IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN TUESDAY, THE 6TH APRIL 2010 / 16TH CHAITHRA 1932 SA.No. 717 of 1998(B) ----------------------------- AS.124/1993 of II ADDL. DISTRICT COURT, KOLLAM OS.225/1989 of MUNSIFF COURT, KARUNAGAPPALLY .................... APPELLANT(S): APPELLANTS 3 TO 10/LEGAL/HEIRS OF DEFENDANT NO.1 -------------------------- 1. KANAKAMMA, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 2. MURUKESAN, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 3. REGHU, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 4. AMMINI, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 5. SUDARSANAN, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 6. SUDARMA, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 7. VASANTHA, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. 8. UTHAMMAN, CHANIAYYATHU VEEDU, AZHIKKALTHURA, ALAPPADU VILLAGE. BY ADV. MR.BECHU KURIAN THOMAS RESPONDENT(S): RESPONDENT, APPELLANT 2ND PLAINTIFF DEFENDANT 2 TO 4 -------------------------- 1. B.BANERJEE BABU, THUNDATHIL VEEDU, KANDALLOOR THEKKUMMURI, ARATTUPUZHA VILLAGE, FROM RAMAMANGALATHU AZHEEKALTHURA MURI, PUTHUPALLY VILLAGE. S.A. NO.717/1998 2. B.MOHANDAS, THUNDATHIL VEEDU, KANDALLOOR THEKKUMMURI, ARATTUPUZHA VILLAGE, PUTHUPPALLY VILLAGE, 3. BABY, THUNDATHIL VEEDU , KANDALLOOR THEKKUMMURI, ARATTUPUZHA VILLAGE FROM RAMAMANGALATHU AZHEEKKALTHURA MURI, PUTHUPPALLY VILLAGE, 4. THANKAKUTTY, THUNDATHIL VEEDU, KANDALLOOR THEKKUMMURI, ARATTUPUZHA VILLAGE FROM RAMAMANGALATHU, AZHEEKKALTHURA MURI, PUTHUPPALLY VILLAGE. 5. M.SUGATHAN, SARADA MANDIRATHIL, VAZHUTHAKKADU, TRIVANDRUM FROM KALLEESWARAN, MEENATHU, AZHEEKALTHURA, ALAPPAD VILLAGE. 6. PUSHPAVALLY, CHANIYATHUVEEDU, AZHAIKULTHURA, ALAPPADU VILLAGE. R1 TO R5 BY ADV. MR.C.ANIL KUMAR MR.P.R.VENKETESH THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 09/03/2010, THE COURT ON 06/04/2010 DAY DELIVERED THE FOLLOWING: P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - S.A. No. 717 of 1998 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of April, 2010. JUDGMENT The defendants who suffered a decree for redemption are the appellants. The parties and facts are hereinafter referred to as they are arrayed before the court below. 2. Since the solitary question raised is regarding limitation, the facts absolutely necessary for the disposal of this Second Appeal are being referred to. 3. The suit was one for redemption. It is not in dispute that by Annexure A2 document dated 8.2.1958 the property involved in the suit was mortgaged to the predecessor in interest of the defendants. Later a purakkadam deed dated 9.4.1962 was also executed. These facts are not disputed. The suit was laid for redemption. Originally the defendants entered appearance and filed a written statement raising several S.A. 717/1998. 2 contentions. The main contention was one pertaining to limitation. 4. Before the court below, issues were raised and evidence was adduced. P.W.1 was examined on the side of the plaintiffs and marked Exts.A1 to A3. The defendants had D.Ws. 1 and 2 examined and Exts. B1 to B1(f) marked. The trial court found all the issues in favour of the plaintiffs and passed a preliminary decree for redemption. The appellate court confirmed the same. 5. The young learned counsel appearing for the appellants, in his well prepared and well presented argument, raised only one question for consideration, that is, the suit was barred by limitation and the findings of the court below that it is not so is not legally sustainable. According to learned counsel, both the courts have erred in law in coming to the conclusion that the period of limitation could be computed from the date of Ext.A3 dated 9.4.1962, which is the purakkadom deed. Learned counsel emphasized that that was a document executed by the S.A. 717/1998. 3 mortgagor and that could not save the limitation in the suit for redemption as far as the mortgagor is concerned. Going by Section 18 of the Limitation Act, according to learned counsel, it was the mortgagee who had to acknowledge the debt. It was not the mortgagor who had to acknowledge. This vital aspect, according to learned counsel, has been omitted to be noticed and that has resulted in the illegal findings. 6. As already noticed, the sole question is one regarding limitation. Both the courts have concurrently found that if the period is to be computed from the date of Ext.A2, ie., 8.2.1958, the suit is clearly barred by limitation. If on the other hand Ext.A3 dated 9.4.1962 is treated as an acknowledgment of the debt covered by Ext.A2, the plea in the suit is within time. The question is whether the courts below were justified in their approach to the question of limitation. In the plaint it is specifically averred that the plaintiffs are entitled to compute 30 years period from 9.4.1962, which is the date of execution of Ext.A3 S.A. 717/1998. 4 purakkadam deed. It is therefore contended that the suit is not barred by limitation. This is reiterated by P.W.1 in his evidence, which reads as follows: 7. Going by Article 61(a) of the Limitation Act the period of limitation is 30 years from the date on which right to redeem or to recover possession accrues. If as a matter of fact the period is to be computed from the date of Ext.A3, that is, 9.4.1962, then even according to learned counsel for the appellants, the suit is within time. However learned counsel, as already stated, placed emphasize on Section 18 of the Limitation Act and also the decisions reported in Mohammad Khan v. Mohammad Salim Khan (AIR 1951 S.A. 717/1998. 