstantial evidence which supports the case of the plaintiff. It is proved that for the years 1837 to 1941 the plaintiff paid the assessment in respect of this property. This is proved by Ex. C-1 to C-4. There is no satisfactory explanation on behalf of the defendants as to how the plaintiff happened to pay the assessment in question.

    11. It is not the case of the defendants that they have paid the assessment during these years. This is a material circumstance in favour of the plaintiff. It is also important to note that the 1st defendant was the Patel of the village in which the suit property is situated and he would have been the best person to speak to the fact as to how the mortgagee happened to pay the assessment of the said property during those years.

    12. He has not been examined in the case. The endorsement dated 26-2-1913 which is proved also remains unexplained. As against the evidence adduced by the plaintiff, there is only the interested testimony of D.W 2 and the evidence of D.W 3. D.W 2 is the second defendant and as such ranch value cannot be attached to his evidence, it is true that D.W 3 speaks to the fact that the second defendant has been cultivating the property in question during the relevant period.

    13. He is said to be a person not belonging to the village and there is no reason to prefer his evidence to that of the P.Ws above referred to. But the learned Counsel for the defendants has pressed before us the fact that the plaintiff is a rich man, lending monies and as such must be maintaining accounts.

    14. From, the fact that he has not produced his account books an adverse inference must be drawn against him. It is further contended that there is admission from some of the plaintiff's witnesses that he had some sort of an account. Even these have not been produced. P.W 8 swears that no accounts were kept. It is true that his evidence does not carry conviction.

    15. This is certainly a circumstance in favour of the defendant. But I do not think this circumstance by itself is sufficient to outweigh the evidence adduced on behalf of the plaintiffs. It is quite unlikely that the plaintiff who is a man of means would have allowed his claim to be barred by sleeping over his rights unless he had the possession of the property as claimed by him.

    16. The learned District Judge has elaborately discussed the evidence on this question and has come to the conclusion that the plaintiff has proved that he was in possession of Survey No. 190 (item No. 3 of the plaint property) from 1936-1937 to 1941-1942, and I entirely agree with his conclusion. Normally I should have given some weight to the opinion of the trial judge in accepting or rejecting the oral testimony adduced in a case like this. But unfortunately there is nothing in the judgment of the learned Sub-Judge to indicate as to why the evidence of P.Ws 1, 2 and 5 to 8 should be rejected. All that he says is that they do not lose anything by coming and deposing. This is an irrelevant consideration. Hence I come to the conclusion that the plaintiff was in possession of item No. 3 of the mortgaged property for the period 1936-1937 to 1941-1942.

    17. This takes me to the next question as to whether there is proof that the plaintiff was in receipt of the income from the mortgaged property during this period. The contention of Mr. Venkataramiah appearing for the appellants is that it is not sufficient to prove that the mortgagee was in possession of the mortgaged property.

    18. It must also be proved that his possession was qua-mortgagee and in pursuance of the terms of the mortgaged document. His further contention is that it must be proved that he was in receipt of the rent or produce of such land. Taking the first question as to whether there is proof of the receipt of the rent or produce of the land, it is contended by the learned advocate for the appellants that the account books if produced would have proved the receipt of the rent or produce.

    19. The non-production of the account books raises a presumption or at least an inference that no rent or produce has been received during the period in question. He has also taken us through the evidence of the witnesses and he says, the evidence even if accepted in its entirety merely establishes that (a) plaintiff was in possession of the land (b) was enjoying the same and (c) has raised crops thereon.

    20. It is his contention that this evidence is not sufficient, but there must be positive evidence that he was in receipt of the rent or produce. This contention is highly technical. When once it is established that the plaintiff was in possession of the land and he has raised the crops thereon during the years in question, the inference naturally flows that he gathered the produce of the crops raised by him.

    21. It is a normal and natural human conduct. The receipt of the income by the plaintiff is satisfactorily established.

    22. All that S. 20(2) requires is that the mortgagee should be in possession of the whole or a portion of the mortgaged property and he should be in receipt of the rent or produce. It is wholly unnecessary that he should be in possession in pursuance of the terms of the mortgage bond. If the contention of the appellants are accepted, S. 20(2) would not apply to any mortgage other than usufructuary mortgage or anomalous mortgage.

