TMI Blog2006 (3) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... der which the period of limitation was 30 years. When the 30 years period is computed from 12.2.1954, the suit filed in the year 1981 was clearly within limitation. Whether the mortgage debt under the deed of mortgage dated 7.9.1935 stood discharged under Section 9 of the Tamil Nadu Debt Relief Act, 1979? - HELD THAT:- When the Debt Relief Act, came into force on 15.7.1978, the mortgage was very much subsisting. Section 9 of the Debt Relief Act contains special provisions in respect of mortgages. Sub-section (1) of Section 9 provides that the provisions of the said section applies to all mortgages executed at any time before 14.7.1978 and by virtue of which the mortgagee is in possession of the property mortgaged to him. Sub-section (5) of Section 9 provides that where the mortgagee has been in possession of the mortgaged property for an aggregate period of 10 years or more, then, the mortgage debt shall be deemed to have been wholly discharged with effect from expiry of the period of ten years or where such period expired before 14.7.1978, with effect from 14.7.1978. The said provision applies as the mortgage transaction does not fall under any of the exceptions enumerated in Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the legal representatives of the plaintiffs in a suit for redemption of mortgage. 2. Brief facts necessary for disposal of this appeal are:- 2.1) One Manickam Pillai obtained a loan of ₹ 300/- from Krishna Pillai and mortgaged his property situated in Prithivimangalam Village, Thyagadurgam Taluk, (for short 'the suit property') in favour of the said Krishna Pillai under a usufructuary mortgage deed dated 7.9.1935 (Ex.A-1). The deed provided that mortgagee is entitled to be in possession of the mortgaged property in lieu of interest till redemption. 2.2) The mortgagee (Krishna Pillai) assigned the said mortgage in favour of one Soundararaja Iyenger (also known as Soundararaja Achariar) under registered deed dated 12.2.1954 (Ex.A-3) by receiving ₹ 300/- from the assignee and delivered possession of the suit property to the assignee. The said assignee, Soundararaja Iyenger died leaving him surviving his widow Jayalakshmi Ammal and son Krishnaswamy Iyenger (defendants 1 and 2 in the suit). 2.3) The mortgagor Manickam Pillai died some years after executing the mortgage deed, survived by his widow and four daughters. His widow and first daughter Kuppammal die ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -; that they (first plaintiff and her sisters) approached him for discharging the said debts; that the property was valued at ₹ 1,000/-, and it was agreed that he should pay them ₹ 400/- and retain the balance of ₹ 600/- to discharge the two mortgage debts; that accordingly he paid ₹ 400/- to first plaintiff and her sisters in December, 1953 or January, 1954 and purchased the suit property under an oral sale; that as he did not have the funds to pay the mortgage debts, his friend Soundararaja Iyenger came to his rescue with the understanding that he (Soundararaja Iyenger) would discharge the usufructuary mortgage in favour of Krishna Pillai and simple mortgage in favour of Raju Pillai and obtain assignments of the mortgages, and thereafter receive the amount from the third defendant as and when he was able to pay the amount; that in pursuance of such arrangement, Soundararaja Iyenger paid the mortgage amount to Krishna Pillai and Raju Pillai and obtained assignments dated 12.2.1954 in his favour; that subsequently in the year 1960, the third defendant paid the amount to Soundararaja Iyenger; and that he obtained possession of the suit property in the year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mending the description of the suit property so as to be in conformity with the deed of mortgage dated 7.9.1935 (Ex. A1). 8. A learned Single Judge of the Madras High Court by judgment dated 1.9.1999, allowed the second appeal, and consequently, dismissed the suit, holding as follows:- (i) The concurrent finding of fact recorded by the trial court and first appellate court that Azhagiri Pillai (third defendant), did not acquire title by adverse possession, did not call for interference. (ii) The assignment of mortgage by the mortgagee under deed dated 12.2.1954 did not amount to acknowledgement for extending limitation for filing a suit for redemption. (iii) The mortgage was executed on 7.9.1935. The period of limitation for a suit for redemption was 30 years under Article 61(a) of the Limitation Act, 1963, while the period of limitation was 60 years under the corresponding Article 148 of the Limitation Act, 1908. Where the period of limitation under the new Act was shorter, having regard to Section 30 of the new Act, the suit ought to have been filed within 7 years from the date of commencement of the said Act. The new Act came into force on 1.1.1964. Therefore, the last date for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Court in Jayasingh D. Mhoprekar v. Krishna B. Patil AIR1985SC1646 observed: It is well-settled that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee who has entered into possession of the mortgaged property under a mortgage will have to give up possession of the property when the suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground. This flows from the legal principle which is applicable to all mortgages, namely, Once a mortgage, always a mortgage . 