The Chief Justice. — 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 Nambiar for the appellant and Mr. Ananthakrishna Aiyar for the respondents. 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.

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 P. S. Kothandarama Chetty, against amongst 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. 1620. 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 Sect. 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.

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. Seth Rupchand, 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. Subbayan, by the Division Bench of this Court, Napier and Odgers, JJ., in Subbarama Aiyar v. A.P.T. Veerabadra Pillai(3), and finally in the recent case, in Kandasami Reddi v. Suppammal(4) 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 he, 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 interst. 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. 2629-4-0”,

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., R. 5, O. VIII of the Civil Procedure Code, 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. 2629-4-0. 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, I 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; and 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 dented 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.

The question remains as to how much he is entitled to succeed for; and I think the amount that he would be entitled to take is proved here, as the amount shown in the first of the admissions, plus interest since that data. As a result, there will be the usual mortgage decree for the Official Assignee for Rs. 3,450, with costs here and in the court below. Time for payment six months. Interest will be at 9 per cent., till then, and 6 per cent., thereafter.

Krishnan, J.—The decision of this appeal turns purely upon a question of law, namely, one of limitation. The suit is brought to enforce a mortgage, executed by one Narayani Animal, to whom the suit property orginally belonged, mortgaging the property in 1894, in favour of one Narayana Aiyar. In 1900, Narayana Aiyar became insolvent and whatever rights he had under this mortgage passed to the Official Assignee. This suit was brought by the Official Assignee to enforce the mortgage, by sale of the property, as against the representatives of the original mortgagor, Narayani Ammal, and others. Prima facie, as the learned Judge remarks in his judgment, the suit will be barred, and to save it from the bar of limitation, the Official Assignee relies upon two acknowledgments; and what we have to consider in this appeal is whether these acknowledgments are good acknowledgments or not, under Sect. 19 of the Limitation Act; to give fresh starting points for limitation to run. One is said to be contained in Ex. IV, a petition, which Narayana Aiyar, as the executor and trustee appointed under the will by Narayani Ammal, filed in 1903, for the probate of that will. In the schedule of assets and liabilities, attached to that petition, there is an entry to the effect, “item 3—amount of mortgage encumbrances Rs. 1,620.” The other acknowledgment relied on is said to be contained in a written statement filed in 1913, by the same Narayana Aiyar, in a suit brought in 1912 by one Kothandarama Chetty. The learned judge who tried this case has considered only the question whether the second of these acknowledgments is a good acknowledgment or not, for as he came to the conclusion that it was not the suit failed. I take, therefore, that point for consideration first.

Before dealing with the argument adduced regarding the question whether it is a good acknowledgment or not, I shall briefly state under what circumstances this written statement came to be filed, as in construing a written statement, it is necessary to refer to the plaint, in answer to which it was filed, and for that purpose it is necessary that we should know how the plaint came to be filed. There was one Devaraja Mudali, who had a money claim, against Narayana Aiyar and he brought a suit in the Small Cause Court and obtained a decree against Narayana Aiyar, the mortgagee. He then got the decree transferred to the City Civil Court, and in execution of that decree, sold the right, title and interest of Narayana Aiyar, in the mortgage, and purchased it himself. Subsequently, he brought a suit, as mortgagee, whose rights he claimed to have obtained, by his auction purchase, in the City Civil Court, to enforce the mortgage, against the mortgagor by sale of the property. This was in 1906. By that time, Narayani Ammal was dead, she having died in 1900. In bringing the suit, he made one Murugammal, the legal representative of the said Narayani Ammal and conducted the suit. He obtained a decree in the City Civil Court, which was confirmed in appeal; and in execution of that decree, this property was brought to sale by the Court. In that sale, one Kothandarama Chetti became the purchaser in August, 1911. He tried to obtain possession through Court, but failed, as he was obstructed by Narayana Aiyar; and thereupon, he brought the suit, O. S. No. 425 of 1912, in November, 1912, in which he claimed, first of all, to recover possession of the property, from the obstructor, after removing the obstruction; and secondly, if the Court found that he had not obtained a proper title to the property, he claimed that he had at least become the owner of the mortgage interest and therefore he should be given a decree for the mortgage amount, which he stated to be Rs. 2629 and odd on that date, as against the estate. He also made certain other claims against certain other persons, with which we are not now concerned. In that suit, Narayana Aiyar was one of the parties and the Official Assignee was also added as a party. Narayana Aiyar was then representing the estate of Narayani Ammal as the executor and trustee under her will and the Official Assignee was representing the morgagee's interest, that passed to him, by virtue of the insolvency of Narayana Aiyar. The written statement was filed in that suit by Narayana Aiyar as mortgagor, and it is Ex. VI in this case. It is contended for the plaintiff that there is a sufficient acknowledgment in that written statement of the liability of the estate for the mortgage debt. The clause relied upon, as containing that acknowledgment, is the first clause, in the written statement which runs thus:

“This defendant admits that Narayani Amma referred to in paragraph 3 of the plaint, was the owner of the plaint property and that she mortgaged the same in favour of this defendant, on or about the 6th October, 1894, as alleged in the said paragraph.”

