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Manikchand Bharmappa and anr. Vs. Rachappa Virsangappa and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 134 of 1948
Judge
Reported inAIR1952Bom226; (1952)54BOMLR85; ILR1952Bom534
ActsLimitation Act, 1908 - Sections 20, 20(1) and 20(2)
AppellantManikchand Bharmappa and anr.
RespondentRachappa Virsangappa and ors.
Appellant AdvocateS.R. Parulekar and ;D.M. Honavar, Advs.
Respondent AdvocateG.R. Madbhavi and ;H.B. Datar, Advs.
Excerpt:
.....of mortgage, to be appropriated by mortgagee towards interest on mortgage--whether receipt of rent part payment within section 20(1).;the expression ' where mortgaged land is in the possession of the mortgagee ' in section 20(2) of the indian limitation act, 1908, does not merely apply to cases where the mortgagee is in possession under a usufructuary mortgage; it applies to all cases where the mortgagee is in possession in his capacity as the mortgagee and under the terms of the mortgage. therefore if the mortgagee is in possession by reason of the mortgage deed and if in that capacity he receives any rent or produce from the mortgaged property, then the receipt of the rent is deemed to be a payment for the purpose of section 20(1) of the act. - - provided these two..........part payment, then limitation was saved in respect of the whole debt secured by the mortgage. the mortgage debt was the principal and the interest and both the principal and the interest were secured. therefore, payment of part of the interest was a part payment of the mortgage debt and the result of the part payment wag that a fresh period of limitation commenced in respect of the whole debt whenever a part payment was made within the meaning of section 20 (2). therefore, we are unable to agree with the learned judge below that the mortgagee is entitled only to recover interest within 12 years of the date of the filing of the suit. in our opinion the whole of the plaintiff's claim under the first mortgage is within time and the whole claim consists of principal and of the interest.....
Judgment:

Chagla, C.J.

[1] This is an appeal from a judgment of the Civil Judge, Senior Division Belgaum, by which he decreed the plaintiffs' suit on two mortgages to a certain extent and it is the plaintiffs who have come in appeal before us contending that they wore entitled to the full claim comprised is their auit.

[2] One Veerappa and Gurshiddappa mortgaged to plaintiffs' father on 7-2-1917, a shop to secure a debt for Rs. 4,500. The period of the mortgage was fixed at five years and there was a provision for sale of the property in the event of the mortgage amount not being paid within the stipulated period. It was further provided in this mortgage that the mortgagee was to be in possession of the shop, that he was to recover the rent of Rs. 300 of the shop and appropriate it towards the interest fixed on the mortgage. The interest was fixed at 9 per cent, Therefore, in this mortgage there was provision with regard to the payment of interest to the extent of Rs. 300. That left a balance of Rs. 105 payable by the mortgagor under the mortgage.

On 23-1-1925, another document was executed by the two mortgagors in favour of the plaintiffs father, and by that document the two mortgagors gave an additional charge to the mortgages is respect of a further advance of Rs. 4000. The document describes the mortgage as a possessory mortgage and it emphasises the fact that the possession of the mortgaged property was already with the mortgagee. The rate of interest is the same as under the earlier document, viz. 9 per cent. The plaintiffs filed the suit to enforce thesetwo mortgages and they claimed in the suit Rs. 4,500 and Rs. 4,000 for principal under the two mortgages, in all Rs. 8,500, and they also claimed interest in the sum of Rs. 8,500 on the principle of dam dupat. There were some other claims with which we are not concerned in thia appeal. The learned Judge below held that the plaintiffs were entitled to the principal, viz. Ra. 4,500 under the first mortgage; they were only entitled to interest for 12 years up to the date of the filing of the suit, and that the plaintiffs' claim with regard to the second mortgage was out of time and therefore no relief was given by the learned Judge in respect of the second mortgage.

[3] Now, as far as the first mortgage is concerned, the question that arises is whether the receipt by the mortgagee of Rs. 300 every year under the mortgage constitutes an acknowledgment within the meaning of Section 20, Limitation Act, so as to start a fresh period of limitation in respect of the debt secured by the mortgage. Section 20 deals with the effect of payment on account of a debt, to the extent that section is material for the purpose of this appeal, and it contains a proviso that the acknowledgment of the payment must appear in the handwriting of, or in a writing signed by, the person making the payment, Therefore, a mere part payment of the debt would not save limitation. The proviso further requires that the fact of the payment must appear in the handwriting or in a writing signed by the person making the payment. Provided these two conditions are satisfied then a fresh period of limitation would start under Section 20.

Now, there is another sub-clause to this section which provides that when mortgaged land is in possession of the mortgagee the receipt of the rent or produce of such land shall be deemed to be a payment for the purpose of Sub-section (). Now, in our opinion, the expression 'where mortgaged Land is in the possession of the mortgagee' does not merely apply to cases where the mortgagee is in possession under a usufructuary mortgage; it applies to all cases where the mortgagee is in possession in his capacity as the mortgagee and under the terms of the mortgage. One may easily conceive of a case where in a simple mortgage there may be a provision that on default of payment of interest the mortgagee would be entitled to go into possession. Therefore, if the mortgagee went into possession under a simple mortgage, he would be in possession in his capacity as a mortgagee and under the right given to him under the mortgage deed. Therefore, we see no reason why we should restrict this provision to a case where a mortgagee is entitled to possession by reason of the fact that the mortgage is a usufructuary mortgage. Therefore, if the mortgages is in possession by reason of the mortgage deed and if in that capacity ho receives any rent or produce from the mortgaged property, then the receipt of the rent is deemed to be a payment for the purpose of Sub-section (1).

It is contended by Mr. Madbhavi that even if a mortgagee receives rent or produce it will rot constitute an acknowledgment unless that acknowledgment appears in the handwriting of the person making the payment. In our opinion that contention is not tenable. Sub-section (2) makes the receipt of rent or produce by the mortgagee a payment for the purpose of Sub-section (1) including the purpose of the proviso. In other words, if rent is received by the mortgagee, then in the eye of the law the conditions of Sub-section (1) and the proviso are satisfied. The receipt of the rent is just as good as if the mortgagor had made the payment and the payment appeared in his writing or in the writing of the person who actually made the payment, Any other interpretation would make But Section (2) entirely nugatory. It is impossible to conceive how if the mortgagee is in possession and if he recovers rent that fact can ever appear in the handwriting of the mortgagor. Therefore, we are giving to Sub-section (1) a construction which is in consonance with reason and good sense.

If that be the correct position in law, then when the mortgagee received Rs. 300 every year under the terms of the mortgage deed of 7-2-1917, being in possession of the mortgaged property also under the terms of that mortgage deed, it must constitute a part payment within the meaning of Section 20 (1). If it constituted a part payment, then limitation was saved in respect of the whole debt secured by the mortgage. The mortgage debt was the principal and the interest and both the principal and the interest were secured. Therefore, payment of part of the interest was a part payment of the mortgage debt and the result of the part payment wag that a fresh period of limitation commenced in respect of the whole debt whenever a part payment was made within the meaning of Section 20 (2). Therefore, we are unable to agree with the learned Judge below that the mortgagee is entitled only to recover interest within 12 years of the date of the filing of the suit. In our opinion the whole of the plaintiff's claim under the first mortgage is within time and the whole claim consists of principal and of the interest which they are entitled to under the mortgage deed,


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