Appeals Nos 104 to 107 of 1961
Appeals from the judgment and order dated July 5 1956 of the Madras High Court in Appeal against order No 480 454 478 and 479 of 1954 respectively
AV Viswanatha Sastri and R Gopalakrishnan for the appellant
KN Rajagopal Sastri and M section Narasimhan for respondent No 1 1963
March 7
The judgment of the Court was delivered by MUDHOLKAR J
This appeal and civil appeals Nos 104 106 and 107 of 1961 arise out of execution proceedings in four different suits but as they involve a common question they were heard together by the High Court and by us
That ques tion is whether the execution applications out of which these appeals arise are within time
We propose to treat C A No 105 of 1961 as a typical case
The relevant facts thereof are briefly these  In O section 46 of 1943 one Ramanathan Chettiar instituted a suit against one Venkatachalam Chettiar in the court of the Subordinate Judge of Devakottai for the recovery of a sum of Rs 10285 due on promisory note dated November 20 1942 with interest thereon
He eventually obtained a decree for the full claim
In so far as the second defendant 244 is concerned he was made liable for the decrctal amount to the extent of this interest in the joint 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 bad 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
The fourth trustee was an outsider
The total indebtedness of the defendants as ascertained on the date on which the composition was effected was Rs 21607748 but it was reduced under the arrangement to Rs 86430 13 3
There are four schedules to the composition deed
Schedule A sets out the names of the creditors and the amounts due to them Schedule B sets out the properties of the defendants and Schedules C and D set out the properties at Leiwo and Meola respectively in Burma
The deed provides for the payment of the reduced amount by the trustees to different creditors from the income of the properties or by sale or mortgage of those properties within four 245 years from April 14 1947
The deed further provides for the extension of this time limit according to exigencies and necessity at the discretion of the first two trustees ie the first defendant and the appellant Chidambaram Chettiar
The arrangement also provides for payment of interest at 5 annas per mensem in respect of the amounts due on the decrees and 4 annas per mensem in respect of other outstandings as from April 14 1947
The composition contemplated the realisation of the dues of the creditors from the income or sale or mortgage of the Burma property in the first instance
Clause to which deals with this matter runs as follow In case the properties of Burma firm are not sufficient to pay the amounts set apart as payable to the creditors at 40 per cent the individuals Nos 1 and 2 Trustees shall sell the properties in British India and set out in the B schedule herein and from out of the sale proceeds distribute the amount to the creditors
Similarly after the 40 per cent amounts have been paid and if there should be any amount of deficiency for the payment of the 60 per cent amount payable to Krishnappa Chettiar as described in para 6 supra even for that also the individual Nos 1 and 2 Trustees shall sell the aforesaid British India properties and pay the aforesaid Krishnappa Chettiar the entire balance amount
 The composition deed contains various other terms out of which it would be relevant to set out only the following two  Clause 8  Until 40 per cent of the amount is paid to the creditors as aforesaid the said Trustees shall at the time of disbursement of the dividend pay from the 1st Chitirai of the year Sarvajith for the annual expenses of the 246 family a sum of Rs 600 per annum to indivi dual No 4 Trustees Venkatachalam Chettiar and a sum of Rs 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 Venkata chalam 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
 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
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 was that the execution applications were barred by time
In O section No 46 of 1943 the last execution application was dismissed on September 19 1946 E P No 109 of 1946
No execution petition was filed thereafter till the present petition E P No 117 of 1952
This was filed on June 13 1952
Similarly in the remaining three appeals also execu
tion applications with which we are concerned were filed more than three years after the dismissal of the previous execution applications
It may be mentioned that originally the appellant as well as appellants in the other appeals had sought the execution of their 247 respective decrees for the fall amount
But they amended their petitions later on pursuant to the orders of the court and restricted their claims to 40 per cent of the amounts due under their decrees
The appellant Chidambaram filed an affidavit along with the execution petition and set out the following grounds in support of his contention that the execution application was within time
The trustees were able to realise some of the assets of the defendants in Burma and to pay a dividend of 10 per cent to the creditors
I was paid a sum of Rs 562 4 0 by way of dividend for this decree on August 10 1949
As the rest of the Burma assets of the defendant could not be realised by the trustees on account of the civil war in Burma and the land legislations passed there and as there was no prospect of their being realised in the near future myself and A section K Krishnappa Chettiar aforesaid as managing trustees under the said composition offered to extend the period of management by one year provided the defendants would consent to their Indian assets being realised and distributed among the creditors
But the defendants were not willing thereto and hence we thought fit to extend the period of our management
We have filed a petition in I A No 87 of 1951 in the suit I P No 1 of 1945 to have the said composition scheme set aside and the 1st defendant re adjudged as insolvent
The said petition is pending
