Skip to content


T.S.P.L.S. Thinnappa Chettiar by Agent A.S. Arunachalam Chettiar Vs. Putti Krishna Rao and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1941Mad6
AppellantT.S.P.L.S. Thinnappa Chettiar by Agent A.S. Arunachalam Chettiar
RespondentPutti Krishna Rao and ors.
Cases ReferredFord v. Newth
Excerpt:
- - to save limitation the plaintiff relied on the five following payments endorsed on the deed of mortgage :rs. he was at best an agent empowered to discharge the debt and not to keep it alive by a part payment; 4000 was paid to me as aforesaid, you shall yourselves hold and enjoy the undermentioned nanja lands from this date hereditarily from son to grandson and so on in succession with powers of alienation by way of gift, exchange, sale. 115 which clearly illustrates the doctrine of agency for the purpose of the said statutes. lord westbury in the course of the judgment made the following observations at page 1282: i think no reasonable doubt can be entertained that under the statute the receiver in the receipt of the rents of the limerick estate is, in point of fact as well as of.....venkataramana rao, j.1. the question for decision in this appeal is whether the plaintiff's suit is barred by limitation. the relevant facts are few and not in dispute. one jaya rao since deceased executed a deed of mortgage to one sundaram aiyer on 18th june 1919. in execution of a decree against the said sundaram aiyer the plaintiff on 10th april 1935 purchased the rights under the said mortgage deed. after giving credit to certain payments received towards interest and principal, the plaintiff sues for recovery of the balance due thereunder. the amount due on the date of the plaint was rs. 9432. the plaintiff waived rs. 432 and claimed only rs. 9000. defendants 1 to 3 are the sons of the mortgagor jaya rao; defendant 4 is a divided brother of jaya rao and defendants 5 to 8 are alienees.....
Judgment:

Venkataramana Rao, J.

1. The question for decision in this appeal is whether the plaintiff's suit is barred by limitation. The relevant facts are few and not in dispute. One Jaya Rao since deceased executed a deed of mortgage to one Sundaram Aiyer on 18th June 1919. In execution of a decree against the said Sundaram Aiyer the plaintiff on 10th April 1935 purchased the rights under the said mortgage deed. After giving credit to certain payments received towards interest and principal, the plaintiff sues for recovery of the balance due thereunder. The amount due on the date of the plaint was Rs. 9432. The plaintiff waived Rs. 432 and claimed only Rs. 9000. Defendants 1 to 3 are the sons of the mortgagor Jaya Rao; defendant 4 is a divided brother of Jaya Rao and defendants 5 to 8 are alienees from Jaya Rao of some of the properties claiming under alienations subsequent to the date of the mortgage. The main defence was one of limitation. To save limitation the plaintiff relied on the five following payments endorsed on the deed of mortgage : Rs. 400 on 15th July 1922 (Ex. A-2); Rs. 700 on 20th May 1923 (Ex. A-3); Rs. 150 on 4th June 1923 (Ex. A-4); Rs. 125 on 20th April 1924 (EX. A-5) and Rs. 5 on 16th December 1935 (EX. A-6). The first four payments were made and signed by defendant 4 and the last payment was by Jaya Rao and signed by him.

2. The case for the plaintiff is that three years after the date of the said mortgage Jaya Rao sold certain property belonging to him but not comprised in the deed of mortgage to defendant 4 and another by a sale deed dated 23rd June 1922 (Ex. c) and directed them to pay and discharge the said mortgage, that the payments were made and signed by defendant 4 in pursuance of Ex. C, that the last payment made by Jaya Rao was within twelve years of the last payment made by defendant 4 and therefore the suit is within time. The case for the defendants is that the payments and at any rate the payment of Bs. 150 on 4th June 1933 (Ex. A-4) was not a payment of interest as such, that none of the payments was by a person liable to pay the interest or by the debtor or his agent and therefore would not save limitation. The learned Subordinate Judge took the view that the payments were towards interest as such but the defendant 4 was not the duly authorized agent of Jaya Rao or a person liable to pay the debt within the meaning of Section 20, Limitation Act, and that none of the payments made by him could save limitation and the endorsement of payment by Jaya Rao was made long after the claim under the mortgage was barred. There was another contention raised on behalf of the plaintiff that even assuming that the defendant 4 had no authority to make the payment, Jaya Rao must be deemed to have ratified it by his endorsement in Ex. A-6. The Subordinate Judge negatived this contention also holding that the defendant 4 did not purport to act on behalf of Jaya Rao in making the payment, that the alleged ratification was after Jaya Rao sold and mortgaged the properties to defendants 5 to 8 and so far as they are concerned, the alleged ratification could not be valid. On these facts the learned Subordinate Judge dismissed the suit. The plaintiff has preferred this appeal.

3. Mr. Sitarama Rao on his behalf raises the following contentions : (1) By virtue of Ex. C, defendant 4 became liable to pay Jaya Rao the debt and therefore defendant 4 was a person liable to pay the debt within the meaning of Section 20, Limitation Act. (2) Defendant 4 was an agent to make the part payments within the meaning of the Section (3). There was a valid ratification by Jaya Rao of the payments made by defendant 4. Mr. Muthukrishna Ayyar on behalf of the alienee-defendants in answer contended thus: Defendant 4 was a stranger to the mortgage contract and further he was not interested in the mortgaged property; the person liable to pay the debt within the meaning of Section 20, Limitation Act, must be one who was either a party to the contract or his legal representatives or a person deriving title from him and who could have been sued by the mortgagee; defendant 4 would not come under any of these categories; he was at best an agent empowered to discharge the debt and not to keep it alive by a part payment; the alleged ratification is not valid as it would operate to the prejudice of his clients. Before dealing with these contentions, it is necessary to find the relationship of the vendees under EX. C and therefore of defendant 4 to Jaya Rao, the mortgagor. Ex. C so far as is material for the purpose of the present discussion runs thus:

Deed of absolute sale executed on 9th Ani of Thunthtibi, corresponding to the 23rd June 1922, to you, namely (1) Putti K. Sethu Rao and (2) Putti Dasu Rao...by Putti Jaya Rao...the undermentioned property has, this day, been sold to yon and the amount received is Rs. 4000. Particulars of receipt of this sum of Rs. 4000. As I have directed you to pay and discharge the amount of principal and interest due under the mortgage deed for Rs. 8000 executed by me in favour of Sundaram Aiyer, residing at Karur, amount paid to me is Rs. 3400. As I have directed you to pay and discharge the amount due by me to the Co-operative Credit Bank at Andankoil, amount paid to me is Rs. 600. As in all Rs. 4000 was paid to me as aforesaid, you shall yourselves hold and enjoy the undermentioned nanja lands from this date hereditarily from son to grandson and so on in succession with powers of alienation by way of gift, exchange, sale.

4. The substance of the transaction as disclosed by the language of the document is that from and out of the consideration money of Rs. 4000 the vendees were directed to discharge two debts, namely, a sum of Rs. 9400 in discharge of the suit mortgage which was then the amount due and payable thereunder and Rs. 600 in discharge of u, debt due to the Co-operative Credit Bank at Andankoil. Prima facie, it is a mandate by the vendor to the vendees to put an end to the said debts. The relationship is therefore one of agency. The question is, does it jconfer a power to keep alive the debt? Under Section 20, Limitation Act, the agent whose payment would keep alive the debt must be one who was duly authorized to make the part payment of interest on principal. Ex. C. confers only a power to discharge and extinguish the debt. A power to extinguish the 'debt would not, in our opinion, carry with lit a power to keep alive the debt. Our High Court has consistently taken the view that a direction or power to discharge a debt does not make the donee of the power an agent authorized to make a part payment so as to keep alive the debt : vide Chidambaram Pillai v. Veerappa Chettiar ('19) 6 A.I.R. 1919 Mad. 993 . In Alagappa Chettiar v. Subramania Pandia ('14) 1 A.I.R. 1914 Mad. 381 the facts were as follows : defendants 1 and 2 in that case executed a deed of mortgage in favour of defendant 3 therein for Rs. 26,000. It was alleged in the deed of mortgage that from and out of Rs. 26,000 which formed the consideration of the mortgage a sum of Rs. 10,920 was stated to have been received as follows:

Defendants 1 and 2 have executed two registered bonds on 14th December 1896 and 17th March 1897 for Rs. 2000 and Rs. 4000 respectively in favour of the plaintiff's assignees. The sum received by us in the matter of our having given you permission to pay off and obtain return of the same is Rs. 10,920.

5. In pursuance of this deed, the mortgagee paid a sum of Rs. 4170 towards interest on the bond dated 17th March 1897. The question was whether this payment of interest by the said defendant 3 would keep alive the debt due under the said bond. Wallis and Sadasiva Iyer JJ. held that it would not, observing that though the mortgagee had authority to pay off the debt in full he had no authority to make a part payment of interest as such so as to bring the case within Section 20, Limitation Act. The principle of this case was applied consistently in subsequent decisions : Balaguruswami Naicker v. Gurusawmi Naicker ('25) 12 A.I.R. 1925 Mad. 703 (Devadoss and Wallace JJ.), Ramasami v. Kasinatha : AIR1928Mad226 (Kumaraswami Sastri and Curgenven JJ.) and Subbakka v. Venkata Sastri ('32) 1932 M.W.N. 1193 (Ramesam J.). If the principle of these decisions is to be followed, there ean be no question that the part payment made by defendant 4 would not be payment by an agent duly authorized within the meaning of Section 20, Limitation Act.

6. But Mr. Sitarama Rao contends that apart from any doctrine of agency defendant 4 having under Ex. C become liable to pay the mortgage debt is a person liable to pay the debt within the meaning of Section 20, Limitation Act. He very strongly relied on Bradshaw v. Widdington (1902) 2 Ch. 430, in support of his contention and particularly the observations of Buckley J. in that case with Which we shall presently deal. He also relied on certain passages from English text-writers who referred to (1902) 2 CH 4306 as establishing the proposition he is contending for : vide Banning on Limitation, p. 168; Halsbury's Laws of England, Vol. 19, pp. 94 and 95. We may point out at once that the case in Bradshaw v. Widdington (1902) 2 Ch. 430 was noticed by their Lordships of the Judicial Committee in National Bank of Upper India Ltd. v. Bansidhar Reported in ('29) 16 A.I.R. 1929 P.C. 297, where their Lordships had to deal with a question of part payment on facts almost similar to the said case. They did not apply the principle enunciated by Buckley J., because they considered it unnecessary in the view they took of the facts, namely, the person who made the payments was the duly authorized agent of the debtor to make the payment. They however remarked thus at p. 9 with reference to the English case in Bradshaw v. Widdington (1902) 2 Ch. 430 and other decisions relied upon:

Their Lordships do not think it necessary to discuss the applicability of these oases to the construction of the Indian Act...whether the English cases to which reference has been made above would engraft, a larger principle upon the section may possibly have to be considered on some future occasion. Their Lordships note that Farwell L.J. in In re Lacey; Howard v. Lightfoot (1907) 1 Ch. 330, appeared to regard Bradshaw v. Widdington (1902) 2 Ch. 430 as one only of implied agency.