5 Allahabad 392) and Prabhakaran v. M. Azhagiri Pillai (AIR 2006 SC 1567) and contended that the mortgagor cannot take the aid of Ext.A3 to have the period extended. 8. Sections 18 and 19 of the Limitation Act deal with acknowledgment. Sections 18 and 19 read as follows: “18. Effect of acknowledgment in writing.- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872, oral evidence of its contents shall not be received. Explanation.- for the purposes of this section,- S.A. 717/1998. 6 (a)an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word “signed” means signed either personally or by an agent duly authorised in this behalf; and © an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right. 19. Effect of payment on account of debt or of interest on legacy.- Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made: S.A. 717/1998. 7 Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment. Explanation.- for the purposes of this section,- (a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment; (b) “debt” does not include money payable under a decree or order of a Court.” 9. In the case on hand, there is no contention for the plaintiffs that any payment has been made by the mortgagee to the mortgagor so as to come within the ambit of Section 19 of the Act. Then the question is regarding the application of Section 18 of the Act. To attract Section 18 of the Act, the following ingredients will have to be satisfied (i) an admission or acknowledgment, (ii) that such acknowledgment must be in respect of a liability in respect of a property or right, (iii) that it must be made before the S.A. 717/1998. 8 expiry of the period of limitation and (iv) that it should be in writing and signed by the party against whom the said property or right is claimed. 10. Acknowledgment is an admission of the truth of one's liability. It may either by in terms of Section 18 or Section 19 of the Limitation Act. It has been held that Section 18 must be construed liberally. It does not require that an acknowledgment should be in any particular form or to be express. It is well settled that each case regarding acknowledgment saving limitation must be considered independently in the light of the words used in the circumstances. 11. The principle behind the provision is that if a right or claim has not been exercised or asserted for a long time, a presumption of cessation of right would naturally arise. It is also well settled that an acknowledgment does not constitute a new contract or provide a new cause of action. While in the case of Section 18, an acknowledgment in writing is an essential ingredient, in the case of Section S.A. 717/1998. 9 19, it is part payment along with the acknowledgment in writing. An acknowledgment indicates that the person making it had some interest, which can be bound by the acknowledgment. An acknowledgment keeps alive the original cause of action of suit. An acknowledgment of a liability merely extends the period of limitation and does not create a new cause of action. It in fact renews the debt. It does not give rise to a new cause of action. 12. Coming back to Section 18, the fourth ingredient already mentioned is of considerable importance in the present case. The acknowledgment must be by that person against whom the liability is sought to be enforced. In the case on hand, the mortgagor seeks to enforce the right of redemption against the mortgagee. Therefore naturally the acknowledgment will have to be by the mortgagee on whom the liability of redemption is fastened. 13. Neither in Ext.A2 nor in Ext.A3 the mortgagee has acknowledged any liability. Both these documents are executed by the mortgagors themselves. S.A. 717/1998. 10 14. On principle a person cannot be allowed to have an extended time for enforcement of his right as against another based on the strength of his own acknowledgment of liability. Therefore the mortgagor's admission of execution of a mortgage deed may give a fresh period of limitation to the mortgagee regarding the period of foreclosure. But the mortgagor cannot have in turn claim the benefit of the same starting point so far as the suit for redemption is concerned. It is also well established by now that acknowledgment in a subsequent mortgage by the mortgagor cannot give a fresh period of limitation for redemption. 15. In the decision reported in Mohammad Khan v. Mohammad Salim Khan (AIR 1951 Allahabad 392) relied on by the learned counsel for the appellant it was held as follows: “Limitation Act, that gives a fresh start for the period of limitation must be by the person, against whom the liability is sought to be enforced.” S.A. 717/1998. 11 16. In the decision reported in Kutty Kochu v. Raman (AIR 1953 Tra-Co. 244) the same issue has been considered. That too was a suit for redemption of mortgage. The property which belonged to Parasseri tarwad was mortgaged to one Narayani perumal as per Ext. E dated 10.11.1053. She assigned her mortgage right to the tarwad of the defendants. By virtue of a decree for partition in the tarwad of the defendants, the mortgage right devolved on the defendants. The plaintiff as purchaser of the equity of redemption from a member of the Parasseri tarwad to whom the property was alloted under a partition in that tarwad brought the suit for redemption of mortgage. The plea of limitation was raised. The trial court relied on the assignment of mortgage dated 4.1.1066 and 29.9.1104 held that the suit is within time. When the issue was taken to this court, it was held as follows: “The question then is whether Exts.F and D constitute valid acknowledgments under S.19 Limitation Act. The learned Judge things that the expressions used in these documents are merely S.A. 717/1998. 