I am advised that as the said composition arrangement has failed on account of the assets of the defendants not being realised and the debts discharged within the four year period mentioned therein I am in law and in equity entitled to recover the entire amount due to me under this decree by executing it
248 8
The said composition provides for a maintenance allowance of Rs 600 and Rs 30 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 section 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 Rs 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
Similar grounds were set out in the affidavits filed by the other appellants also
It may be mentioned that in each of the excution applications relief was claimed only against the second defendant because in insolvency petition No 87 of 1951 filed by some of the creditors the first defendant was readjudicated an insolvent by the court on August 3 1954
The execution application was as already stated opposed by the second defendant firstly on the ground that the composi tion arrived at between him and his father on the one hand and the creditors on the other was still in force that the arrangement was irrevocable and operated as a complete discharge of the liability of the defendants for all time
The second ground was that the execution application was barred by time
249 The precise pleas of the second defendant regarding limitation were as follows  a that the adjudication of his father as an insolvent and the pendency of insolvency proceedings against him would not affect limitation in so far as he was concerned b that the receipt by the appellant and other creditors of certain amounts as dividends in August 1949 would not extend the period of limitation for execution proceedings c that the acknowledgment relied upon is  wholly wrong misconceived and untenable
 According to him there was no acknowledgement of liability of any kind in the notice referred to in the affidavit much less the liability of the second defendant to discharge the decree which had in fact become extinguished and effaced by reason of the composition arrived at on September 9 1946
In the course of the arguments before the executing court it was urged on behalf of the appellants in those appeals that the four years within which the trustees were required to realise the Burma properties and pay off the debts of the creditors must be regarded as a period during which the execution of the decrees was stayed and that consequently on the principles underlying section 15 of the Indian Limitation Act 1908 that period should be deducted from computing the period of limitation for preferring execution applications
The Subordinate judge before whom the execution applica tions were filed upheld this contention and held that the execution applications were within time
He also held that the execution applications arrived at between the parties operated as an adjustment 250 of the decree on the date on which that composition was effected or from the date on which the adjudication was arrived at and that though the composition could not be certified to the executing court under 0
XXI r 2 C P C within the time permitted by law it 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 ex cuting 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
Mr Viswanatha Sastri who appears for the appellants in these appeals has raised only two contentions
The first is that the principle underlying section 15 1 of the Limitation Act is applicable to a case of this kind and that therefore the execution applications are within time
The second is that at any rate the letter dated April 19 1949 written by the second defendant to the trustees operates as an acknowledgment of liability under section 19 of the Limitation Act and therefore saves the limitation in respect of all the execution applications except the one out of which C A No 104 of 1961 arises
According to Mr Sastri the composition of a decretal debt does not amount to an adjustment or satisfaction of a decree until the acts required to be 251 done thereunder have been performed
Here the composition scheme required payment of 40 per cent of the decretal debts by the trustees to the craditors
According to him until that condition was fulfilled the original decree cannot be said to have been satisfied
Since the decrees herein involved could not be regarded as having been satisfied they are still alive
Then according to Mr Sastri where a composition scheme prescribes the period during which a condition has to be performed till the expiry of theperiod or performance of the condition the operationof the decrees must be deemed to have been stayed
For during this period it would be incompetent to the decree holders to execute their decrees
Such period could therefore be deducted by applying the principles underlying section 15 1 of the Limitation Act from computing the period of limitation for filing a fresh execution application
He concedes that here the composition scheme not having been certified to the execution court the defendants would not have been able to resist an execution application if made within the period of four years specified in the deed of composition
But the composition being binding on the appellants they would have laid themselves open to suits for damages at the instance of the defendants if they had proceeded to execute their decrees within this period
Section 15 1 of the Limitation Act runs thus  15 1  In computing the period of limi tation prescribed for any suit or application for the execution of a decree the institution or execution of which has been stayed by injunction or order the time of the continuance of the injunction or order the day on which it was issued or made and the day on which it was withdrawn shall be excluded
 It is clear from its terms that it is restricted in its application to a case where the execution of a decree 252 has been stayed by an injunction 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
In support of his contention that the principles underlying section 15 1 are applicable to a case like the present one Mr Sastri has strongly relied on the decision in Govindnaik Gurunathnaik vs Basauannawa Parutappa 1