    23. The wording of the Section does not support this contention. It has been uniformly held by all the Courts that even a simple mortgagee who has been put in possession of the mortgaged property and who has received the rent or produce therefrom is entitled to the benefit of S. 20(2).

    24. The appellants' contention that the agreement being oral is not admissible in evidence does not merit serious consideration. By the subsequent agreement the parties merely created a machinery to discharge the interest. This is not hit by S. 92 of the Evidence Act.

    25. The next contention raised by Mr. E.S Venkataramiah on behalf of the appellants is that, the proviso in S. 20 governs both Ss. 20(1) and S. 20(2). S. 20(2) is as follows:

    “When mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment for the purpose of Sub-s. (1)”.

    26. He emphasises the words “deemed to be payment for the purpose of sub-s. (1)” and he wants us to dovetail the sub-section to S. 20(1) and read it as a part and parcel of S. 20(1). Once having read so, he would say that the proviso governs the whole of the section. His further contention is that sub-section (2) by itself does not provide for the extension of the period of limitation. If we read it independently i.e independent of S. 20(1) it makes no meaning.

    27. He wants us to construe this sub-section as an explanation to S. 20(1) i.e as an explanation of the word “payment” appearing in S. 20(1). It follows from that the proviso governs both the sections. The argument looks attractive at first sight. There is no authority in support of the proposition contended for on behalf of the appellant. Such authorities as are available are against the appellants' contention.

    28. Section 20 of the Limitation Act has undergone considerable change. Prior to the amendment in 1929 the Section was as follows:

    “When 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, or when a part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor or by his agent duly authorised in this behalf, a new period of limitation, according to the nature of the original liability, shall be computed from the time when the payment was made;

    Provided that, in the case of part payment of “the principal of a debt, the fact of the payment appears in the handwriting of the person making the same.”

    “Where mortgaged land is in the possession of the mortgagee, the receipt of the produce of such land shall be deemed to be a payment for the purpose of this section.”

    29. The amending Act of 1929 made material changes in this section. Until then only the part payment of the principal of a debt need appear in the handwriting of the person making the payment. It was not necessary in the case of payment of interest as such. The amending Act put both classes of payment in the same category.

    30. Another important change that was made was that in the place of the words “the payment appears in the handwriting of the person making the same” — which has given rise to considerable conflict of opinion — the amended Act used the expression “appears in the handwriting of or in a writing signed by the person making the payment.”

    31. The last paragraph of the old section was numbered as sub-section (2) and instead of the words “for the purpose of this section”, the words used are “for the purpose of sub-section (1)”. This section was further amended by Act XVI of 1942 which is unnecessary for our purpose.

    32. Under the Section as it stood prior to the amendments in 1929 three factors extended the period of limitation: (1) payment of interest as such (2) part payment of the principal when duly acknowledged and (3) when mortgaged land is in the possession of the mortgagee, and he received the produce of the said land.

    33. Neither in the case of the payment of interest as such nor in the case of the receipt of the produce of the mortgaged land acknowledgment was necessary.

    34. The question whether a particular payment is towards interest or towards principal gave rise to considerable controversy and gave room for adducing false evidence. To shut out this controversy and to remove the artificial distinction between the payment of interest as such and part payment of principal the legislature enacted the present proviso which laid down that both in the case of payment of interest or the part payment of the principal the only mode of proof shall be that the payment should appear in the handwriting of or in the writing signed by the person making the payment.

    35. Payment is one thing, acknowledgment is another. What extends limitation is payment, acknowledgment is a mere proof of the payment. See Sant Lal v. Kamla Prasad, AIR 1951 SC 477 (A). Both in the case of payment of interest or part payment of principal a statutory proof is stipulated by the proviso. In the case of receipt of the produce by the mortgagee the very possession of the property is a good proof.

    36. It was a different category of payment. That part of the section had not given rise to much difficulty in the matter of proof. Hence legislative interference was not called for. But the question is did the legislature in fact interfere and call for the statutory proof as in the case of other payment contemplated in S. 20 (J).

    37. It will be seen that under S. 20 as it stood prior to the amendment in 1929 where the mortgaged land is in possession of the mortgagee, the receipt of the produce of such land “shall be deemed to be a payment for the purpose of this section”. (Underlining here into “ ” is mine). The section, as it stood provided for two types of payments, payment of interest as such and part payment of the principal.