7. Their Lordships thus left the question open. Before considering the applicability in Bradshaw v. Widdington (1902) 2 Ch. 430 to the construction of Section 20, Limitation Act, we think it necessary to examine whether there was any warrant even in English law in support of the said principle. A reference to the history of the English legislation relating to part payments may not be out of place in this connexion because until 1902 as noticed by Buckley J. himself no case has gone the length of enunciating the principle in the way he has done. Under early English law the only statute of limitation was that relating to simple contract debts, 21 Jac. I.C. 16. Under that statute the remedy to recover a debt became barred after six years. There was no provision relating to acknowledgment or part payment of a debt. The decisions evolved a rule that if there was acknowledgment of a debt which, amounted to a fresh promise to pay the debt, a cause of action could be laid thereon, i.e., not on the original debt but on the new promise to pay. It was generally assumed that the acknowledgment of a debt implied a promise to pay and from the part payment of interest, an acknowledgment was implied thus implying a fresh promise to pay. Lord Tenterdon's Act 9, Geo. IV, C. 14, modified the effect of the decisions relating to acknowledgments by providing that acknowledgments of a debt must be in writing signed by the party charged but left the question of part payments untouched. As the measure of the creditor's right is thus based on the new promise, it evidently followed that the acknowledgment or part payment must be by a person liable under the contract to pay the debt or his real or personal representative apart from the doctrine of agency : vide Lightwood on Time Limit, p. 341. There was no special statute of limitation relating to specialty debts or debts charged upon land though Courts of law and equity established twenty years as the period after which they would presume payment. It was only in 1833, two statutes were passed, namely, 3 and 4 William IV, C. 27, which by Sections 40 and 42 provided, for the recovery of sums of money charged upon land and arrears of interest in respect thereof and 3 and 4 William IV, Ch. 42 which provided for the recovery of specialty debts. The relevant provisions of these statutes in so far as they have got a bearing on the question in issue run thus : 3 and 4 William IV, C 27:

40. After the said 31st day of December 1883, no action, or suit, or other proceeding shall be brought to recover any sum of money secured by any mortgage judgment or lien or otherwise charged upon or payable out of any land; but within twenty years next after a present right to receive the same shall have accrued to some person capable of giving a discharge for or release of the same unless in the meantime some part of the principal money or some interest thereon shall have been paid or some acknowledgment of the right thereto shall have been given in writing, signed by the person by whom the same shall be payable or his agent to the person entitled thereto or his agent....

42. After the said 31st day of December 1833, no arrears of rent or of interest in respect of any sum of money charged upon or payable out of any land, shall be recovered by any distress, action or suit but within six years next after the same respectively shall have become due,, or next after an acknowledgment of the same in writing shall have been given to the person entitled thereto or his agent, signed by the person by whom the same was payable or his agent....

3 and 4 William IV, chap. 42:

3. All actions of covenant or debt upon any bond or other specialty...shall be commenced and sued within the time and limitation hereinafter expressed and not after....

5. Provided always, that if any acknowledgment shall have been made, either by writing, signed by the party liable by virtue of such indenture, specialty or recognizance, or his agent, or by part payment, or part satisfaction on account of any principal or interest being then due thereon...within 20 years after such acknowledgment by writing or part payment or part satisfaction as aforesaid.

8. It will be seen that the acknowledgments and part payments are put on the same footing and no difference is made between the part payment of principal or interest in regard to its legal effect. The relevant expressions whose interpretation may have a bearing on the construction of the Indian enactment are 'the person by whom the same shall be payable or his agent' which are contained in Sections 40 and 42 of 3 and 4 will. IV, Ch. 27, and the words 'by the party liable' contained in Section 5 of 3 and 4 Will. IV, Ch. 42.This was the prevailing law until 1874 and Section 40 of 3 and 4 Will. IV, ch. 27 was replaced by Section 8, Real Property Limitation Act, 1874 which substituted 12 years for 20 years. In Roddam v. Morely (1857) 1 De G & J 1, Section 5 of 3 and 4 Will. IV, Ch. 42, that is, the statute relating to specialty debt became the subject of judicial interpretation. The question in that case was whether a payment by a tenant for life of certain land under a will would save limitation in respect of a debt due under a bond by an ancestor by which he and his heirs were bound as against the remainder-men. It was held by Lord Cranworth overruling Sir Page Wood that the devisee would be a person liable to pay the debt within the meaning of Section 5 of the Act. Before giving his decision Lord Cranworth referred the matter to the opinion of two Common Law Judges, Williams and Crowder JJ., who gave their opinion that the devisee would properly be said to be liable by virtue of the indenture as either the real or personal representative within the meaning of the Act.

9. Lord Chancellor accepting that opinion remarked that the person who would save limitation must be a person who was interested in making the payment; and the question was whether a devisee for life was a party so interested. He pointed out that though under the terms of the bond the heirs of the ancestor were bound inasmuch as the property in the hands of the devisee was liable to be proceeded against, he would be a person liable to be sued and therefore a person liable to pay the debt. Under the law then prevailing both the heirs and the devisee were liable to be sued and they were both interested in resisting the demand of the creditor. He therefore deduced the principle that where there are several persons liable in respect of a debt payment by any one of them would be enough to save limitation because the statutory power did not require that the payment must be by the persons liable. The principle of this case was later applied in English Courts in the case of simple contract debts in Hollinghead v. Webster (1888) 37 Ch. D. 651, where Chitty J. in the course of the judgment observed at page 659 as follows:

The right principle to adopt is, that so far as the real estate is concerned, there is no one else but the tenant for life to pay the interest; that in making such payment he represents the whole estate; that the payment is an admission of the liability to the debt affecting the real estate of which he is in possession.

