The Judgment of the Court was delivered by

Sir Arnold White, C.J:— The question in this case is whether certain immoveable property which had been mortgaged was ‘purchased’ by the appellant within the meaning of article 134 of the Indian Limitation Act, 1877. Article 134 reproduces section 5 of Act XIV of 1859 in so far as that section applies to immoveable property, whilst article 133 reproduces it in so far as it applies to moveable property. The section is an expansion of section 25 of the English Act which is an exception engrafted upon section 24 of that Act.

The point arises in this way. In 1861 A mortgaged certain lands to 33 for Rs. 750. In 1881 by an instrument which recites that the lands in question were the jenmam properties of B, B mortgaged these lands to C for Rs. 5,000. A brings a redemption suit. O contends that A is bound to redeem O's mortgage before he can recover possession of the property. C does not set up an absolute title. He admits A's right to possession on payment of C's mortgage, but he says that, as A's suit to recover possession is brought more than twelve years after C's purchase, article 134 gives C the right to be redeemed, in other words, that C's mortgage, which, but for the law of limitation, would be invalid as against A, became good as against A after the lapse of twelve years from the date of C's ‘purchase.’

Purchase, as used in English Statutes with reference to real property, includes a mortgage, legal or equitable. See Willoughby v. Willoughby, Dolphin v. Aylward, Lister v. Turner. For the purposes of the Conveyancing and Law of Property Act, 1881, and the Conveyancing Act, 1882, the word ‘purchaser’ includes “a lessee or mortgagee or an intending purchaser, lessee or mortgagee or other person who for valuable consideration takes or deals with property.” Unless concluded by authority to the contrary, I should certainly be prepared to hold that the word ‘purchaser’ must be construed in the sense in which it is used in English Statutes relating to land as including mortgagee. For the purpose of the application of the law of limitation it is difficult to see any principle on which a distinction can be drawn between an out and out sale and a mortgage. The one seems to fall as much within the equity of the article as the other.

As regards the authorities, in Pennu Kutti v. Valia Rani of Ambadi Kovilagam, this Court held that the words ‘purchased from’ in article 134 must be construed as including ‘mortgaged by.’ The judgment in the case in question contains the following passage:—“In terms the article applies to suits brought for the recovery of properly mortgaged and afterwards ‘purchased’ from the mortgagee in good faith and for value. The word ‘purchased’ is not to be restricted to transactions dealing with, or purporting to deal with, the whole proprietary interest. It applies equally to cases in which a less interest is expressed to be created. A mortgagee, quoad the interest he takes, is a purchaser, so also is a lessee.” In my opinion this is a correct exposition of the law upon the point in question. In the same judgment, in dealing with the case of Radanath Doss v. Gisborne, where it was held by the Judicial Committee that the person who took the conveyance was not protected by the article, it is pointed out that, in the Privy Council case, the conveyance to the persons who claimed the benefit of the article only purported to be, and only operated as, an assignment of the rights of a mortgagee. In the case then before this Court, and in the present case, there was a mortgage executed by a person who, though in law a mortgagee, professed to be dealing with the property as absolute owner. The judgment in Pennu Rani v. Valia Rani of Ambadi Kovilagam was not reported and is consequently not binding upon us (section 3, Act XVIII of 1875), but I agree with the conclusion at which the Court arrived and with the reasons upon which that conclusion was based. The case has been followed by the Bombay High Court in Yesu Ramji Kalnath v. Balkrishna Lakshman and in later decisions of that Court. The point was raised before a Full Bench of the Allahabad High Court (Behari Lal v. Muhammad Muttaki), but it was not necessary to determine it for the purposes of the case then before the Court and the two Judges who dealt with the point differed in their views. As regards the Calcutta High Court it would seem from the judgment in Nilmony Singh v. Jagabandhu Roy, that the Judges who decided that case were prepared to construe article 134 as it has been construed by this Court and by the Bombay High Court.

It will thus be seen that there is abundance of authority in support of the view that the word ‘purchased’ in article 134 means purchased in the sense in which it is familiar to English lawyers and not in the restricted sense.