12 descriptive and do not 'per se' import any liability to be redeemed. Ext.F is an assignment of 1066 of Ext. E mortgage right by Narayani Perumal the mortgagee to Irayimman Parameswaran the Karanavan of the defendants tarawad. In Ext.F Narayani Perumal stated that she was holding the property as a mortgagee from kali Narayani of Parasseri tarwad and that she was assigning that mortgage right to Erayimman Parameswaran for the consideration recited in the document. It is thus clear from Ext.F that the mortgagee acknowledged in express terms a subsisting mortgage right which clearly imported a liability to be redeemed. We have no doubt that this is sufficient to constitute a valid acknowledgment. The decisions reported in 'Mathevan Padmanabhan v. Easwara Pillai Krishna Pillai' 27 Trav LJ 961 (A) and - 'Sidhari Ra, v. Gargi Din', AIR 924 All 458 (B) are exactly in point. In both the cases it was held that a deed of assignment by the mortgagee of an existing mortgage right constituted a valid acknowledgment to save limitation. We are therefore clear that Ext. F amounts to a valid acknowledgment that gives a fresh starting point of limitation to the S.A. 717/1998. 13 mortgagor.” 17. In the decision reported in Neelakanta v. Parvathi (AIR 1955 Tra.-Co. 374) Section 19 of the Limitation Act, 1908 corresponding to Section 18 was considered. In the said case two sub mortgages were relied on to save the period of limitation. It was held that those documents does not refer to the mortgage in question and also does not acknowledge the subsisting liability of redemption. 18. The issue was also dealt with in the decision reported in Sankara Pillai v. Ananda Pillai (AIR 1958 Kerala 307). In the said decision it was held as follows: “....In another case reported in the same volume at page 210 Manes v. Padmanabhan, 8 Trav LJ 210 (B) the was an acknowledgment that the property dealt with was held by the executant under a mortgage of 1988 and the acknowledgment of that subsisting mortgage right made by the mortgagee was held to imply an acknowledgment of the liability to be redeemed as well as an acknowledgment of the mortgagor's S.A. 717/1998. 14 right to redeem. We therefore hold, along with the court below, that there was sufficient acknowledgment in law by the branch of defendants 6 to 15 of the mortgage of 1001 and their position at date of suit could be assimilated to that of a mortgagee only of the items concerned.” 19. One may now refer to the decision reported in Reet Mohinder Singh Sekhon v. Mohinder Parkash (AIR 1989 SC 1775). An identical question was considered in the said decision. The suit in that case was one for redemption. The mortgage deed was of the year 1886. In normal course, the suit has to be brought before 22.5.1946 the limitation being 60 years. However the suit was filed only on 28.12.1968. The plea of limitation was got over by raising a plea that her son on 1.11.1913 had specifically acknowledged the right of the mortgagor to redeem the property. It was therefore claimed that the said acknowledgment constituted a fresh starting point for computing the period of limitation. The question was posed S.A. 717/1998. 15 for consideration in paragraph 5 of that decision. In the said decision, it was held as follows: “We are of the opinion that the High Court erred in accepting the above contention. It is true, as pointed out in Tilak Ram v, Nathu, that the period of limitation cannot be extended by a mere passing recital regarding the factum of the mortgage but that the statement on which the plea of an acknowledgment is based must relate to a subsisting liability. The words used must indicate the jural relationship between the parties and it must appear that such a statement is made with the intention of admitting such jural relationship. But, in our opinion, the recitals in the sale deed on 1.11.1913 fulfil the above requirements. The fact of Nanak Chand having obtained a mortgage with possession had already been recited in an earlier part of the sale deed. The passages in the sale deed, which have been extracted by us above, contain two specific recitals. The first is that “the original consideration and interest under had accrued and was payable to the instant vendor”. these words acknowledge that the mortgage had not been S.A. 717/1998. 