1. The question which calls for determination in the present appeal is whether a statement made by the appellant in an application which he made for permission to bid at an auction sale of certain property is an acknowledgment of liability sufficient under the provisions of Section 19 of the Indian Limitation Act to save limitation in respect of an application for execution of a decree for sale which had been obtained by the mortgagee of the property. The decree had been obtained long before the date of the application which was made by the appellant, and the decree in the execution of which the appellant sought permission to bid was a decree for money which he was seeking to execute against the mortgagor. In the application the appellant stated that there was an encumbrance of Rs. 1,011-7-9 of the mortgagee on the property and he went on to say that he would purchase the property if allowed to bid subject to the mortgage. The date of this application is admittedly such as would save limitation in case it could be said that the statement in it amounts to an acknowledgment of liability within the meaning of those words as used in Section 19 of the Indian Limitation Act.
2. The words must necessarily amount to what may be called an existing liability as opposed to a past liability; but on this point there can be no doubt at all. The appellant states in his application that there was an encumbrance upon the property and he agreed to purchase it subject to the mortgage if he was permitted to bid; If the mortgage was not existing at the date of the application, the appellant would not say that he would purchase the property subject to the mortgage. There was therefore a statement in the application which the appellant made that the mortgage was existing at the date of the application. It was not existing strictly as a mortgage for it had merged in the decree which the mortgagee had obtained upon it for sale, but that is not a very important matter. The point is that the encumbrance was still upon the property and the appellant had so stated in his application.
3. It is contended, however, on behalf of the appellant that even so there was no acknowledgment of liability, because at the time when the appellant made the application he had no interest in the property. The personal liability to pay the mortgage amount, if any, was of the mortgagor and was not of the appellant nor did the appellant by his application undertake the personal liability of the mortgagor. It is pointed out that consequently at the time when the application was made there was no liability whatsoever upon the appellant, and it is contended that there cannot be an acknowledgment of liability when a third person makes a statement saying that there is a mortgage upon the property and that even though a decree has been obtained upon the mortgage the decretal amount still remains unpaid. It is urged that such a statement by a third person cannot possibly amount to an acknowledgment of liability because the words presuppose that the statement must make out that the maker or his property was in some way or other liable. It is conceded indeed that it was not necessary that the statement should show that the maker was personally liable; for example in the case of a charge if before the last date on which a suit can be filed to enforce the charge, the person who had given the charge was to make a statement that the amount of the charge still remained unpaid but coupled it with an assertion that he was not personally liable to pay it, the statement would still be an acknowledgment of liability in respect of the right which was claimed by the charge-holder which would be the right to bring the property given in charge to sale in enforcement of the charge, But the contention of the appellant is that not only was the appellant not personally liable at the date when he made the statement to pay the amount of the mortgage but also he had no interest in the property which the mortgagee was entitled to bring to sale under the terms of the decree obtained by him.