10. Subsequent to this decision, Roddam v. Morely (1857) 1 De G & J 1, Lord Westbury in Bolding v. Lane (1863) 1 De G.J. & S. 122 had to construe the words 'the person by whom the same was payable.' In Section 42, 3 and 4 Will. IV, ch. 27, he observed:

These words do not denote merely the persons liable to pay the debt but all the persons against whom the payment of such arrears may be enforced by any action or suit and by whom therefore as they have a right to pay such interest, interest may be properly said to be payable...

11. These words appear to have been selected as a description capable of including not only every person liable to be sued at law but every person who having interest in the land sought to be charged may be properly sued as a defendant in a suit in equity brought to enforce a payment of the principal and interest out of such land. He re-affirmed this interpretation in Chinnery v. Evans (1864) 11 H.L.C. 115, where referring to Bolding v. Lane (1863) 1 De G.J. & S. 122, remarked thus at p. 1283:

What was decided in Bolding v. Lane (1863) 1 De G.J. & S. 122 was this that the words 'the person by whom the same is payable, or his agent,' were words of such large import and meaning that they would not only comprehend the mortgagor and his personal representatives, upon whom the contract would be personally binding, but would also include the second or the third mortgagee, by whom the principal and interest due to the first mortgagee might with propriety be said to be payable.

12. Therefore apart from the question of agency the person liable to pay the debt must be the person by whom the debt was payable within the meaning of English statute above referred to, that is (1) the debtor or the party to the contract, (2) his real and personal representatives after his death, that is, heirs and devisees (whether devisees of mortgaged estate or free estate or devisees of different estates or of a single estate to a tenant for life and remaindermen), (3) in the case of a debt charged on land, person deriving title from the debtor, that is the assignees of equity of redemption either mortgagees or purchasers. The legal basis on which all the above persons were held to be persons by whom money was payable is that they are all persons against whom an action at law or suit in equity could be maintained by the creditor for the recovery of the debt. It was on this basis Lord Westbury rested his judgment both in Bolding v. Lane (1863) 1 De G.J. & S. 122 and Chinnery v. Evans (1864) 11 H.L.C. 115. That was also the basis of the decision in Roddam v. Morely (1857) 1 De G & J 1, the principle of which is thus put by Harwell L.J.:

Roddam v. Morely (1857) 1 De G & J 1 appears to me to rest upon the joint liability of a number of persons standing in equal peril of suit and who all benefit by the discharge of all or any part of such liability : In re Lacey; Howard v. Lightfoot (1907) 1 Ch. 330, .

13. Payment made by the agent of the above persons will be equally operative. It is useful in this connexion to refer to the case in Chinnery v. Evans (1864) 11 H.L.C. 115 which clearly illustrates the doctrine of agency for the purpose of the said statutes. In that case lands in Cork, Kerry and Limerick were mortgaged by the owner. Subsequent to the mortgage the owner sold the Kerry estate to one M. Some time later he demised the lands in Cork to Chinnery who subsequently obtained by sale the estate of Kerry. At the instance of the mortgagee a receiver was appointed and he was only able to obtain possession of the Limerick estate. From the rents and profits collected out of the said lands, he made payments of interest towards the mortgage. The question was whether such payments would save limitation even as against Chinnery in whom the lands in Cork and Kerry were vested. It was held that the payments saved limitation on the ground that they must be deemed to have been made by the receiver as the agent of the mortgagor. Lord Westbury in the course of the judgment made the following observations at page 1282:

I think no reasonable doubt can be entertained that under the statute the receiver in the receipt of the rents of the Limerick estate is, in point of fact as well as of law, the receiver of the mortgagor, the owner of the estate subject to the mortgage, and that any payment made by the receiver in pursuance of the order, is payment in law by the legal agent of the person liable to pay.

14. This case is therefore a clear authority for the position that payment made by a person who represents the mortgagor will be sufficient to save limitation, that the agency need not arise out of a contract and the agency may arise by operation of law. The scope of this decision was explained by Jessel M.R., in Cockburn v. Edwards (1881) 18 Ch. D. 449 where the learned Judge referring to Chinnery v. Evans (1864) 11 H.L.C. 115 remarked as follows:

The case there arose under the statute of limitations, 3 and 4 Will. IV, C. 27 and the first question to be decided was whether a payment in order to take a case out of statute must be made by the party chargeable or his agent and it was held that it must. Then arose the question whether the payments in that case were so made. The payments were made by a receiver, who no doubt, had been appointed at the instance of the mortgagee, and the question was whether such payments were made by or on behalf of the mortgagor. The payments therefore were payments made by an agent of the mortgagor. The decision is that payments, in order to take a case out of the statute, must be so made.

15. It is therefore clear that Jessel M.R., understands the case in Chinnery v. Evans (1864) 11 H.L.C. 115 as a case of agency. One thing that is clear from the decisions is that payments in order to operate as an exception to the statute must not be made by a stranger, that is, the person making the payment must be either a party to the transaction by which the debt was created or interested in the property which would be liable for the payment of the said debt and by the possession of which the person interested becomes liable to pay the debt. In dealing with the question whether a payment of interest by a stranger would keep alive the mortgage, Lord Westbury remarked thus:

It is hardly necessary to deal with such an improbable case as that; but the answer to it I think, would be this : that money paid, that is money handed over, by a stranger to the contract under which it was paid, to the individual entitled to receive it would not have the characteristics and the legal quality of payment. It would be a voluntary render, a gift or donation being made by a party not in any respect subject to liability to the individual who would not be entitled to receive from the person so rendering it any part of the money which it is supposed would be so paid : Chinnery v. Evans (1864) 11 H.L.C. 115 .

