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Rm. Ar. Ar. Rm. Ar. Ramanathan Chettiar and ors. Vs. K.M. Ol. M. Somasundaram Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtChennai High Court
Decided On
Case NumberLetters Patent Appeal Nos. 10 and 11 of 1961
Judge
Reported inAIR1964Mad527
ActsCode of Civil Procedure (CPC) , 1908 - Sections 16 and 20; Limitation Act, 1908 - Sections 11, 11(1), 11(2), 13, 19 and 28 - Schedule - Articles 115, 116 and 120; International Law; General Clauses Act, 1897 - Sections 3
AppellantRm. Ar. Ar. Rm. Ar. Ramanathan Chettiar and ors.
RespondentK.M. Ol. M. Somasundaram Chettiar and ors.
Appellant AdvocateV. Vedantachari, Adv. for ;K. Parasram, Adv.
Respondent AdvocateT.V. Ramanathan, ;V. Menakshi Sundaram and ;R. Viswanathan, Advs.
DispositionAppeal dismissed
Cases ReferredUnichaman v. Ahmed Kutti Kayi
Excerpt:
.....clauses act, 1897 - suit instituted by appellant for recovery of monies due under certain transactions - suit dismissed on ground of limitation - more than 3 years elapsed between second and third acknowledgments of liability - nothing in articles 115 and 116 which would be repugnant to if one were to restrict application of term 'registered document' to those registered in india - limitation act itself makes clear distinction between an action laid on basis of registered instrument and one not so laid - policy underlying in giving longer period of limitation to former type of documents is that registration affords notice of contract - such notice be possible only if registration be under laws of this country - article 116 not to apply to present case - in absence of any evidence..........appellants pleaded that as the claim was based on registered instruments of mortgages executed in burma, article 116 of the limitation act would apply and that that would entitle them to a six year period of limitation. alternatively, it was urged that section 13 of the limitation act will save the claim from the bar of limitation.6. the courts below holding that the appropriate provision of the limitation act applicable would be article 116 decreed the suit claim. that view has not been accepted by veeraswami, j. in second appeal. the learned judge held that the claim could not be regarded as being based on a registered instrument as the document of mortgage was not registered in this country and that, therefore, the proper article to be applied to the case would be article 115 of the.....
Judgment:

S. Ramachandra Iyer, C.J.

1. These appeals are from the judgment of Veeraswami, J., reversing the concurring judgments and decrees of the courts below and dismissing the suit instituted by the appellant for recovery of monies due under certain transactions to be referred to hereafter. The respondents are of Indian domicile and they form members of a joint Hindu family with their home in Ramanathapuram District, they had a business at Ohne in Pegu District in Burma and in respect of two sums of Rs. 10,000 each borrowed from the appellants in the above appeals, they through the first respondent who was the Kartha of the family executed on 25-10-1937 two mortgages securing certain immovable properties belonging to them and situate in that country. The mortgage documents were duly registered in accordance with the law of Burma and they were kept alive by periodical acknowledgments made by the manager for the time being of the family. Such acknowledgments were made on 28-5-1940, 12-6-1941, 31-3-1947 and 28-8-1949.

Due to the unsettled conditions in that country consequent on the Japanese invasion the Civil Courts were deemed to be closed under the Burma Emergency Act 11 of 5943 from 8-12-1941 to 31-3-1947. That apart, the acknowledgments to which we have made reference just now would be sufficient under the law prevailing in that country

2. On that date the appellants instituted two suits out of which these appeals arise claiming that the respondents were personally liable to pay the amounts in this country. The debts were no doubt in origin secured over the properties situate in Burma. It is conceded that the debts were payable at that place and that the cause of action also arose therein.

3. The creditors have now given up their security and they have sought personal relief against the respondents in a court in this country within the limits of whose jurisdiction the debtors reside or carry on business. This they will be entitled to do. Vide the decision, Muthukanni v. Andappa, : AIR1955Mad96 (FB).

4. The sole ground on which the suits were contested related to limitation. It will be noticed that more than three years had elapsed between the second and the third acknowledgments of liability referred to above. So also between the date of the last of the acknowledgments and the date on which the suit was filed even, if one were to exclude the period between 5-12-1943 and 1-7-1955 on the ground that the respondents are agriculturists in this State. If, therefore, the debt had become barred by 12-61944 or by 1952 by applying the three year rule of limitation contained in Article 115 of the Limitation Act, subsequent acknowledgment on 31-3-1947 or any suspension of cause of action by a statute will not have the effect of reviving the debt.

5. To get over the difficulty the appellants pleaded that as the claim was based on registered instruments of mortgages executed in Burma, Article 116 of the Limitation Act would apply and that that would entitle them to a six year period of limitation. Alternatively, it was urged that Section 13 of the Limitation Act will save the claim from the bar of limitation.

6. The courts below holding that the appropriate provision of the Limitation Act applicable would be Article 116 decreed the suit claim. That view has not been accepted by Veeraswami, J. in second appeal. The learned Judge held that the claim could not be regarded as being based on a registered instrument as the document of mortgage was not registered in this country and that, therefore, the proper Article to be applied to the case would be Article 115 of the Limitation Act.