There Beaumont C J has observed at P 437  Section 15 of the Act recognizes the princi ple 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 referred and which was referred to in the lower Courts is Pulin Chandra Sen vs Amin Mia Muzffar Ahmad 2
 Saying that this decision had stood for some years and had not been dissented from the learned Chief justice observed I would rather base the appellant scase on the ground that the right to appear for a final decree was suspended duringthe period in which the suit was stayed
Sucha principle was applied by the CalcuttaHigh Court 1 ILR 2 AIR 1933 Cal
253 in Lakhan Chunder Sen vs Manhusudan Sen 1 affirmed by the Privy Council in Nrityamoni Dassi vs Lakhan Chandra Sen 2
 It would thus appear that the learned Chief Justice based his decision really on section 14 of the Limitation Act
In both the cases referred to by the learned Chief Justice the provisions of section 14 of the Limitation Act were applied
In Pulin Chandra Sen s case3 the facts were these The next friend of it minor instituted a suit upon a mortgage but died after the preliminary decree was passed
No new next friend was however appointed in his place
The minor made an application for passing a final decree within 3 years after attaining majority but three years after the period of grace fixed by the preliminary decree
The High Court while holding that though the erstwhile minor was not entitled to claim the benefit of section 6 of the Limitation Act held that the execution application must be regarded as within time since it had been made within three years from the date when the right to apply accrued to him on his attaining majority
No doubt this is a case where in effect the court has applied the principles underlying section 6 though it was clearly of opinion that section 6 in terms did not apply
There is no discussion of the point at all and therefore we do not think that this is a decision which needs to be considered
The next two decisions relied on are Badruddin Khan vs Mahvar Khan 4 and Managing Committee Sundar Singh Malha Singh Rajput High School Indora vs Sundar Singh Malha Singh Sanatan Dharma Rajput High School Trust 5
In both these cases the court applied what according to it were the general principles underlying section 15 of the Limitation Act though the facts of these cases do not strictly fail within the purview of that section
The question 11907 1 3A1 R 2 Cal
All Lah
254 is whether there is any 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 riot 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 barred by time on the analogy of a matter which is governed by a particular article For the same reasons the provisions of sections 3 to 28 of Limitation Act cannot be applied to situations which fall outside their purview
These provisions do not adumbrate any general principles of substantive law nor do they confer any substantive rig its on litigants and therefore cannot be permitted to have greater application than what is explicit or implicit in them
Suspension of limitation in circumstances of the kind obtaining in these appeals is neither explicit nor implicit in section 15 upon which reliance is placed on behalf of the appellants
We are therefore unable to accept the first argument of Mr Sastri
Coming to the second argument of Mr Sastri it would be useful to reproduce the relevant portion 255 of the letter dated April 19 1949 on which reliance is placed  The properties of our client s family and his father Venkatachalam Chettiar s share of properties have vested in you in the capacity of Trustees as per the composition scheme of arrangement effected on September 9 1946 and you are managing the same and you have to pay Rs 300 per annum to our client from 1st Chitrai of Sarvajit year April 14 1947 for his family expenses as provided in the scheme of composition and you have paid Rs 300 and for the year Sarvajit and have obtained a receipt therefor from my client
You have not paid the sum of Rs 300 due for the year Sarwadhari to our client though he demanded you many times
As it is learnt that individual No 2 out of you are raising non maintainable objections and the sum of Rs 300 due for the year Virodhi still remains to be paid I have been given instructions to demand the total amount of Rs 600 payable for the aforesaid years
So you should pay the amount to my client and obtain a receipt therefore within one week after the receipt of this notice
Further you have till now collected Rs 17500 as per the scheme of arrangement and though you have received the amount long time ago you have not paid to the creditors their dividend amounts you are bound by law and equity to pay interest to the aforesaid amounts You are hereby informed that as you have not paid to the creditors the dividend amounts my client is put to a heavy loss and that you are bound to bear all the losses that may be caused thereby and make good the losses  you should immediately pay off the creditors the dividends and in default my client will have to launch 256 proceedings against you and seek reliefs through Court
 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 vs Durga Prosad Chamria 1 he says that the essential requirement for sustaining a plea of acknowledgment under section 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 intended either expressly or implied to admit that jural relationship
Where such jural relationship is admitted expressly or impliedly he contends that the mere fact that the precise nature of the liability is not mentioned would not prevent the acknowledgment from falling within section 19
That was a case in which the mortgagor had written to his creditor a letter to the following effect My dear Durgaprosad
Chandni Bazar is again advertised for sale on Friday the 11th inst
I am afraid it will go very cheap
I had a private offer of Rs 275000 a few days ago but as soon as they heard it was advertised by the Registrar they withdrew
As you are interested why do you not take up the whole
There is only 1 1962 1 SCR 140