16 redeemed and that the mortgage moneys remained outstanding to the mortgagee from the mortgagor as on the date of the sale deed. The second recital is even more specific. It says that what stands transferred to the purchaser is not only the right of the mortgagee for recovering the principal amounts and interest according to the mortgage deed (which, as earlier stated, still remained outstanding) but also “the rights and interest” regarding the redemption of the mortgaged land. These words are, of course, a little inappropriate because the right of redemption is in the mortgagor and not in the mortgagee. But, read as a whole, the second sentence we have quoted here from the sale deed clearly manifests as intention on the part of the mortgagee to acknowledge that his right to recover the moneys under the mortgage deed as well as his liability to have the property redeemed by the mortgagor in the event of his paying off the moneys due under the instrument both stand vested in the purchaser. We are of the opinion that it is not correct to treat the recitals in the document as a mere narration of the previous mortgage that had been created on the property. S.A. 717/1998. 17 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 1.11.1913 constituted an acknowledgment of liability for redemption within the meaning of 19 of the Limitation Act deserved to be accepted.” 20. In the decision reported in Bibijan v. Murlidhar ((1995) 1 SCC 187 it was observed as follows: “The High Court in Second Appeal, held that the mortgagee acknowledged the mortgage and that, therefore, limitation starts running from the date of the acknowledgment by the respondents' predecessors-in-interest which would give fresh cause of action for filing a suit for redemption and possession. Indisputably, the gift deed executed by the donor in favour of the respondent-donee clearly mentioned the mortgage and made a part of the deed of gift. Thus, the finding of the High Court that the recitals in the gift deed constitute acknowledgment is perfectly legal. Accordingly, S.A. 717/1998. 18 the finding that the suit was within limitation, is unassailable. Thereby, a preliminary decree for redemption was granted giving appropriate time to the mortgagor to deposit the amount in the Court by decree dated 29.4.1979.” Though the principle was accepted, the appeal failed on other grounds. 21. In fact the issue as to acknowledgment under Section 18 was considered extensively in the decision reported in Prabhakaran v. M. Azhagiripillai (AIR 2006 SC 1567). The ingredients necessary to attract Section 18 was laid down as follows: “Article 148 of the Limitation Act, 1908 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 is Article 61(a) which provides that the period of limitation for a suit by a mortgagor to redeem or recover possession of the immovable property mortgaged is 30 years. The period of limitation begins to run when the right to redeem S.A. 717/1998. 19 or to recover possession accrues in the case of a usufructuary mortgage which does not fix any date for repayment of the mortgage money, but merely stipulates that the mortgagee is entitled to be in possession till redemption, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of the mortgage. Section 27 of the Limitation Act provides that “at the determination of the period hereby limited to any person for instituting a suit for possession of any property his right to such property shall be extinguished.” This would mean that on the expiry of the period of limitation prescribed under the Act, the mortgagor would lose his right to redeem and the mortgagee would become entitled to continue in possession as the full owner. When the said deed of assignment was executed on 12.2.1954, the mortgage dated 7.9.1935 was subsisting, as the period of limitation at that time, was 60 years. In view of the admission of jural relationship contained in the assignment deed, operating as an acknowledgment of liability, a fresh period of limitation started from 12.2.1954. When the suit S.A. 717/1998. 20 was filed on 16.11.1981, the new Limitation Act was in force under 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.” 22. The decision reported in Reet Mohinder Singh Sekhon's Case was referred to in this decision and the principle laid down therein was accepted. In paragraph 17 it was observed as follows: “The said principle relating to Section 19 of the old Act fully apply to 'acknowledgments' under section 18 of the new Act. To summarise, a statement (in writing and signed) by a mortgagee can be construed as an “acknowledgment' under Section 18 of the Limitation Act, if it fulfils the following requirements: (i) The acknowledgment of liability must relate to a subsisting mortgage. (ii) The acknowledgment need not be in a document addressed to the mortgagor (person entitled to the property of right). But it should be made by the mortgagee (the person under liability). S.A. 717/1998. 21 (iii) The words used in the acknowledgment must indicate the existence of jural relationship between the parties and it must appear that the statement is made by the mortgagee with the intention of admitting the jural relationship with the mortgagor. (Such intention of admitting the jural relationship need not be in express terms, but an be inferred to implied from the nature of admission and the words used, though oral evidence as to the meaning and intent of such words is excluded). (iv) Where the statement by the mortgagee in the subsequent document (say, deed of assignment) merely refers to the mortgage in his favour which is being assigned, without the intention of admitting the jural relationship with the mortgagor, it will not be considered to be an 'acknowledgment'. In paragraph 18 it was observed as follows: “There is no difficulty in holding a statement to be an 'acknowledgment' under section 18, where the mortgagee makes a direct admission that he is liable to deliver back possession to the mortgagor or