1. The question involved in this appeal is whether the execution of the mortgage decree in favour of the plaintiffs is barred by limitation. The Subordinate Judge held that the application for execution presented by the plaintiffs is not barred by limitation and the defendant has preferred this appeal.
2. The mortgage decree in favour of the plaintiffs was passed on 14th September, 1916. An execution application was filed on 25th September, 1917. It was dismissed on 17th October, 1918. The present application is dated 9th March, 1923. The contention of the plaintiffs is that a certain sum of money in Court was paid out to them by order dated 31st March, 1920 and the cheque was actually issued on 1st April, 1920 and that their application is therefore within three years from the date of the order for payment out. On the other hand Mr. Subramania Aiyar for the appellant contends that the application for payment out of the sum of money in Court is not a step-in-aid of execution and therefore plaintiffs' application for execution is barred. The defendant's guardian obtained leave of the Court for mortgaging the defendant's property for the purpose of raising money to pay off the plaintiffs' debt. Sanction was given to the guardian to raise money in 1917 and on 14th October, 1918 he hypothecated the defendant's properties to one Kasturi Naicker by Ex. I. The recital in Ex. I is :
" Particulars of receipt of the said amount Rs. 17,690 is the amount received by way of direction given (to you) for settling and discharging the sum (payable) under the decree obtained against the said minor by Appanaickenpettai K. Guruswami Naicken and others in O.S. N0.64 of 1915 on the file of the said Sub-Court and for obtaining receipt and retaining it as a title-deed herefor."
The mortgagee seems to have paid the amount into Court on 19th March, 1920 whereupon the plaintiffs applied for an order for payment out.
3. The question is whether in the circumstances an application for an order for payment out by the Court is a step-in-aid of execution. It is well settled that an application for payment out of money in Court by a decree-holder is a step-in-aid of execution if the money in Court was realised in execution of the decree. Venkatarayulu v. Narasimha ILR 2 M 174, Kerala Varma Valiya Rajah v. Shangaram (1892) ILR 16 M 452, Koomayya v. Krishnamma Naidu (1893) ILR 17 M 165 : 3 MLJ 296 and Begunchand v. Mugat Rao (1896) ILR 22 B 340. In this case the money in Court was not realised by the execution of the plaintiffs' decree. The plaintiffs' execution petition was dismissed so far back as 17th October, 1918. The money was paid into Court to the credit of the suit and the plaintiffs applied for payment to them of the amount in Court. Where an amount of money is in Court to the credit of a suit and such amount has not been the proceeds of execution an application for payment out cannot be said to be an execution application or an application in aid of execution. In such a case the plaintiff has to only apply to the Court for payment and the Court makes the payment without reference to the judgment-debtor in the suit. By asking for payment of the amount in Court, the plaintiff does not do anything to aid the execution of the decree. Where money is realised in execution of the decree he has to ask the Court for an order to pay the money to him, and the Court, after considering whether there are other claimants in respect of the amount, passes an order in favour of the applicant. Such an order is a step-in-aid of execution. But, where the money is to the credit of the suit and all that is required of the plaintiff is to make an application for payment, it cannot be said that what he does is a step-in-aid of the execution of the decree.
4. In Kuppuswami Chettiar v. Rajagopala Aiyar (1921) ILR 45 M 466 : 42 MLJ 303 Ayling and Venkatasubba Rao, JJ. held that an application to be a step-in-aid of execution should be one made in a pending execution application. Ayling, J., in delivering the leading judgment of the case, differed from an observation of Ramesam, J., that there is no warrant for the view that an application to take a step-in-aid of execution should be made in execution, meaning apparently until an execution is pending. The application for the transfer of a decree from one Court to another for the purpose of execution is a step-in-aid of execution; and the application is in the form of an ordinary execution application with the prayer that the decree be transmitted to another Court for execution. Such an application is a step-in-aid of execution. In such a case it is necessary that the decree should be transferred to another Court for the purpose of execution; and therefore what is done in order to execute the decree is considered to be a step-in-aid of execution. But where the act of the plaintiff is not in furtherance of execution or in a pending execution, his act cannot be said to be one in aid of execution.
5. Mr. Krishnaswami Aiyar for the respondents relies upon Thangishethithi v. Doya Shethi (1917) 35 MLJ 375 as supporting his contention that the order of the Court for payment out is a step-in-aid of execution. That case is distinguishable from the present case, as in that case an order of the Court was necessary for paying out to the plaintiff the amount of Rs. 500 paid into Court as security for costs. There the learned Judges observed as the money was deposited only as a security an order of the Court was necessary to make it available for payment towards the decree amount. An application for such a purpose and for payment out of the money is thus clearly necessary; and such an application is one in execution of the decree itself. In this case as we have already observed no such order was necessary in order to enable the plaintiffs to draw out the money standing to the credit of the suit.