11. Article 148 of the Limitation Act, 1908 (referred to as 'old Act') provided a limitation of 60 years for a suit against a mortgagee, to redeem or to recover possession of immovable property mortgaged. The corresponding provision in the Limitation Act, 1963 ('new Act' or 'Limitation Act' for short), is Article 61(a) which provides that the period of limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledgement that the mortgagee thought and believed that he was liable for the property being 'redeemed' from him by the mortgagor as on the date of that statement. The other view was that, to constitute an acknowledgement, the statement must be an admission by the mortgagee of the jural relationship in relation to the liability or the right or the property claimed and that such a statement must be shown to have been made with a consciousness and an intention of admitting such a right or liability. The controversy has now been set at rest by the decisions of this Court. 14. In Shapur Fredoom Mazda v. Durga Prosad Chamaria [1962]1SCR140 , this Court explained the essentials of an acknowledgement by considering the scope of Section 19 of the old Act: ...acknowledgement as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgement of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgement is based must relate to a present subsisting liability though the exact nature or the specific character ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said mortgages with the intention of admitting his jural relationship with his mortgagors and, therefore, of his subsisting liability as the mortgagee thereunder of being redeemed. The principles laid down in S.F. MAZDA (supra) and TILAK RAM (supra) were reiterated in Lakhmi Ratan Cotton Mills Co. Ltd. v. The Aluminium Corporation of India Ltd. [1971]2SCR623 . 16. This Court had occasion to consider the question again in Reet Mohinder Singh Sekhon v. Mohinder Parkash [1989]3SCR610 . In that case, the suit property was mortgaged on 22.5.1886 and the mortgagee sold his mortgage rights under a Sale Deed dated 1.11.1913 which contained the following recitals:- Now I of my own accord have sold all my mortgagee rights along with the original mortgage consideration and interest which according to the terms of the aforesaid mortgage deed has accrued and is payable to the instant vendor.... The rights and interest regarding recovery of original mortgage money and interest according to mortgage deeds executed by Jangi Khan original mortgagor deceased and redemption of the mortgaged land which hence to for vested in the instant vendor stand vested in the purchaser.... The successors-in-inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the document as a mere narration of the previous mortgage that had been created on the property. The words spell out a clear intention that the moneys due under the mortgage still remained unpaid and also that the mortgagor had a subsisting right of redemption which he could enforce against the mortgagee. In this view of the matter the contention on behalf of the appellant that the recitals in the document of November 1, 1913 constituted an acknowledgement of liability for redemption within the meaning of Section 19 of the Limitation Act deserves to be accepted. 17. The said principles relating to Section 19 of the old Act fully apply to 'acknowledgements' under Section 18 of the new Act. To summarise, a statement (in writing and signed) by a mortgagee can be construed as an 'acknowledgement' under Section 18 of the Limitation Act, if it fulfils the following requirements: (i) The acknowledgement of liability must relate to a subsisting mortgage. (ii) The acknowledgement need not be in a document addressed to the mortgagor (person entitled to the property or right). But it should be made by the mortgagee (the person under liability). (iii) The words used in the ack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits the existence of the mortgage or his rights under the mortgage, he admits all legal incidents of the mortgage including rights and obligations of both parties, that is mortgagee and mortgagor. 