    38. The payment of interest as such did not require any acknowledgment. Hence it cannot be argued that when the last paragraph of the section said “shall be deemed to be a payment for the purpose of this section” it also attracted the further concept of “acknowledgment.” It merely referred to payment. The cases decided under this section prior to the amendment unanimously held that the receipt of the produce by the mortgagee in possession of the mortgaged land did not require any acknowledgment.

    39. There is no reason to think that the law was changed in this respect after the amendment by the amending Act of 1929; On the other hand by converting the last paragraph of S. 20 into a separate sub-section it is made quite independent of S. 20(1). On an examination of the scheme of the section, it would be seen that the proviso requiring acknowledgment has been placed immediately after sub-s. (1) which contemplated payment of interest or part payment of principal.

    40. Sub-section (2) comes after the proviso. If the legislature wanted the proviso to govern both the sub-sections there would not have been any difficulty to have the proviso after sub-s. (2). It will not be correct to presume that the legislature was either negligent or the proviso has been placed in between Ss. 20(1) and 20(2) by oversight. Both the history of the section and the scheme thereof is against such a contention.

    41. Even from a commonsense point of view there is no justification for requiring any acknowledgment when mortgagee receives rent or produce. In the case of receipt of rent or produce there is no person making the payment. The mortgagee is in possession of the property and is enjoying the income. He is paying himself, if there is any payment at all. It would be unreasonable to expect that whenever the mortgagee realises income out of the mortgaged property, the mortgagor should come and acknowledge the payment, it is difficult to imagine that the legislature would have intended such course of conduct.

    42. On a fair reading of the section, it would be clear that the words “shall be deemed to be a payment for the purpose of sub-s. (1)” merely relate to payment and not acknowledgment. As stated herein above, it would be seen that sub-s. 20(1) merely speaks of payment. It is the proviso that requires that such payment as is specifically referred to in sub-s. (1) to be acknowledged and not all types of payment.

    43. The question whether the proviso governs merely S. 20 (10 or both S. 20(1) and S. 20(2) had come up for consideration before their Lordships of the Patna High Court in the case reported in Mathura Singh v. Palakdhari Rai, AIR 1940 Pat 512 (B). Their Lordships rejected the contention that the proviso governs both Ss. 20(1) and 20(2). Their Lordships proceeded on the footing that this is a well accepted proposition.

    44. They rightly remarked that it did not seem to them that the intention of the legislature in enacting this proviso was to abrogate the long established and traditional practice by which the mortgagee in possession of a land is deemed to be in receipt of interest and to have a fresh start of limitation from the period when his possession ceases. This question again came up for consideration before their Lordships of the Travancore-Cochin High Court in the case reported in Kumari Ittaman… v. Bhaskara Menon…., AIR 1953 Trav-Co. 63 (C).

    45. The relevant discussion is found in paragraph 5 at page 66. They are also of opinion that no acknowledgment is necessary. I am clearly of opinion that no acknowledgment, is necessary in the case of receipt of the produce or rent of the mortgaged land by the mortgagee in possession of the property. This contention of the appellant is rejected.

    46. The above findings are sufficient to dispose of the appeal before us. But Mr. Krishnamurthy appearing on behalf of the respondents pressed before us the contention that the endorsement made by one of the co-mortgagors on 26-2-1943 must be deemed to be an acknowledgment under Sub-s. 20(1) of the Limitation Act and the same is sufficient to save limitation. The point raised being some what important I shall examine the contention.

    47. His contention is that on a proper reading of S. 20(1) it would be clear that the acknowledgment in question could be made by any of the co-mortgagors as any one of them is a “person liable to pay the debt or legacy”. According to him it is not necessary that all the persons liable to pay the debt or legacy should be parties to the acknowledgment. If the mortgagors could take the benefit of the payment made by anyone of the co-mortgagors they should equally be bound by such payment coupled with the acknowledgment.

    48. According to him their rights are co-extensive with their liability. But the main difficulty in the way of Mr. Krishnamurthy is S. 21, Cl. (2) of the Limitation Act. The said section reads as follows:

    “Nothing in the said sections renders one of several joint contractors, partners executors or mortgagees chargeable by reason only of a written acknowledgment signed or of a payment made by, or by the agent of any other or others of them.”