6. If payment is made to the decree-holder by the judgment-debtor or by anybody on his behalf, or by the Receiver appointed by the Court to be in charge of the defendant's properties, it would not amount to a step-in-aid of execution. In Appuswami Naichen v. Kotha Naicken (1899) ILR 33 M 448 it was held that payment by the Receiver appointed by a Court out of the rents and profits of the defendant's properties was not a step-in-aid of execution. The Receiver was not appointed for the purpose of execution; he was appointed during the pendency of the suit, and the Court paid to the plaintiff the amount that was collected by the Receiver and paid by him into Court. The learned Judges observed at page 452 :
"We do not think that it can be properly said that such money was collected or paid in execution of the decree though no doubt it was as a consequence of the decree that the appellants became entitled to it. The appellants in demanding the payment of these current profits of the estate did nothing towards the execution of the decree, for the decree did not deal with these profits."
In the present case the mortgagee paid into Court a sum of money which he was directed to pay directly to the decree-holder; and the Court paid the money out to the plaintiffs on their applying for it. The Court, therefore, simply acted as the agent of the mortgagee and not as a Court executing the decree. Jackson, J., in a recent case in
Narayana Nair v. Kunhiraman Nair (
1934) 20 LW 190 observed that the mere payment however is not a step-in-aid of execution and it is only a petition put in to certify such payment that can constitute a step-in-aid of execution such as will give a fresh starting point of limitation under
Article 182 of the Indian Limitation Act. We hold that in this case the payment out by the Court to the plaintiffs on their application on 31st March, 1920 is not a step-in-aid of execution and the plaintiffs' application therefore is barred by limitation.
7. The next contention is that the payment towards the decree amount was made by a person duly authorised on behalf of the defendant and such payment having been made by the Court as the agent of the judgment-debtor and the payment appearing in the handwriting of the person making the same by reason of the cheque having been signed by the Court, the terms of Section 20 of the Limitation Act have been satisfied and therefore the application is within time. In the first place it is to be noted that the mortgagee was not authorised to pay the amount into Court. The terms of Ex. I are clear. The guardian of the defendant did, with the sanction of the Court, execute Ex. 1, a mortgage in favour of Kasturi Naicker and directed him to pay the amount to the plaintiff and obtain a receipt from him and to retain it as a title. The mortgagee, therefore, was not authorised to pay the money into the Court. Secondly, the document was executed on 14th October, 1918, and the mortgagee was asked to pay the amount without any delay, for in the particulars of consideration the recital is
" Rs. 17,690, the amount received by way of direction given (to you) for settling and discharging the sum (payable) under the decree obtained against the said minor by Appanaickenpettai K. Guruswami Naicken and others in O.S. No. 64 of 1915,"
etc. The mortgagee, therefore, was not authorised to keep money with him for a considerable time, i. e., for more than a year and a half, and then to pay it into Court. The agent who can give the creditor the benefit of Section 20 has to act within the terms of his authority. If he exceeds his authority or does something which is not actually covered by his authority he cannot bind the principal so as to give the creditor the benefit of
Section 20 of the Limitation Act. We think this case comes within the principle of the decision in Linsell v. Bonsor 2 Bing NS 241 :
132 ER 95. In that case the defendant's agent had instructions to offer the claimant a part of the debt in discharge of the whole. The claimant refused to take the money on those terms and the agent paid it in part discharge. It was held that this was not a part-payment by defendant to take the case out of the operation of the Statute of Limitations. In
Alagappa Chettiar v. Subramania Pandia Thevar (
1934) 26 MLJ 509 it was held following Linsell v. Bonsor 2 Bing NS 241 :
132 ER 95 that though the mortgagee had authority to pay off the 'debt in full, he had no authority to make a pure payment of interest as such so as to bring the case within
Section 20 of the Indian Limitation Act.
8. Mr. T. M. Krishnaswami Aiyar relied upon in Govinda Plllai v. Dasai Goundan (1921) ILR 44 M 971 : 41 MLJ 423 as supporting his contention. In that case a certain amount paid by the Government under the Land Acquisition Act into Court was paid out to the decree-holder. It was held that the payment of that amount was part-payment of the principal of the decree debt and the judgment by whose order the payment was made was an agent duly authorised by the judgment-debtor to make it and the fact of the payment appeared in the handwriting of the Judge within Section 20 of the Limitation Act. This case is distinguishable from the present case on the facts. In that case a portion of the hypothecated property was acquired by the Government under the Land Acquisition Act, and Rs. 3,400 was deposited in Court for the Government to the credit of the suit and the decree-holder 'drew the amount from Court. There the money was paid into Court by the Government under the provisions of the Land Acquisition Act. Seeing that the land acquired was subject to a mortgage and there was a decree for the sale of the property, the Government paid the compensation for the land acquired into Court as it was bound to do. In the present case the mortgagee was hot required by the mortgagor to pay money into Court. He chose to pay into Court out of his own sweet will and pleasure when it suited him. In the first place he had no power to pay it nearly one and a half years after the execution of Ex. I, and, in the second place, he was not asked to pay the amount into Court but was asked to pay the money directly to the decree-holder and obtain a receipt from him. Therefore he was not a person specially authorised to pay the amount into Court so that it may be paid out to the decree-holder. This point also is found in favour of the appellant.
9. In the result the appeal is allowed and the order of the Subordinate Judge is set aside with costs throughout.