257 about 70000 due to the mortgagee a payment of 10000 will stop the sale
Yours sincerely Sd J C Galstaun
 The q qestion to be considered was whether this amounted to an acknowledgment of the mortgagee s right
This Court held that it did amount to an acknowledgment and observed thus  It is thus clear that acknowledgment as prescribed by section 19 merely renews debt it does not create a new right of action
It is a mere acknowledgment 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 acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words
Words used in the acknowledgment must however indicate the existence of jural relationship between the parties such as that of debtor and creditor and it must appear that the statement is made with the intention to admit such jural relationship
Such intention can be inferred by implication from the nature of the admission and need not be expressed in words
If the statement is fairly clear then the intention to admit jural relationship may be implied from it
The admission in question need not be express but must be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement
In construing words used in the statements made in 258 writing on which a plea of acknowledgment rests oral evidence has been expressly excluded but surrounding 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 section 19 and there is really no substantial difference between the parties as to the true legal position in this matter  In our opinion this case is not of assistance co 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 and their respective liabilities were distinct
What the defendant No 2 has referred to is the libility of the Trustees arising under the terms of the deed of composition and could be enforced only against them
To refer to a liability resting on someone else is not to acknowledge one s own liability within the meaning of the word in section 19
The defendant No 2 has not even indirectly referred to the decree much less to the liability arising under any of them
In the circumstances we must hold that this letter does not extend the period of limitation
For these reasons 259 we uphold the decision of the High Court and dismiss each of these appeals with costs
There will however be only one hearing fee
Appeals dismissed


Summary:
The plaintiff Ramanathan Chettiar obtained a decree in O section No 45 of 1943 for the recovery of an amount due on promissory note against one Venkatachalam Chettiar and assigned the decree in favour of the appellant in C A 105 of 1961
The execution application filed 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 in this case agreed to take 40 of the dues
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 appellant in C A No 104 of 1961 and the fourth trustee was an outsider
The deed provided for the payment of the reduced amount by the trustees to different creditors from the income of the properties or by sale or mortgage of those properties within tour years from April 14 1947
Tile deed further provided for the extension of this time limit according to exigencies and necessity it the discretion of the first two trustees i e the first defendant and the appellant Chidambaram Chettiar
The composition contemplated the realisation of the dues of the creditors front the income or sale or mortgage of the Barma property in the first instance
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
Out of the Burma assets very little was realised within the period of four years prescribed in the composition deed and the trustees did not extend the time
242 The appellants therefore sought execution of their decrees against the Indian assets
The last execution application in O section No 46 of 1943 was dismissed on September 19 1946 and no petition was filed thereafter till June 13 1952
Similarly in the other three appeals execution applications were filed more than three years after the dismissal of the previous applications
In each of the execution applications relief was claimed only against the second defendant
The Subordinate Judge before whom the execution applications were filed held that 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 disagreed with the Subordinate Judge and holding that the execution petitions were barred by time allowed the appeals
The main contention of the appellants in this Court was that the principle underlying section 15 1 of the Limitation Act applied to the present case and at any rate the letter written by the second defendant to the trustees operated as an acknowledgment of liability under section 19 of the Limitation Act
Held that section 15 1 of the Limitation Act is restricted in its application to a case where the execution of a decree has been stayed by an injunction or an order
The Limitation Act is a piece of adjective or procedural law and not of substantive law
Rules of Procedure 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
Suspension of Limitation in circumstances of the kind obtaining in these appeals is neither explicit nor implicit in section 15 upon which reliance is placed by the appellants
Govind Naik Gurunathnaik vs Basawannawa Parutappa 1
LR  Pulin Chandra Sen vs Amin Mia Muzaffar Ahmad A IR1933 Cal
508 Lakhan Chunder Sen vs Madhusudan Sen 1907 1
L R  Nrityamoni Dassi vs Lakhan Chandra Sen  1916 1
L R  Badruddin Khan vs Mahyar Khan I L R 1939 All
103 and Managing Committee Sunder Singh Malha Singh Rajput High School Indore vs Sunder Sigh Malha Singh Sanatan Dharma Rajput High School Trust I L R  distinguished
Held further that in the present appeals two different sets of persons the defendants and the Trustees were liable and their respective liablities were distinct
To refer to a liablility resting on some one else was not to acknowledge one s own liability within the meaning of the word in section 19
The defendant No 2 had not even indirectly referred to the 243 decree much less to the liability arising under any of them
In the circumstances it must be held that the letter dated April 19 1949 did not extend the period of limitation
Khan Bahadur Shapoor Freedom Mazda vs Durga Prosad Ckamaria  held inapplicable