7. It is a well accepted rule of International Law that all matters of procedure will be governed by the law of the country in which the court where any legal proceeding is initiated is situate. Statutes of limitation in so far as they prescribe periods within which claim should be enforced, whereby the remedy alone is barred, are regarded as merely procedural. But there may be provisions in such statutes which extinguish the rights of the parties. Section 28 of the Indian Limitation Act is an instance where on the remedy being barred the right to property also stands extinguished, in such a case, that is, where there is no right alive by reason' of its extinguishment by a statute there could obviously be nothing to be enforced in that country or in any foreign country. Provisions of that kind cannot be regarded as merely procedural as they create or destroy substantive rights of parties. This principle has been recognised in a statutory form in Section 11(2) of the Indian Limitation Act.

8. In the present case the suit debts had not been extinguished by any law of Burma. This feature has enabled Mr Vedantachari who appeared for the appellants to argue that once the cause of action which arose to a foreign country is kept alive, by the law of that country, it would be open to the party claiming rights thereunder, to institute a suit to enforce them in any Court outside that country and no question of limitation can at all arise in such a case. Learned counsel referred in this connection to certain statutory provisions In Burma which entitled a creditor to exclude the period during which Courts were closed and also to the fact that the various acknowledgments referred to earlier were sufficient under the law of limitation in Burma to keep alive the debt

9. This contention proceeds on an imperfect appreciation of the legal position. The fact that an action on a contract entered into in a foreign country is not barred under the law of that country cannot enable the person entitled to any right thereunder to sue in any other country, if in respect of a claim under such a contract the right of suit had become barred under the law of the country where the suit is laid To hold otherwise will be to apply the foreign rule of limitation to suits in this country That is quite contrary to Section 11(1) of the Indian Limitation Act Therefore when a liability under a foreign contract is sought to be enforced in a country outside it, two rules must apply (1) the rights under the contract should not have been extinguished under the law of that country where the cause of action arose, for if It had been extinguished by that law there would be nothing left to be enforced either in that country or in any other country and (2) the contract should be enforceable by the law of procedure of the country in which it is sought to be enforced

10. In Dicey's Conflict of Laws, 7th Edn it page 1092 the rule has been stated thus:

'Since the lex causae and the lex fori may differ not only in the length of their periods of limitation but also in the nature of their limitation provisions the following situations require discussion:(1) It the statute of limitation of the lex causae and of the lex fori are both procedural, action will fail if it is brought after the period of limitation of the lex fori has expired although that of the lex causae has not yet expired, but will succeed if the period of limitation of the lex fori has not yet expired although that of the lex causes had expired. The first limb of this rule may still leave it open to the defeated plaintiff to seek his remedy in another jurisdiction but this second limb has been criticised in that it may in effect enable a creditor to enlarge his rights by choosing a suitable forum and that it may cause injustice to a debtor who in reliance on the lex causae has destroyed his receipts'

Two illustrations given by Mr. Dicey at page 1104 might be useful to elucidate the position.

'(1) B is indebted to A on a promissory note governed by French law By that law A's remedy is statute barred By English law it is not A can successfully sue B in England.

(2) B is indebted to A under a contract governed by Scots law By that law, A's right is extinguished after forty years By English law, A's remedy is barred after six years. After six years but within 40 years A sues B to England. The action fails'

The effect of Section 11(1) of the Limitation Act is to apply the rule of limitation of this country from the date when the cause of action arose and not from the time when the right to institute an action in a foreign Court begins to run. To accept such a proposition would again be to apply the rule of limitation of a foreign country to a suit instituted in this country which on the principle we have set out above cannot be correct. What we mean is this; the question whether a suit in this country on a foreign cause of action would be within time or not has got to be decided by computing time from the date when the cause of action arose under the contract and not from the date of last acknowledgment of liability To be more specific the debt being payable under the terms of the mortgage on 15-5-1938, we will have to see whether it has been kept alive by acknowledgments or part payments coming within Sections 19 or 20 of the Indian Limitation Act. There were such acknowledgments in 1940 and 1941. The next acknowledgment was in 1947 Under the Indian Limitation Act, the later acknowledgment can be held to be of a subsisting liability, if the period of limitation were to be regarded as sis years under Article 116 If on the contrary that only three years as under Article 118, the right to file the suit would have to be held to be barred

11. The circumstance that Courts in Burma were dosed between 8-12-1941 and 31-3-1947 will have no bearing on the decision of the question as there was no such closure of the Courts in this country during these dates

12. That takes us to the question as to the appropriate Article of Limitation to be applied Article 115 provides a period of three years for compensation for the breach of any contract from the time when the contract is broken Article 116 provides a period of six years for compensation for the breach of a contract in writing registered, from the time when the period of limitation would be gin to run against a suit brought on a similar contract not registered The contention of Mr Vedan tachari is that as the mortgage document had been registered, although according to the registration law of Burma. Article 116 of the Indian Limitation Act alone would apply The validity of that contention would depend upon the meaning to be given to the word 'registered'. There is no definition of that term in the Indian Limitation Ac! itself But Section 3(49) of the General Clauses Act state.