19. It is contended by the counsel for the respondents that the statement by the mortgagee in the deed of assignment, that the assignee will be entitled to receive the amount under the original mortgage, is only an assurance made by a creditor to his assignee about the assignee's rights in respect of the mortgage assigned to him, and such a statement cannot be said to be an admission of jural relationship with the mortgagor. It is pointed out that the earlier view, that when a mortgagee sells or assigns his mortgage rights, the very fact that he was selling or assigning his rights was a clear acknowledgement of a subsisting mortgage and of his subsisting rights as a mortgagee, is no longer valid. It also pointed out that in TILAK RAM (supra), this Court clarified that the act of assignment/transfer/sale of the mortgage rights, by the mortgagee, by itself will not amount to an acknowledgement, if the document merely described the status of the mortgagee or described the right that was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsisting liability as mortgagee of being redeemed. But the position will be different, if the assignment deed further stated: The said mortgage is subsisting or The rights and obligations under the said mortgage are enforceable , or The assignee is entitled to all benefits under the said mortgage , or The assignee is entitled to receive the amount advanced under the said mortgage , or The assignee is entitled to all rights and liable for all obligations under the said mortgage , or The assignee is entitled to continue in possession until the mortgage is redeemed . The use of any such words (which are illustrative and not exhaustive) would show an intention to admit the jural relationship, and therefore, amount to acknowledgement, though they may not refer to the mortgagor's right of redemption. Ultimately, it is not the form of the words, but the intention to admit the jural relationship with the mortgagor, that will determine whether a statement is an acknowledgement. 22. In this case, the operative portion of the deed of assignment dated 12.2.1954 (Ex.A-3) states that in consideration of having received ₹ 300/-, the mortgagee (Krishna Pillai) was assigning the mortgage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed by the plaintiffs with reference to the Debt Relief Act. 26. On the other hand, the first Appellate Court held that the mortgage was subsisting on the date when the Debt Relief Act came into force and therefore, the mortgage debt got discharged under Section 9 of the Debt Relief Act with effect from 14.7.1978, and the suit for redemption for redemption was not barred. The High Court in second appeal held that the deed of assignment dated 12.2.1954 did not amount to an acknowledgement and consequently, the limitation for a suit for redemption of the mortgage expired on 1.1.1971 having regard to the provisions of Section 30 read with Article 61(a) of the Limitation Act. It also held that as the mortgage was not subsisting when the Debt Relief Act came into force on 15.12.1978, the question of mortgage getting discharged under Section 9 of the Debt Relief Act did not arise. 27. While dealing with the first question, we have held that the period of limitation for the suit for redemption had to be reckoned from 12.2.1954 and not from 7.9.1935. Therefore, when the Debt Relief Act, came into force on 15.7.1978, the mortgage was very much subsisting. Section 9 of the Debt Relief Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt. There is, therefore, no question of accounting either of the amounts due by the mortgagor to the mortgagee or of any accounting of over-payments or for refund of any over- payments by the mortgagee. In the suit, plaintiffs only sought rendition of accounts but did not claim mesne profits nor paid any court fee in regard to past mesne profits. Plaintiffs cannot, under the guise of a claim for accounts, seek a decree for mesne profits. After obtaining possession, it is open to them to sue for such mesne profits as is permissible in law. 30. This takes us to the application filed by the third defendant before the High Court for amendment of the description of the property. The third defendant contended that the description of the property in the plaint schedule was not in accordance with the mortgage deed dated 7.5.1935, but referred to a larger area with reference to the deed of settlement executed by Thukkaram and Yasodhabai Ammal in favour of the first plaintiff on 24.8.1981 (Ex. A-2). The relief of redemption can be only in regard to the property mortgaged under the deed of mortgage and not in regard to any other property. Therefore, the decree has to be amended so as to br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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