TMI Blog1963 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... oint family property of himself and his father. The plaintiff assigned the decree in favour of Chidambaram Chettiar, who is the appellant in C.A. 105 of 1961. He filed an execution application but the execution proceedings commenced by him proved infructuous because the first defendant was adjudicated an insolvent on February 27, 1945. On September 9, 1946 a composition of the debts due from the insolvent and his son, the second defendant was arrived at. To the deed of composition the second defendant was also a party though he was not adjudicated an insolvent. Under that deed the creditors, including the four appellants before us, agreed to take 40% of the dues, except one creditor who was to be paid a little more. The defendants, it may be mentioned, had extensive money-lending business in Burma and the bulk of their property was situate in that country. Under the composition arrangement, the entire property of the defendants, both in India and in Burma was to vest in four trustees, one of whom was the insolvent, that is, the first defendant to the suit. Two of the trustees were the present appellants, Chidambaram Chettiar and Krishnappa Chettiar, appellant in C.A. 104 of 1961. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the family, a sum of ₹ 600 per annum to individual No. 4 Trustees Venkatachalam Chettiar and a sum of ₹ 300 per annum to his son Nachiappa Chettiar for the aforesaid expenses. Clause 16 : After the annulment of the order of adjudication herein, the aforesaid Venkatachalam Chettiar shall, in respect of transfer etc., of management of the properties mentioned in C and D schedules, execute a general power of attorney in the favour of individual Nos. 1 and 2 trustees and have the same registered. 4. The composition scheme was accepted by the insolvency Court and the adjudication of the first defendant as insolvent was annulled by the court on December 19, 1946. 5. Due to political changes in Burma only very little was realised out of the Burma assets within the period of four years prescribed in the composition deed. The trustees who were empowered to extend the time did not extend it. The appellants, therefore, turned to the Indian assets and sought execution of their decrees against them. Two contentions were raised on behalf of the defendants. One was that the Indian assets could not be sold until the assets in Burma were completely exhausted and the other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a maintenance allowance of ₹ 600 and ₹ 300 annually being given to the 1st and 2nd defendant respectively at the time of distribution of the dividends. In respect thereof a notice was issued by the 2nd defendant on April 19, 1949 to myself and A. S. K. Krishnappa Chettiar aforesaid wherein there is an acknowledgment of liability in respect of the several debts mentioned in the said composition. Further the trustees have, acting under the authority given to them by the defendants under the said composition, paid me ₹ 562-4-0 on August 10, 1949 by way of dividend for this decree and have duly entered the same in the accounts maintained by them. Moreover I could not execute the decree during the four years from April 14, 1947 or any extended period during which the trustees had to manage, realise and distribute the assets of the defendants. There is therefore no question of limitation. 7. Similar grounds were set out in the affidavits filed by the other appellants also. 8. It may be mentioned that in each of the execution applications relief was claimed only against the second defendant because in insolvency petition No. 87 of 1951 filed by some of the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be certified even now at the instance of the decree-holder because it was open to the decree-holder to certify an adjustment at any time he liked. According to the learned Subordinate Judge, the adjustment precluded each of the appellants from executing his decree for a period of four years from April 14, 1947 and, therefore, the execution applications were within time. The High Court, however, disagreed with the Subordinate Judge on both the grounds and holding that the execution petitions were barred by time allowed the appeals. It may be mentioned that neither of the two courts below has considered the contention of the appellants in these appeals that the letter dated April 19, 1949 sent by the second defendant to two of the trustees operated as an acknowledgment of their liability or that dividends paid to the appellants by the trustees in August, 1949 operated to extend the time of limitation. 11. Mr. Viswanatha Sastri, who appears for the appellants in these appeals, has raised only two contentions. The first is that the principle underlying s. 15(1) of the Limitation Act is applicable to a case of this kind and that, therefore, the execution applications are withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction or an order. By no stretch of imagination can it be said that the acceptance by the insolvency court of the composition operated as a stay of execution of the decrees for the period of four years referred to in the deed or as an injunction. Further, the second defendant was not a party to the insolvency proceedings and could, therefore, not have been entitled to the benefit of the order of the court accepting the scheme of composition. 13. In support of his contention that the principles underlying s. 15(1) are applicable to a case like the present one, Mr. Sastri has strongly relied on the decision in Govindnaik Gurunathnaik v. Basawannawa Parutappa I.L.R. 1941 Bom. 435.. There, Beaumont C.J., has observed at p. 437 : Section 15 of the Act recognizes the principle that in computing the period of limitation prescribed for an application for the execution of a decree, any period during which the execution of the decree has been stayed must be excluded; and it would certainly seem right to apply a similar principle to applications in a suit which has been stayed; in terms, however, the section does not apply. The only authority on the point, to which we have been referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny well-recognized principle whereunder the period of limitation can be regarded as being suspended because a party is prevented under certain circumstances from taking action in pursuance of his rights. The Limitation Act is a consolidating and amending statute relating to the limitation of suits, appeals and certain types of applications to courts and must, therefore, be regarded as an exhaustive Code. It is a piece of adjective or procedural law and not of substantive law. Rules of procedure, whatever they may be, are to be applied only to matters to which they are made applicable by the legislature expressly or by necessary implication. They cannot be extended by analogy or reference to proceedings to which they do not expressly apply or could be said to apply by necessary implication. It would, therefore, not be correct to apply any of the provisions of the Limitation Act to matters which do not strictly fall within the purview of those provisions. Thus, for instance, period of limitation for various kinds of suits, appeals and applications are prescribed in the First Schedule. A proceeding which does not fall under any of the articles in that schedule could not be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used thereby and make good the losses; you should immediately pay off the creditors the dividends and in default my client will have to launch proceedings against you and seek reliefs through Court. 19. This letter was written by the vakil of the second defendant to the Trustees demanding payment of the maintenance allowance due to the second defendant. The second object of this letter was to require the trustees to pay out of the funds in their hands dividends due to the various creditors under the composition scheme. Mr. Sastri contends that this letter contains a definite admission of the jural relationship between the defendant on the one hand and the creditors on the other - i.e., the relationship of creditor and debtor and, therefore, this is an admission of liability under the decrees. Relying upon the decision of this Court in Khan Bahadur Shapoor Freedom Mazda v. Durga Prosad Chamaria [1962]1SCR140 , he says that the essential requirement for sustaining a plea of acknowledgment under s. 19 of the Limitation Act is that the statement on which it is sought to be founded must relate to a subsisting liability, indicate the existence of jural relationship and must be intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrounding circumstances can always be considered. Stated generally courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. Broadly stated that is the effect of the relevant provisions contained in s. 19, and there is really no substantial difference between the parties as to the true legal position in this matter. 21. In our opinion, this case is not of assistance to the appellants. In the appeals before us though there was a personal liability on the defendants under the various decrees, their liability which was created by the composition deed was only on properties in which they had, consequent on the creation of a trust under the composition deed, only a beneficial interest. This new liability had to be discharged by the trustees in whom the legal title to the property vested. Thus there were two different sets of persons who were liable, the defendants and the Trustees a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