'Registered used with reference to a document shall mean registered in Part A States or Part C States under the law for the time being in force for the registration of documents'

13. The decision in V G Ramseshayya a Tripurasundari Cotton Press Bezwada ILR 49 Mad 468 : AIR 1926 Mad 615 appears to suggest that the word 'registered' occurring in Article 116 of the Limitation Act would apply to registration of documents under the Indian Registration Act Veeraswami, J., hat referred to the constitutional history of Burma which resulted in its separation from India as and from 1-4-1937. The learned Judge has pointed out that while Section 292 of the Government of India Act, 1935, continued in force the existing laws, such laws had no application to Burma after Its separation although that country had provisions similar to ours in the matter of registration of documents. We agree with that view

14. Article 118 when it refers to registered contracts in writing must therefore mean documents registered under the law prevailing in this country. As the mortgages in question were executed in Burma, after the date of separation of that country from India, registration in accordance with the law of Burma cannot therefore be deemed to be registration within the meaning of Article 116 of the Limitation Act, because that was not in accordance with the laws in force in India.

15. But Mr. Vendantachari however would argue that what Article 116 implied when it referred to a registered contract in writing, was the characterisation of the document and that it had no reference to the law under which the document had to be registered. This contention is against the principle recognised in ILR 49 Mad 468 : AIR 1926 Mad 615 to which we have made reference earlier. Learned counsel argued that is there was no definition of the term 'registered' in the Limitation Act, that word should be given a liberal meaning and not be restricted by importing the definition of the term contained in the General Clauses Act

16. Definitions contained in the General Clauses Act are intended for a proper interpretation of all Central Acts made after the commencement of that statute. Prima facie the term defined by that enactment will have the same meaning in all subsequent enactments which employ that term unless there be something inconsistent or repugnant to the context in the latter Act. Learned counsel, then invited our attention to the observations of the Supreme Court in Subramania Iyer v. Official Receiver Quilon, : [1958]1SCR257 where their Lordships observed that the General Clauses Act was enacted in order to shorten the language used in parliamentary legislation and to avoid repetition of the same words in the course of the same piece of legislation and that the Act was not meant to give a hidebound meaning to terms and phrases generally occurring in legislations even when there was something repugnant in the subject or context of the particular enactment which had to be interpreted.

17. There is nothing, however, in the Indian Limitation Act. and particularly in Articles 115 and 116 which would be repugnant to if one were to restrict the application of the term 'registered document' to those registered in India. The Limitation Act itself makes a clear distinction between an action laid on the basis of a registered instrument and one not so laid. The policy underlying in giving a longer period of limitation to the former type of documents is that registration affords notice of the contract.

18. Such notice will be possible only if the registration be under the laws of this country. We cannot, therefore, agree with the contention of learned counsel that Article 116 would apply to the present cage.

19. It has then urged that if Article 118 were to be confined to cases of rights arising out of documents registered in India those coming under Article 115 would only cover case of rights flowing from documents not at all registered and that therefore the claim based upon a document registered in a foreign country will not be covered by either of the two articles and that, therefore, Article 120 will apply. In support of this contention reliance was placed on Unichaman v. Ahmed Kutti Kayi, ILR 21 Mad 242, where a kanomdar under a registered kanom was evicted and later he filed a suit for recovery of the amount of kanom. It was held that the liability sought to be enforced could be so enforced on the ground of failure of consideration. The learned Judges observed:

'If this liability be taken to be one arising under a covenant implied by law as incidental to the mortgage contract (though it was in writing and registered) then Article 116 of the Limitation Act would apply. Otherwise, the appropriate Article is 120, the case not being otherwise provided for.'

We cannot see how it can be said that the present case does not come under Article 115. That provision relates to suits on the basis of contracts not in writing registered under the laws in India. Admittedly the mortgage documents in the present case were not registered according to the law of India. It will therefore come under Article 115. Article 120 will not consequently apply to the case

20. It was then argued that as the respondents were residing in Burma, Section 13 of the Limitation Act would save the suits from the bar of limitation. But this argument ignores the fact that during the entire period of Japanese occupation of that country and even for sometime later the respondents have been residing only in this country. The learned Judge has held that in the absence of any evidence that the respondents were away from India during the relevant period, the appellants would not be entitled to claim the benefit of Section 13 of the Limitation Act. No objection has been taken to that conclusion. The appeals fail and will stand dismissed.

21. Before concluding we must acknowledge our obligations to Mr R. Viswanathan for his assistance in the case. The first respondent was not represented before us, his advocate having reported that he had received no instructions. Mr. Viswanathan at our request presented the case on behalf of the first respondent. We thank him for it.

22. We do not consider that in the circumstances of the case there should be any order as to costs


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