It is contended for the other side that this is not a sufficient acknowledgment, to take the case out of the bar of limitation, because it merely says that there was a mortgage in 1894, and that it makes no statement whatsoever admitting any existing liability to pay the mortgage debt. It is also contended that this statement should not be taken as having been made by Narayana Aiyar, as representing the estate of the mortgagor, at any rate that it is uncertain whether it was made by him, in his capacity as the representative of the mortgagor, or in his own capacity as mortgagee; and it is argued that this is also one reason for refusing to accept the statement as a sufficient acknowledgment of the liability under Sect. 19 of the Limitation Act, under which the acknowledgment must be made by the debtor, or on behalf of the debtor by a person duly authorised to make the same. These, two arguments have been supported by the learned judge who tried the case but after hearing the arguments in appeal, I agree with the learned Chief Justice, that these are not sufficient grounds for refusing to accept this statement in the written statement, as constituting a proper acknowledgment under Sect. 19.

As regards the objection, that it is not clear that this acknowledgment was made; by Narayana Aiyar, in his capacity as representing the mortgagor's interest, and not in his own capacity as mortgagee, it must be remembered that he was made a party in that suit mainly as representing the mortgagor's interest, because the mortgagee's interest had already passed to the Official Assignee. No doubt, there are certain statements in the written statement, wherein he does refer to his interest as mortgagee also; never the less, I think in the main, he was in the suit as representing the estate of the mortgagor; and I think we are bound to give effect to any statements made by him, apparently in his capacity as the mortgagor's representative, and not say that it is doubtful whether he made it in one capacity or other and reject it. Where it is clear front the context, that any statement in the written statement is made by him in his capacity as mortgagor, of course, we must take it that it refers to his capacity as such and not to his capacity as mortgagee, though the written statement as a whole is a combined one. I have no doubt, therefore, that this argument fails, as I have come to the conclusion that the statement in paragraph (1) of the written statement may very reasonably be attributed to him, as being made, on behalf of the mortgagor of the estate, which he was representing in that suit.

As regards the second argument, which is a little more difficult to deal with, there can be no doubt, as pointed out by the learned Chief Justice, that there is an implied admission, if not an express admission, in the written statement that the mortgage debt on the date of the written statement was standing at the figure of Rs. 2629 or thereabouts; it was so expressly claimed in the plaint against the estate. There is no denial whatever of that, in the written statement; and that being so, it certainly can be inferred that the amount was admitted under O. 8, R. 5 of the Civil Procedure Code. I think the same inference may be drawn in this case also, in construing the written statement, for the purpose of seeing whether the acknowledgment in the first paragraph was that of a dead mortgage, or of a mortgage that was then subsisting, and that we are justified in holding that he was there referring to a subsisting mortgage. The learned judge has referred to certain other paragraphs in the written statement, as showing the contrary, namely, paragraphs 6, 8 and 15; but they do not seem to me to refer to the subsisting character of the mortgage at all. All that is said in those paragraphs is that the plaintiff was not entitled to claim anything, under the mortgage, because Kothandarama Chetti had not got a proper title, as the person, who was added as the legal representative in the suit by Devaraja Mudaliar, had never occupied that position at all.

Our attention has been called to the case of Maniram Seth v. Seth Rupchand. In that case, an acknowledgment was made by a person, as the representative of a deceased person, called Motiram, that Motiram had an open and current account with the defendant, at the time of his death. This was treated as a sufficient acknowledgment of a subsisting liability, although the acknowledgment itself was made only about a year after he died. At page 1059 their Lordships say this:

“the acknowledgment, to which attention has been directed, is followed in the same paragraph by the following sentence. The alleged indebtedness does not affect his” (the respondent's) “right to apply for probate.” Stress was laid by the Civil Judge upon the word ‘alleged’, He was of opinion that the word ‘had’ in the sentence ‘for the last five years he had an open and current account with the deceased’ and the word ‘alleged’ were fatal to the validity of the acknowledgment. Their Lordships cannot share this opinion. The first sentence shows that there were open accounts at the death of Motiram. If nothing further is alleged, the natural presumption is that they continued unsettled at the time the statement was made. The sentence which follows is perfectly consistent with this admission. The meaning is ‘even if there is a balance against the respondent, that does not disqualify him from fulfilling the duties of an executor’ and it has been pointed out that what is relied upon here is an acknowledgment, subject to the condition that an adverse balance really exists, and the condition is fulfilled in fact.”