4. Now this question hag arisen before the Courts and there has been a distinct cleavage of opinion as to whether a statement by a person would amount to an acknowledgment if that statement does not make out that he is personally liable, and if, when it is made, he has no interest even in the property which someone else claims he is entitled to bring to sale in enforcement of a mortgage or charge. One view has been that it is not necessary that the maker of a statement should be liable personally at the date when he makes the statement or that he should have any interest in the property which a mortgagee or charge-holder brings to sale when the statement is made. The first of the cases in which that view was taken was relied upon by the learned Judge in the decision which has been appealed from in this Letters Patent appeal. It will be found in the case of Jugal Kishore v. Fakhr-ud-din I.L.R(1906) All. 90. The plaintiff in that case Jugal Kishore claimed to be a part owner of a house in suit for partition and separate possession of a share in it. In order to save limitation the plaintiff relied upon a statement made by the defendant Alim-ud-din in a suit for premption brought by him against the plaintiff in the year 1892. In the plaint in that suit Alim-ud-din stated that one Raghubar Dayal had bought 28 sihams in the property in execution of the money decree obtained by plaintiff Jugal Kishore and had become owner of 28 sihams. and further that Jugal Kishore had purchased 14 sihams under a mortgage decree obtained by one Jafar Khan. The plaintiff's suit was for possession of these 14 sihams purchased by him under the mortgage decree. The question having then arisen as to whether the statement of Alim-ud-din who had no interest whatsoever in the property at the time when he filed the plaint in the suit against Jugal Kishore could be taken to be an acknowledgment of liability, it was held that inasmuch as Alim-ud-din was a person against whom the plaintiff was claiming his right to a share in the property in suit and inasmuch as he had made a statement in the plaint in the suit which he filed against Jugal Kishore admitting Jugal Kishore's right, he could not say that the suit was barred by the statute of limitation. It was, no doubt, true that at the time when Alim-ud-din made the statement he had no interest in the property in suit, but it was held that Section 19 of the Limitation Act did not require that a person making an acknowledgment should have an interest in the property in respect of which the acknowledgment was made at the time when the acknowledgment was given. This case has subsequently been followed by a single Judge of the Madras High Court without giving further reasons in the case of Krishnayya v. Venkatappayya : AIR1925Mad134 .
5. Now if we look at Section 19 itself, it does say what person has got to make the acknowledgment inasmuch as it says that the acknowledgment must be in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability. In brief it means that the acknowledgment must be made by the defendant or his predecessor-in-title, to use a short term, and the view which appears to have appealed to their Lordships of the Allahabad High Court was based upon the interpretation of the words 'by the party against whom such property or right is claimed or by some person through whom he derives title or liability,' which certainly by themselves do not require that the statement relied upon as acknowledgment must be made by a person who was himself liable at the date of the acknowledgment or where the liability sought to be enforced was against property, he should be interested in the property at the date of the acknowledgment. But we have got besides, the words 'an acknowledgment of liability in respect of such property or right.' Now in this case what we are concerned with is an application to execute a final decree for sale obtained by the mortgagee. The mortgagee claims the right to bring the mortgaged property to sale given to him by the decree for sale, and the question of limitation has to be determined with reference to an application for execution which he subsequently made to the Court. The acknowledgment of liability must, therefore, be in reference to this right claimed by the mortgagee to bring the property to sale in execution of the mortgage decree. Now if the amount due under the decree was not paid, then the property would be liable to be sold and any statement that the amount due under the decree which could loosely be described as 'the mortgage amount' was not paid, would take the case of the mortgagee that there was an acknowledgment in respect of the right some way. The question is whether it takes it all the way when the statement is not made by a person who was not personally liable at the date of acknowledgment and was not interested in the property which was to be sold. It has to be remembered that the word 'acknowledgment' is used in the context in which we find it in Section 19 of the Limitation Act in the sense given in the Oxford Dictionary of 'own an obligation, for example to acknowledge the receipt of a letter.' Wharton's Law Lexicon which has been referred to by the learned Judge from whose decision this appeal is preferred says with reference to acknowledgment of debt or liability that it is an admission that a debt is due or that some claim or liability is still in existence, so as to prevent the operation of the statute of limitation. The acknowledgment must, therefore, bean admission with regard to a debt by a defendant or the person through whom he claims title or derives liability that some claim or liability was still in existence. With reference to the facts of this case the admission would undoubtedly be with reference to the decretal debt being still due and the liability under the decree being still in existence; but the question is, can it be said that a statement that the decretal debt was still not paid and consequently the property was still liable to be brought to sale in execution of the decree, was an 'admission' when it was not made by the mortgagor or by any other person who was liable under the terms of the decree and was not interested in the property which would be brought to sale under the mortgage decree In our opinion it would not be correct to say where A says with reference to a mortgage by B in favour of C that the mortgage was still unpaid and the mortgage debt was due, that there was an admission by A with regard to the mortgage being still in existence. It would certainly be a statement by A that the mortgage was still in existence, but not an admission by him inasmuch as the debt was not due by him and he had no interest in the mortgaged property. This is implicit in the words 'acknowledgment of liability' which are contained in Section 19 of the Indian Limitation Act.