16. This is also made very clear by the decision of the Privy Council in Lewin v. Wilson (1886) 11 A.C. 639. In that case one Howie and White gave a joint and several bond to one G to secure the payment of a sum of . 1000 advanced by G. As between Howie and White, White was a surety but they were both principal debtors to the obligee. On the same day both Howie and White mortgaged some property to the obligee to secure the said debt. White's mortgage contained a condition that if he and Howie or either of them, their or either of their heirs, executors or administrators shall pay to G the sum borrowed, the mortgage deed is to be void, otherwise to remain in full force. A question arose whether payments made by Howie would prevent time from running in favour of White in respect of the said mortgage. It was contended that Howie was a stranger to White's mortgage and therefore any payment made by him could not save limitation. Their Lordships negatived this contention and held that that view was quite inconsistent with the terms of the contract

by which Howie was bound to pay the debt and was expressly named as a person entitled to come in and work a defeasance of White's conveyance.

17. The observations of their Lordships are very significant and instructive on the construction of the Statutes 3 and 4 Will IV, C. 27, Sections 40 and 42. After referring to the case in Chinnery v. Evans (1864) 11 H.L.C. 115, Lord Hobhouse remarked as follows at page 646:

They consider that money brought in by a stranger to the mortgage contract would not have the characteristics or legal quality of payment; it would be a gift from a person not entitled to tender it to a person not entitled to demand it . In this case their Lordships think it sufficient to say that payments made by a person who under the terms of the contract is entitled to make a tender, and from whom the mortgagee is bound to accept a tender of money for the defeasance or redemption of the mortgage, are payments which by Section 30 give a new starting point for the lapse of time. And Howie was clearly such a person.

18. In another portion of the judgment, he observed as follows:

Their Lordships have not been referred to any case where it has been decided that payments made by some person concerned to answer the debt has been held to be insufficient to keep a right alive against the party charged in the suit merely because, he was not that party or his agent.

19. It is clear in what sense their Lordships used the words 'person concerned to answer the debt'. Howie was the principal debtor as between himself and White and was concerned to answer the debt. It seems to follow from this decision that if a stranger to the contract were, to make the payment it can only be supported on the ground of agency; otherwise the payments made by him could not save limitation. As their Lordships clearly say, the payment made by such a stranger would not have the characteristics or legal quality of payment. This was the state of the English law till Bradshaw v. Widdington (1902) 2 Ch. 430. As that case formed the subject of considerable discussion at the Bar, we shall state what the facts of that case are and what the scope of that decision is. On 1st August 1879, J.E. Bradshaw executed a mortgage of Fair Oaks estate in favour of one Moss to secure 5171-14-6 with interest thereon at 4 per cent, per annum. The money was borrowed to oblige the son William Bradshaw who on the same day. executed in favour of his father a bond for . 10,000 which was conditioned to become void upon payment by William Bradshaw to his father the said sum of . 5171-14-6 with interest. On 16th September 1887, J.E. Bradshaw died appointing his son William Bradshaw and one Harrison as his executors.

20. Harrison was the solicitor who acted for all parties in the said transaction, and subsequently acted for the executors of J.E. Bradshaw and also for William Bradshaw. Interest on the mortgage debt was paid by Harrison down to the date of his death in 1889 and it was found that it was paid on behalf of William Bradshaw because it was found in the accounts maintained by the solicitor that the payment of interest was charged to the estate of William Bradshaw. The father during his lifetime in 1884 conveyed this estate free from encumbrances to his son, J.C. Bradshaw. As the mortgage in favour of Moss remained undischarged, notice was given to J.C. Bradshaw to pay the mortgage debt and thereupon J.C. Bradshaw commenced a suit for a declaration that the mortgage must be deemed to have not subsisted on the ground that it was long ago barred as any payment towards interest by or on behalf of William Bradshaw could not save limitation. It was held that the mortgage was subsisting by reason of the payments made by or on behalf of William Bradshaw. Buckley J. stated the principle which according to him should be applied thus:

Now looking upon it upon principle, in the first instance, apart from authority, it seems to me that all principle and common sense lead to the conclusion that it is sufficient that the payment be made by a person, who as between himself and the mortgagor is bound to pay. You have to see whether the mortgagor has made an admission. That is the basis of it all : Bradshaw v. Widdington (1902) 2 Ch. 430 .

21. After remarking that he was not able to-put his hand upon a case in which that exact point has arisen, the learned Judge proceeded to justify his conclusion from three decisions, namely Chinnery v. Evans (1864) 11 H.L.C. 115, Harlock v. Ashberry (1882) 19 Ch. D. 539 and Lewin v. Wilson (1886) 11 A.C. 639. He said that the statute would be justified if the payment was made by the person entitled to pay; not a person bound as between himself and the mortgagee but a person as between himself and mortgagor. He concluded the judgment thus:

For the present purpose I am assuming that William Bradshaw was not his agent. Assuming that he was not his agent, still it was made by William who was, I think, as between himself and his father, the person who was bound to pay. In as much as that was so, William's payment, made in pursuance of his contractual obligations towards his father, was, it appears to me, his father's admission of liability.