    49. This section specifically lays down that the acknowledgment made by anyone only of the joint contractors cannot bind the other joint contractors. But Mr. Krishnamurthy's contention is that the word “joint contractors” does not include “joint mortgagors”. He says that while the section mentions “mortgagees” there is no reference specifically to “mortgagors”. He further contends that if the word “joint contractors” is intended to include “mortgagors” there was no necessity for specifically mentioning “mortgagees” as the “mortgagees” are also “joint contractors”. It is not necessary for me in this case to decide as to why the “mortgagees” were specifically included in this section.

    50. Legislature possibly intended that Ss. 19 and 20 read with S. 21 should govern not merely the contractual obligations of the mortgagees but also their other obligations Undoubtedly the mortgagors are “joint contractors” and there is no valid reason to exclude them from the category of “joint contractors”. It has been held in a number of decisions that the mortgagors are “joint contractors” within the meaning of S. 21 clause (2). See Muthu Chettiar v. Muhammad Hussain, AIR 1920 Mad 418 (D), Thayammal v. Muthu Kumaraswami Chettiar, AIR 1929 Mad 881 (E), Dashrath Motiram v. Gajanan Keshav, ILR (1943) Bom 486 : (AIR 1943 Bom 381) (F), U so Maung v. J. Thom, AIR 1939 Rang 287 (G). No case has been brought to our notice which has taken a contrary view.

    51. Next point that is urged before us is the import of the word “chargeable”. What Mr. Krishnamurthy wants us to conclude is that while the personal liability of the “joint mortgagors” cannot be kept alive by the acknowledgment made by one of the co-mortgagors, the liability on the property can be kept alive by such acknowledgment. He contends that the mortgagee is one and indivisible, and if for any reason once the mortgage is kept alive it is kept alive in its entirety. He further contends that the legislature has advisedly used the words “joint contractors” and “chargeable”. His case is that what the legislature tried to protect by S. 21, sub-s. (2) is the contractual liability of the joint contractors which according to him is only personal liability.

    52. This argument cannot be accepted as sound. The co-mortgagor enters into a contract not merely about his personal liability, but also about the liability of the property that he offers as security. As a result of that contract he is chargeable not merely in respect of his personal liability, but also in respect of the liability of his property. What reason is there to give a restricted meaning to the word “chargeable”? There is no justification to allow the period of limitation being extended by one of the co-mortgagors as against the property of the other co-mortgagors. This might open the door for fraud.

    53. Mr. Krishnamurthy seeks considerable support for his argument from the decision of Justice James in the case reported in Sripati Samanta v. Lalji Sahu, AIR 1936 Pat 361 (H) and also from the observations made by Wort J. in the case reported in Baijnath Prasad v. Satilal Sahu, AIR 1938 Pat 383 (I). The observations of Wort J. are obiter. The question for decision in that case was whether the personal liability of one of the co-mortgagors can be kept alive by the payment and acknowledgment made by the other co-mortgagor. Their Lordships came to the conclusion that it cannot be done. Incidentally his Lordship Justice Wort remarked:

    “It is true that the mortgage itself may be kept alive by payment by one of the mortgagors, but when the question which arises is a matter not of the liability on the mortgage, but the liability on the personal covenant, the matter which has to be determined is whether the payment by one joint contractor can be deemed to be the payment of the other joint contractors and that as S. 20 in my judgment quite clearly implies quite apart from S. 21, can only arise where the payment is made by the one as the agent of the other.”

    54. In this decision there is no discussion about the import of the words “joint contractors” and “chargeable” as appearing in S. 21(2). Neither the decision of James J. nor the observations in case reported in AIR 1938 Pat 383 (I) could be considered as correct. There is a long catena of decisions which have laid down that the bar of S. 21, clause (2) is applicable not merely to personal debts, but also to mortgaged debts. They specifically lay down that the word “joint contractors” includes “co-mortgagors” and the word “chargeable” refers to not merely the personal liability but also the liability on the property. It was so held in the cases reported in AIR 1920 Mad 418 (D).