6. That was the view which appealed to the Chief Court of Oudh in the case of Amir Mirza Beg v. Lachmi Narain (1931) 7 Luck. 270. It is true that the observations which are relied upon were made with reference to an argument which was addressed to the Chief Court that if Section 19 was construed strictly according to the words used, the mortgagor could extend limitation against a puisne mortgagee by making an acknowledgment of a prior mortgage even after he has parted with the equity of redemption. This argument which has appealed subsequently to the High Court of Madras with regard to property which had been sold by the mortgagor though he had retained other property mortgaged by the same mortgage, did not appeal to the Chief Court of Oudh and they said that in such a case the statement relied upon as an acknowledgment of liability did not come within the meaning of those words as used in Section 19 of the Indian Limitation Act, because an acknowledgment of liability or right presupposes an acknowledgment by a person possessed of some interest which can be found by the acknowledgment, because otherwise the acknowledgment would not have the 'legal quality of acknowledgment.' We do not wish to subscribe to their reason that otherwise a mortgagor could extend limitation against a puisne mortgagee after he. had parted with the equity of redemption-as to which we express no opinion-but we would like to point out that before one could say that there was an acknowledgment of liability and the person who made the statement was not personally liable, he must be interested in some property which was liable for the debt in respect of which the acknowledgment is alleged to have been made. The learned Judges of the Chief Court were inclined to put in such a case the statement before them on a lower level on the ground that the statement would not have the legal quality of an acknowledgment. We would rather say that the statement was not an acknowledgment of liability inasmuch as it was neither an admission of liability by the maker nor was it an admission by the maker that any property in which he was interested was liable for the debt concerned. Thus in the ease of Amarchand v. Narayan : AIR1932Bom531 where in a suit for redemption there was a statement made by Rajaram the son of Sakhubai who was the owner of the property in question at the time when the statement was made, Baker J. was not inclined to look upon the statement of Rajaram as an admission on the ground that at the time the statement was made Sakhubai was the sole owner of the land and Rajaram as a matter of fact had no interest in it. Then we have got the case of Muthu Chettiyar v. Muthuswami Ayyangar 4 in which the question arose as to whether an acknowledgment of a mortgage debt made by a mortgagor who has sold a portion of the mortgaged property but remained personally or in respect of the unsold portion liable on the mortgage was effective to save limitation as against the property which was sold. Krishnan Pandalai J. who was a party to that judgment, while reserving the question as to whether after a mortgagor's personal liability had become barred and he had sold all the mortgaged property, any acknowledgment by him of the mortgage debt could save limitation against the purchaser, observed that an acknowledgment under Section 19 must be an admission of some present liability 'of the person acknowledging, corresponding to a present right in some else.' He said that if it did not imply that, it would not be correct to talk of it as an acknowledgment. That in our opinion is the correct view to take of the words 'acknowledgment of liability.'
7. It is true that in regard to an acknowledgment of the mortgage debt by a mortgagor who has sold a portion of the mortgaged property but remains personally or in respect of the unsold portion liable on the mortgage the view has been taken that the acknowledgment is effective to save limitation, as against the property sold, but that need not affect the question before us because the acknowledgment there is regarded as coming under the purview of Section 19 of the Indian Limitation Act as the acknowledgment of a person from whom the mortgaged property was purchased by the person proceeded against and through whom the latter claimed title; and that was how the Lahore High Court justified their view in Skinner v. Bank of Upper India I.L.R.(1936) Lah. 171. In that case the mortgagors appear to have sold all the mortgaged property but they were still liable personally to pay the mortgage debt and consequently a statement by them that the debt was still due was held to amount to an acknowledgment. We do not wish to go into that question in this case and it would be sufficient to say that in this case it could not possibly be said that there was before the period of limitation expired any statement either by the person sued or the person through whom he claimed title that he or his property was liable.
8. In this view of the case the appeal must be allowed and darkhast must be dismissed with costs throughout.