22. It will be seen from a perusal of the judgment of Buckley J. that he rests his decision both on the ground that the son is an agent of the father and also apart from the question of agency. The decision on the basis of agency is intelligible enough by reason of the contract between the father and the son; the father put forward the son to act for him in the matter of payment of the debt. But apart from the question of agency, it is difficult to understand how the payment made by William Bradshaw could be a legal payment to use the language of the Judicial Committee in Lewin v. Wilson (1886) 11 A.C. 639. When Buckley J. says that William Bradshaw's payment made in pursuance of the contract was his father's admission of liability, it is tantamount to saying that William Bradshaw made an admission on behalf of his father which brings in the question of agency. Therefore it is difficult to divest the notion of agency from the observations of Buckley J. himself. At p. 437, Buckley J. remarks thus:

If the mortgagor has himself paid, or whether he has called upon somebody else and bound somebody else towards him to pay and that person has paid, equally, as it appears to me, the mortgagor has made an admission. That is how I regard it upon principle.

23. If A calls on B to pay for him, A authorizes B to make the payment for him. B therefore acts as A's agent in making the payment. On the general principles of law, a person can be bound by his own admissions or admissions made on his behalf by someone who is authorized to make it whether expressly or impliedly. If, by reason of contractual relationship, another man is put forward to do an act for him, it would be a question of implied agency. The authorization may also result by operation of law as in the case of a receiver. Apart from agency, it is impossible to bind one man by the admissions of another. I think Farwell J. puts the correct legal position, if I may say so with respect, when he remarked as follows on the scope of the decision in Bradshaw v. Widdington (1902) 2 Ch. 430:

I read it as a decision on the words 'or agent' and as shewing that a man can be an 'agent' within the meaning of the Act, not only when he acts for a principal properly so called but also when he makes the payment on behalf of the debtor, because he has bound himself by deed for value so to do. I think that the case proceeds on the same reasoning as Lord Wensleydale's judgment in (1853) 8 Ex 71616 as explained by Chitty 3. in Dibb v. Walker (1893) 2 Ch. 429.

24. In Forsyth v. Bristowe (1853) 8 Ex. 716 the question was whether a payment by an assignee of equity of redemption would save the operation of the statute. After holding that it would, Parke B., held that the assignee in that case could be deemed to be an agent of the mortgagor because he covenanted to pay the debt. He therefore inferred an agency by reason of the said covenant. Again, the three decisions referred to by Buckley J. when examined do not support the broad proposition laid down by him that apart from the question of agency a person who became liable to the mortgagor (debtor) to pay the debt will be a person liable to pay the debt within the meaning of the statute. Chinnery v. Evans (1864) 11 H.L.C. 115, as already explained, was a pure case of agency. But what Buckley J. relies on in support of the proposition which he was enunciating was a passage from Lord Cranworth's judgment which runs thus:

The payments in this case were not payments by a stranger; for though a receiver appointed under the Irish statute is an officer of the Court, yet he is certainly no stranger to the mortgagor; but a person paying for him and on his account what he is bound to pay.

25. On this Buckley J. makes the following comment:

The context in which that language occurs is this: if a mere stranger to the whole transaction, to both mortgagor and mortgagee comes and pays, that is not an admission at all; if a mere outsider, a stranger to both comes and pays, that is no admission; but if a person who is not a stranger to the mortgagor (that is what Lord Cranworth says) comes and pays, that will do for the purposes of the statute.

26. It is not possible to understand how the statement of Lord Cranworth supports Buckley J. When Lord Cranworth says that the receiver is not a stranger to the mortgagor, what the learned Lord means is he was the agent of the mortgagor. That is plain from the language 'a person paying for him and on his account'; that is, acting as an agent. The learned Lord does not say that any person who is a stranger to the mortgage contract or to the mortgage transaction apart from any question of agency can make a payment which would be a legal payment for the purpose of the statute. Then Buckley J. relies upon the observations of Jessel, Master of Bolls in Harlock v. Ashberry (1882) 19 Ch. D. 539. The observation relied on is this:

On principle and on authority I think that the payment to take the case out of the statute must be a payment by a person who is bound to pay the principal or interest of the mortgage money and this is not such a payment.

27. There Jessel M.R. was dealing with the case of a tenant paying rent to the mortgagee. It was held that the payment by the tenant cannot be said to be payment by a person liable to pay because as observed by Jessel M. R. it was not a payment on behalf of a mortgagor but simply a payment which a tenant as tenant is bound to make. The learned Judge in the passage relied on was referring to the case of a receiver in Chinnery v. Evans (1864) 11 H.L.C. 115 as a person who under the law was bound to make the payment as the agent of the mortgagor and on his behalf. In view of the pronouncement of Jessel M.R. himself in Cockburn v. Edwards (1881) 18 Ch. D. 449 as to the scope in Chinnery v. Evans (1864) 11 H.L.C. 115 it cannot be said that Jessel M. E. was understanding the said case differently in Harlock v. Ashberry (1882) 19 Ch. D. 539. Again Buckley J. relies on the following observations of Brett L.J. in Harlock v. Ashberry (1882) 19 Ch. D. 539:

On the ordinary rules of construction, and on the authority of Chinnery v. Evans (1864) 11 H.L.C. 115, I feel bound to say that a payment, to come within 1 Vict. C. 28 must be a payment by a person liable as mortgagor or. some person on his behalf or such a person as was the receiver, a person entitled to pay on his behalf.