As regards the authorities which may be said to support the opposite view, as has already been pointed out, the transaction in the case which came before the Judicial Committee was essentially different from the transaction in the present case. In Radanath Doss v. Gisborne the person who claimed to be entitled to the benefit of the article merely took an assignment of a mortgage. The decision of the Judicial Committee turned upon the construction of section 5 of Act XIV of 1859 which provided as follows:—“In suits for the recovery from the purchaser or any person claiming under him, of any property purchased bonâ fide, and for valuable consideration from a trustee, depositary, pawnee or mortgagee, the cause of action shall be deemed to have arisen at the date of the purchase.” With regard to the Privy Council decision it is to be observed, in the first place, that their Lordships were considering the question—not whether the person who, in the case before them, claimed to be protected as a ‘purchaser’ had acquired, under the law of limitation, a right to be redeemed by the original mortgagor, but whether he had acquired an absolute title as against the mortgagor. This is clear from the passage in the judgment in which their Lordships observe:—“Their Lordships desire to say that the provision of this section is founded, no doubt, upon considerations of high policy,—of a policy which their Lordships do not at all doubt is one which is extremely beneficial to India, having regard to the circumstances of that country. But their Lordships cannot fail to observe that the provisions of this section are of an extremely stringent kind. They take away and cut down the title, which ex hypothesi is a good title of a cestui que trust, or of a person who has deposited, pawned, or mortgaged property; they cut down that title as regards the number of years that the person would have had a right to assert it; from a very great length of time, sixty years, they out it down to twelve years. It is, therefore, only proper that any person claiming the benefit of this section should clearly and distinctly show that he fills the position of the person contemplated by this section, as a person who ought to be protected.” This passage is cited with approval by the Judicial Committee in their judgment in Juggernath Sahoo v. Syud Shah Mahomed Hoosein. In the present case the purchaser only claims that he has acquired under the law of limitation the right to be redeemed. With regard to the meaning of the word ‘purchaser’ their Lordships observe:—“It cannot be a person who purchases a mortgage as a mortgage, because that would be equivalent to an assignment of a mortgage; it would be a case of a person taking a mortgage with a clear and distinct understanding that it was nothing more than a mortgage. It therefore must mean, in their Lordships' opinion, some person who purchases that which de facto is a mortgage upon a representation made to him and in the full belief that it is not a mortgage, but an absolute title.” The question, therefore, seems to depend upon the interest which the assignor represents himself as capable of conveying. In the case before the Privy Council he merely represented himself (as their Lordships in effect held) as capable of conveying a mortgage interest and he merely purported to convey this interest. In other words, he assigned a mortgage. In the present case he represented himself as capable of conveying what would be called in England a fee-simple title and he purported to execute as mortgage of an estate in fee-simple.

For the reasons above stated I think the present case is distinguishable from the case before the Privy Council, and I do not think that the decision of the Privy Council is a decision which precludes us from holding that the appellant, in the present case, is a ‘purchaser’ within the meaning of article 134.

As regards the case (Muthu v. Kambalinga), it would seem that the observation in the judgment of Sir Muttusami Ayyar—“The party relying on article 134 …. is bound to show that he purchased the absolute title and that he paid value for it is made with reference to the purchase of an absolute title in contradistinction to the purchase, or assignment, of a mortgage. Sir Muttusami Ayyar was a member of the Court which decided (Pennu Kutti v. Valia Rani of Ambadi Kovilagam), and I do not think that, in the latter case, the learned Judge intended to lay down any proposition of law which was inconsistent with his judgment in the earlier case. In Mana Varma Valia Raja v. Kesava Potuval, the facts were, for the purposes of the point in question, practically the same as the facts in present case, and the Court held that article 134 did not apply. The learned Judges were of opinion that the case was governed by the decision of the Privy Council. For the reasons which I have already stated I do not think it was.