In this paragraph, the sentence occurs: ‘If nothing further is alleged, the natural presumption is that they continued unsettled, at the time the statement was made. As at present advised, I am not prepared to go so far as Miller, J., in thinking that their Lordships have laid down a general rule, that, whenever a debt is said to have been incurred at an anterior date and no statement is made that it has been paid off, we must necessarily draw an inference that that debt is admitted to be still subsisting, at the date of the acknowledgment. I am prepared to accept the interpretation put by the ruling of this Court, of Ayling and Venkatasubba Rao, JJ., in Kandaswami Reddi v. Suppammal, where Ayling, J., who delivered the judgment, in which, Venkatasubba Rao, J., concurred, says:

“I can see no ground whatever for holding that their Lordships were considering anything but the circumstances of that case, or intended to lay down any rule of legal inference. The presumption in that case was very strong.”

Then he considers how the presumption arose from the facts of that case, and then his Lordship says:

“That is the meaning of the paragraph quoted, taken as a whole. If the defendant had been in a position to say that the account had been settled between the 6th October, 1898 and the 20th September, 1899, he would certainly have said so; for this would have been a much better answer to the plaintiff's objection. As he did not say so, the inference that the accounts still remained unsettled is natural and obvious.”

It follows then that in each case we have to consider the circumstances in which the statement was made that there was a debt and see whether it was really intended to convey any impression that that debt was subsisting at the date of the statement or not: and if we can, from the circumstances, infer that the intention of the person making the statement was to convey the impression that the debt was still subsisting, we will be justified in holding that it is an acknowledgment of a subsisting liability. I do not think that a mere statement that a debt existed at one time, without anything further, as was the case in Second Appeal No. 52 of 1921, to which our attention has been drawn, a decision to which I was a party, is sufficient to enable the Court to say, that there is an acknowledgment of a subsisting liability, even though the person who makes the statement does not go on to say that the liability has ceased. In that Second Appeal, a man was being examined as a witness and he had to answer questions put to him. He had no opportunity of saying anything further than that he had executed a mortgage bond, for a prior debt, and he therefore said nothing; and Spencer, J., and I held that there was no acknowledgment of a subsisting liability there. I adhere to that opinion. But in this case, as I have already pointed out, the circumstances are perfectly clear to show, that when Narayana Aiyar made his statement, in paragraph 1 of the written statement, he really meant to say, not only that there was a mortgage created in 1894, but also that that mortgage was subsisting on the date of the written statement. That being so, I think it complies with the requirements of law, contained in Sect. 19 of the Limitation Act. One other case, cited to us, is Subbarama Aiyar v. A.P.T. Veerabadra Pillai. In that case, and also in the case decided by Miller, J., there were circumstances, from which the inference was drawn in those cases, that the acknowledgments were of subsisting debts.

I shall now deal with the other acknowledgment pleaded. In order to show that the acknowledgment in the written statement is effective in saving limitation, the plaintiff has to show that it was made at a time, when the mortgage debt was subsisting; and for that purpose he has to rely on another acknowledgment, because the second acknowledgment was made more than 12 years from the date of the mortgage itself. The first acknowledgment is in Ex. IV. I have already stated its character, and there can be no doubt whatever that that acknowledgment refers to this mortgage debt. It is said by learned counsel for the Official Assignee before us, that there was no other mortgage encumbrance, which Narayani Ammal had created on any part of her property; and the amount of the mortgage encumbrance, mentioned in Ex. IV, is certainly over the amount of the suit mortgage and probably represents the amount then due, of principal Rs. 1,000 and interest thereon; possibly, some interest had been paid off. Had the other side objected to our identifying this mortgage encumbrance, as the plaint mortgage one, it would have been necessary to allow the plaintiff to adduce evidence to prove the identity of the two, as he could be allowed to do under Sect. 19, Expl. 1, of the Limitation Act; but apparently the point was not pressed in the lower Court; and therefore I agree with the learned Chief Justice that it is not necessary to send the case down to have the matter cleared up.

In the view I take, the plaintiff's suit must be held to be in time; and there being no other defence of any importance or value in the case, and as the parties are not in dispute, with regard to the amount of the mortgage, I agree with the learned Chief Justice that we should give a mortgage decree for the amount due, with costs in both Courts.

C.KAppeal allowed.