28. Buckley J. deduces from this a principle that the person entitled to pay on his behalf must be a person entitled by reason of the relations between himself and the mortgagor to pay money on his behalf. If that were so, it does not support the proposition of Buckley J. namely, that the person bound to pay is not a person as between himself and the mortgagee but a person bound as between himself and the mortgagor. What Brett L.J. said was that a person to make the payment must be such a person as the receiver who as described by Lord Westbury was a legal agent. The class of persons mentioned by Brett L.J. would be persons like the guardian of an infant, vide Annappa Gauda v. Sangadiappa ('02) 26 Bom. 221, the Court of Wards making payment on behalf of the ward, Beti Maharani v. Collector of Etavah ('95) 17 All. 198, and the committee of a lunatic on behalf of a lunatic. All these persons would be legal agents entitled to act as agents for the mortgagor as the receiver in Chinnery v. Evans (1864) 11 H.L.C. 115. The other case relied on by Buckly J. is Lewin v. Wilson (1886) 11 A.C. 639 where Lord Hobhouse referred to the case of a person concerned to answer the debt. In that case Howie was the principal debtor under the original contract by which the debt was borrowed. Further in one sense he can be termed as agent for White because he was designated in the mortgage contract itself as the person from whom the mortgagee could receive a tender and Howie could therefore act for White. Therefore there was no warrant in any of the cases relied on by Buckley J., for the proposition which he laid down. When the matter went up to the Court of appeal, Collins M.R. practically rested his decision on the question of agency. This is clear from the following passage in his judgment:

The payment must be one which will operate as an acknowledgment by the mortgagor of the subsistence of the security.... That acknowledgment results as much when there is an arrangement between the mortgagor and a third person, either by a contract or by a mere mandate, that that person shall make the payment for him. Whether the person who makes the payment does so under an obligation imposed upon him by law as a legal agent without his assent, or whether he is appointed under some arrangement with the mortgagor, so long as he pays with the assent, expressed or implied, of the mortgagor, the payment as it seems to me, will keep alive the liability of the mortgagor, being in point of law an admission by him of the subsistence of the security.

29. The only question therefore is that if the payment by defendant 4 could be justified it could only be on the ground that by virtue of the contract contained in Bx. C, he must be deemed to be an agent for Jaya Rao and if he is deemed to be an agent, the part payment must be within the scope of his agency. As already indicated by me he was only an agent to extinguish the debt and not to keep alive the debt. Whatever may be the justification for the interpretation placed by Buckley J. on the words 'person liable to pay' in the English statute, the question is, does the Limitation Act warrant that interpretation. The relevant section of the Indian Act is Section 20, Limitation Act, which runs thus:

Where interest on a debt or legacy is before the expiration of the prescribed period paid as such by the person liable to pay the debt or legacy, or by his agent duly authorized in this behalf, or where part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor or by his agent duly authorized in this behalf, a fresh period of limitation shall be computed from the time when the payment was made.

30. It will be seen that this section makes no difference between a simple contract debt and a specialty debt or a debt charged on land like the English statutes. In regard to the payment of interest, it is stated that the person by whom the payment should be made is the person liable to pay the debt; in the case of part-payment of a principal the person by whom the payment should be made is the debtor or his agent. The question is what is the interpretation to be placed upon the words 'person liable to pay.' So far as the part payment of principal is concerned, the section specifically says, 'the debtor.' Literally construed, it would mean the person who contracted the debt. We do not think that the Legislature intended by the use of the word 'debtor' to have that restricted interpretation. It would seem to us that the word debtor' was intended to connote not only the person who contracted the debt but his legal representative and in the case of a debt charged on land the person who derived title from him; in short the person who can be rendered liable for the debt by the creditor, that is, the person against whom the debt can be enforced. That is, the liability need not be personal in the sense of being liable to be arrested; it may be proprietary; that is, liability arising from the possession of property; Askaram Sowcar v. Venkataswami Naidu ('21) 8 A.I.R. Mad. 102, Parthasarathy Iyengar v. Ekambara Mudaliar ('38) A.I.R. 1938 Mad. 579. We do not think that the Legislature intended to draw a distinction between the payment of interest and the payment of principal in saving limitation. If the history of this section is taken into consideration it would seem to be clear beyond doubt that it was hardly in the contemplation of the Legislature to draw any such distinction or to warrant the interpretation placed on the English statute of Buckley J. The first Limitation Act introduced by Legislature was Act 14 of 1859. The only provision relating to acknowledgment was Section 4 of the Act which ran thus:

If in respect of any legacy or debt, the person, who, but for the law of limitation, would be liable, to pay the same, shall have admitted that such debt or legacy or any part thereof is due, by an acknowledgment in writing signed by him, a new period of limitation, according to the nature of the original liability, shall be computed from the date of such admission.

31. Under that section it will be seen that the operation of the statute of limitation is suspended only in cases where there has been an acknowledgment in writing signed by the person liable to pay. It would be seen that neither an acknowledgment by an agent would save limitation nor a part payment of principal or interest would keep alive the debt. It was a deliberate departure from English law. This Act was replaced by Act 9 of 1871 and Section 4 of Act 14 of 1859 has been replaced by Sections 20 and 21; Section 20 related to acknowledgment and the change that was effected was that acknowledgment should be by the party to be charged therewith or by his agent. So far as part payments are concerned they were provided by Section 21, which runs thus:

When interest on a debt or legacy is, before the expiration of the prescribed period, paid as such by the person liable to pay the debt or legacy, or by his agent generally or specially authorized in this behalf, or when part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor or by his agent generally or specially authorized in this behalf.