    55. Spencer and Seshagiri Rao JJ. after an elaborate discussion of the relevant provisions opined that the distinction between simple debts and real debts mentioned in the English law of Limitation is abrogated by S. 21 and that there is no distinction made by the section between the co-mortgagors and co-mortgagees. They further held that the word “joint contractors” in the section include “joint mortgagors” also. They are of opinion that S. 21 of the Limitation Act is really an explanation to Ss. 19 and 20 of the Act. According to them the object of the explanation is to provide that only one of the contracting parties shall not ordinarily impose a liability on the other by anything done by him.

    56. Limitation, whether treated as a right or as Inability is prima facie personal and unless the legislature so provides, a co-operative right or lability should not be imposed. I am in full agreement with the views expressed in this case. This view was shared by Ramesham and Jackson JJ. in AIR 1929 Mad 881 (E), their Lordships opined that the word “chargeable” in S. 21 prima facie means all kinds of changeability under a contract and that it cannot be limited to personal liability only. In the case reported in Nagayya Naidu v. Duraiswami Naidu, AIR 1938 Mad 111 (J), Burn J. followed the decision reported in AIR 1920 Mad 418 (D). The Madras view is shared by the other High Courts.

    57. The High Court of Rangoon accepted the correctness of the Madras view in the case reported in AIR 1939 Rang 287 (G). The same is the opinion of the Bombay High Court as could be seen in the case reported in ILR (1943) Bom 486 : (AIR 1943 Bom 381) (F). The Calcutta view seems also to be the same as could be seen by the decision reported in Azizur Rahaman v. Upendra Nath, AIR 1938 Cal 129 (K). In fact there seems to be more or less a unanimity of opinion amongst the different High Courts on this point. Whatever the stray observations may be in some of the cases reported, the weight of authority is heavily against the view contended for by Mr. Krishnamurthy. The said contention has no basis either in principle or on authority.

    58. It is argued on behalf of the appellant that if we should hold that the mortgagee was in possession of the property from 1936-1937 to 1941-1942 then he must account for the income for that period and should give appropriate deductions from the amount due. The case of the mortgagee is that the mortgagee is in possession under a specific understanding that the entire income of the year was to go towards the interest due in that year. We have been taken through the evidence on this point.

    59. I do not think that the evidence is such as to accept the specific understanding contended for. All that the evidence establishes is that the property in question was to be in possession of the mortgagee primarily for the purpose of paying interest. Hence it is necessary that the mortgagee should account to the mortgagors for the income received by him during the period he was in possession of the mortgaged property. An account will have to be taken before a decree for specific amount could be passed.

    60. The next Point urged before us is that the fourth defendant has sold Item No. 4 of the mortgaged property to the plaintiff on 29-1-1932 under Ex. VII. To this extent there has been a merger of the rights of the mortgagee and mortgagor. Hence the defendants contend that out of the amount due under the mortgage pro rate deduction will have to be given in respect of the property sold. This plea of the defendants has been accepted by learned District Judge, but he has decreed the entire amount claimed and directed the Subordinate Judge of Mandya to enquire into the value of the properties before passing the final decree and give credit to that portion of the debt as Item No. 4 bears to the whole property mortgaged. This is not a correct procedure and it would be more desirable to give the necessary deduction even before a decree is passed. Hence I set aside the decrees of the lower Courts and remand the case to the District Judge, Mysore to pass a fresh decree in the light of the findings given herein above.

    61. If the parties desire to adduce additional-evidence on the question of accounting by the plaintiff-mortgagee in respect of his possession of the property from 1936-1937 to 1941-1942 (as directed in para 18 of the Judgment) and also in respect of the deduction that the defendants are entitled to, in view of the alienation of Item No. 4 of the mortgaged property to the plaintiff as per Ex. VII (as found in para 19 of the Judgment) they may be allowed to do so. The additional evidence may be recorded either by the District Judge himself or through the Trial Court. The appellants have substantially failed in this appeal. Hence the cost of this appeal shall be paid by them to the respondents, (one set). The appellant will be entitled to certificate under section 10 of the Mysore Court-fees Act for a refund of the Court fees paid by them on the appeal Memo.

    62. Das Gupta, C.J: I agree.

    D.R.R
    Order accordingly.

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