It is not necessary to infer that because the word ‘purchaser’ occurs in other articles of the Schedule in its restricted sense as indicating a person who acquires a title as absolute owner that the word is used in that sense in article 134. The meaning of the word in any given article must depend upon the context. I do not think that the use of the word ‘assigns’ in section 10 of the Act and of the word ‘purchased’ in article 134 affords any indication that the latter word is used in its non-legal sense. In section 10, the expression used is ‘legal representatives or assigns’ and is obviously the only appropriate expression.

In the judgment in Mana Varma Valia Raja v. Kesava Potuval this Court appears to have assumed that, if ‘purchased from’ is to be construed as including ‘mortgaged by,’ a premium would be put upon fraud, inasmuch as the original mortgagee might redeem the property from his mortgagee and thus become the absolute owner as against the mortgagor. The same assumption is made by Davies, J., in his order of reference in the present case. This assumption does not appear to me to be well-founded. By redeeming his mortgage the original mortgagee would, as against the original mortgagor, be in no better position than his mortgagee, who had merely acquired a prescriptive right to be redeemed by the original mortgagor. It of course follows that if the original mortgagor before he can recover possession has to pay off the sub-mortgagee instead of the original mortgagee, the original mortgagee benefits by having made what is, ex hypothesi, a false representation to his mortgagee, but it is not a question of the original mortgagee benefiting, but of a bona fide ‘purchaser’ being protected. The law of limitation necessarily operates in many cases to the prejudice of the rights of innocent parties. But the policy of the law is to give rights by prescription—a policy which, as pointed out by the Judicial Committee, is extremely beneficial to India, having regard to the circumstances of this country.

I am assuming that there is no procedure by which the original mortgagor can recover from his mortgagee any moneys which he has had to pay the sub-mortgagee as a condition of his recovery of possession. As to this I desire to express no opinion.

For the reasons stated above the answer to the reference made to us should, in my judgment, be in the affirmative.

Shephard, J.:— I desire to add a few words by way of explanation of my previous judgment. When I put the case of a man purchasing from a trustee and said that by force of limitation he would acquire an absolute title, I did not mean that he would acquire a larger interest than that which was in terms conveyed to him. If the conveyance were by way of outright sale, the title acquired would be absolute. If the conveyance were by way of mortgage or lease, the title acquired would correspond. As the interest which a man can acquire by adverse possession may be limited by the nature of his possession (Radanath Doss v. Gisborne as to trust estate and limitation), so the interest which the law gives a man who has taken from a trustee or mortgagee cannot be greater than that which was ostensible conveyed to him. It follows that, in the case of a mortgage taken from a mortgagee or trustee, the real owner still has a right of redemption a gain him on the footing of the mortgage under which he claims. The effect of limitation is to put his mortgage given by a mortgagee or trustee on the footing of a mortgage executed by the real owner and on no higher footing.

A point is made of the change of language in section 10, the word assignee being substituted for ‘purchaser’ which is found in section 10 of the Act of 1871. The reason for the change of language appears to me quite obvious. The explanation appended to the section of the Act of 1871 as an expedient for saving purchasers in good faith from the effect of the section was decidedly awkward, because it is not usual to include ‘purchasers’ in the term ‘representatives.’ It was natural to alter the structure of the section and equally natural for the Legislature when using the term ‘representatives’ to couple with it the phrase usually associated with that term or with the term ‘executors or administrators,’ viz., the term 4 assignee.’

Davies, J.:— The question is whether the term ‘purchased’ in article 134 of the second Schedule to the Limitation Act of 1877 includes a mortgagee or whether it refers only to the purchaser of an absolute title. The contention is that the term is used in its legal signification in England which would undoubtedly include a mortgagee. But the doubt is whether the Indian Legislature has used the term in that sense. I think not. I may first remark that the Indian Legislature is not in the habit of using English technical law terms in the Acts it frames for India. And I next remark that this very term ‘purchaser’ is a striking illustration of my former observation. In every other article of the Schedule where the word ‘purchaser’ is used, namely, articles 136, 137, 138, 165, 166 and 167, it relates to a sale exclusively, and so also in article 133 the word ‘purchase’ is used as the correlative of property ‘bought.’ The word thus having been used everywhere else in its ordinary sense of a buyer, I cannot see why an exception should be made as to its meaning in the single case of article 134. A further indication of the intention with which the Legislature used the word, that is, in its ordinary as opposed to its technical sense, is that in section 10 of the same Limitation Act where they wish to indicate a purchaser in the technical sense of the term, they have instead of using that word, used the word ‘assigns’ It seems to me clear that had they intended the word ‘purchaser’ on article 134 to include mortgagees and lessees they would have used the word ‘assigns’ as they have done in section 10. In the case of Radanath Doss v. Gisborne, Lord Cairns, in discussing the use of the term ‘purchaser’ in the 5th section of the Limitation Act XIV of 1859, then in force, corresponding to articles 133 and 134 now under consideration, states that it relates to a purchaser ‘according to the proper meaning of that term,’ by which I understand him to have meant not in the peculiar sense in vogue among lawyers in England. This view is confirmed by the passage in his judgment which follows:—“Now, what is the meaning of the term ‘purchaser’ in this section? It cannot be a person who purchases a mortgage as a mortgage, because that would be merely equivalent to an assignment of a mortgage; it would be the case of a person taking a mortgage with a clear and distinct understanding that it was nothing more than a mortgage. It, therefore must mean, in their Lordships' opinion, some person who purchases that which de facto is a mortgage upon a representation made to him, and in the full belief that it is not a mortgage, but an absolute title.” The purchaser there contemplated is surely one who is buying or thinks he is buying a complete title. The language here and elsewhere in the judgment of the Judicial Committee unmistakeably alludes to an outright sale—a vendor on the one part and a purchaser on the other. I does not refer to a person mortgaging as if he had an absolute title to mortgage, which is our present case, but to a person selling as if he had an absolute title to sell. That is the effect of the decision of the learned Judges in Muthu v. Kambalinga and in Mana Varma Valia Raja v. Kesava Potuval. A further ground for holding that my interpretation is correct is the iniquitious results that would follow if the term ‘purchaser’ were held also to include a mortgagee. One anomaly has already been pointed out by me in the order of reference, viz., that a sub-mortgagee would get a prescriptive title in twelve years, while the mortgagee from whom he derives would not get such a title for sixty years, by which fraud would be made easy. In order perhaps to meet this objection the appellant's pleader says that he does not now claim what article 134 would give him, that is, an absolute title, but only a mortgage right. He claims only to have prescribed for a mortgage right, and would allow the plaintiff the usual sixty years for redemption. But supposing that is right, another difficulty arises which is insurmountable. It is throwing upon the plaintiff the burden of paying off a mortgage which be never made and the fruits of which he has never enjoyed. The original mortgagee has taken the money raised on the sub-mortgage and if the plaintiff has to pay off the sub-mortgagee instead of the first mortgagee doing so, the latter will be allowed to benefit by his own fraud. There is no means suggested by which the original mortgagee can be made to redeem the sub-mortgagee. So that if the plaintiff does want to get his property back he will have to pay a charge upon it which be did not create and of the existence of which he was unaware, while the original mortgagee who gave a bad title and the sub-mortgagee who took a bad title are to benefit at the innocent owner's expense. When the plaintiff has paid off the sub-mortgagee, there seems no means by which he could recover the money from the original mortgagee, for the original mortgagee not being willing and anxious to redeem, the payment, made by the plaintiff would only be a voluntary payment and therefore irrecoverable. In the case of the out and out purchaser from the mortgagee, who is protected under article 134, it would be quite different, because the purchase money would be in the hands of the mortgagee, and he could no doubt be made to disgorge it in a suit properly framed on an account or by way of damages. But such a course does not appear to be open in the case before us. Leading then, as I think it would, to such monstrous results if a mortgagee is considered to be a purchaser within the meaning of article 134, I must hold that he is not, and therefore answer the reference made to us in the negative.