32. This section has in substance been retained in all the subsequent Limitation Acts. These sections were modelled on English law then prevailing at the time and as declared by Roddam v. Morely (1857) 1 De G & J 1, Bolding v. Lane (1863) 1 De G.J. & S. 122 and Chinnery v. Evans (1864) 11 H.L.C. 115 : see the introduction to the Limitation Act of 1877 by Whitely Stokes at page 945 in Volume 2 of his Anglo Indian Codes. Under the English Statutes 3 and 4 Will. IV, C. 27 and 42 no difference was made between payment of interest and part payment of principal in regard to their legal effect on the suspension of the operation of the statute. We have already shown what interpretation was placed upon the words 'person liable to pay' in the English statutes. We do not think any different interpretation was intended to be placed by the Indian Legislature in enacting either Section 20 or Section 21 and this derives considerable support from the deliberate use of the word 'debtor' as the person by whom part payment of principal should be made. The expression 'person liable to pay' is used in Clause 1 of the section with reference to payment of interest apparently as suggested by Mitra in his valuable commentary of the Limitation Act for the purpose of having a common expression for both debts and legacies because it would be incongruous to use the expression 'debtor' with reference to a person liable to pay a legacy : vide 1909 Vol. 2 p. 819. Therefore the expression 'person liable to pay the debt' must also connote the debtor or person liable to be charged with the debt. That both the person liable to pay the debt and the debtor must mean the same thing seems to be suggested by the judgment of Jenkins C.J. in Annappa Gauda v. Sangadiappa ('02) 26 Bom. 221 where the learned Judge had to consider the position of a guardian in regard to acknowledgment made by him on behalf of his ward. The learned Judge considered him to be a legal agent just like an agent in Chinnery v. Evans (1864) 11 H.L.C. 115 and held that the payment made by a guardian would save limitation and he would be the ward's agent duly authorized within the meaning of Section 20. In the course of the judgment he considered whether the guardian would be personally liable to pay the debt and he held that he would not, observing thus:

The guardian is not a person liable to pay the debt within the meaning of the section, and this, I think, is made clear by the use of the word 'debtor' in the latter part of the section.

33. This observation seems to suggest that in view of the learned Judge the word 'debtor' and the expression 'the person liable to pay the debt' were intended to convey the same moaning. Whether this view is correct or not, we are clearly of the opinion that the expression 'the person liable to pay the debt' in Section 21, Limitation Act of 1871 and Section 20, Limitation Act of 1908 cannot bear the interpretation put on the corresponding expression in the English statute by Buckley J. Therefore, apart from any question of agency, defendant 4 would not be a person liable to pay the debt within the meaning of Section 20, Limitation Act. The remaining question is whether there has been a valid ratification by Jaya Rao of the payments made by defendant 4. When the payment was made by Jaya Rao he had already alienated the property in favour of defendants 5 to 8 and whatever may be the effect of such a ratification on Jaya Rao or his sons defendants 1 to 3, the ratification could not be hold to operate to the prejudice of the alienees, defendants 5 to 8. Mr. Sitarama Rao has relied on Section 200, Contract Act, and contended that under that section the ratification could only be deemed invalid if it had the effect of subjecting a third person to damages or of terminating any right or interest of a third person and the ratification by Jaya Rao did not have that effect so far as defendants 5 to 8 are concerned. We are not inclined to agree with this contention of Mr. Sitarama Rao. The provisions of the Contract Act relating;to agency are not meant to be exhaustive. We do not think that Section 200, Contract Act, or the other provisions relating to ratification affect the [general principle of law of agency that the 'general rule as to ratification would not apply when it would affect the rights of other parties : vide the observations of Channel J. in Ford v. Newth (1901) 1 K.B. 683 . In Halsbury's Laws of England Vol. 1 p. 181, the rule is thus stated:

A ratification...does not relate back when persons other than the co-contracting party have acquired interests prior to ratification.

34. It cannot be denied that so far as the alienee defendants are concerned, Jaya Rao lias parted with his interest long before the date of the ratification. Therefore the ratification made by Jaya Rao would certainly affect their rights and put the property in their hands to peril. But it seems to us that it is open to the defendants to contend that the ratification would terminate their right or interest within the meaning of Section 200, Contract Act. On the date of the ratification the right to enforce the mortgage was barred by limitation. The defendants have there fore acquired a valuable right to plead the statute. The effect of the ratification would be to terminate that right. Again, the ratification would have the effect of terminating the interest of the alienee defendants in the property alienated to them because it would be liable to be sold by reason of the mortgage debt being kept alive. We are therefore prepared to hold that the alleged ratification is not binding on defendants 5 to 8.

35. Even as against defendants 1 to 3 the ratification would be of no avail. It is settled law that a father has no right to acknowledge a barred debt so as to keep it alive against his son. He has no right to validate an acknowledgment unauthorisedly made by an agent by ratifying it and keep the debt alive. So far as Jaya Rao is concerned, the ratification must be deemed to be valid. As we have already stated, defendant & was acting as the agent of Jaya Rao in making the payments and thus admitting the debt though in excess of the authority conferred upon him. It is open to Jaya Rao to ratify the unauthorized acts of an agent. Therefore the decree of the learned Judge must be modified by giving a mortgage decree in favour of the plaintiff for the amount claimed against the interest of the mortgagor in the mortgaged properties leaving the extent of his interest open other than those alienated to defendants 5 to 8 to the extent of the interest of the alienees therein. Time for redemption three months. Subject to this modification the appeal fails and is dismissed with costs of respondents 5, 7, 9 to 11, one set.

Civil Miscellaneous Petitions Nos. 4852 and 4853 of 1939.

36. Two applications are filed, one by Mr. Veeraraghavan on behalf of defendant 4 and another by Mr. Aravamudha Ayyangar on behalf of defendants 2 and 3 under the Madras Agriculturists Relief Act. These petitions will be sent down to the lower Court for inquiry and the decree we have passed herein will be subject to any relief that the lower Court may order on those applications. The plaintiff-respondent will be entitled to file his counter-affidavit stating his objections to the petitions filed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //