1. In this suit the plaintiff is seeking a decree for some Rs. 16,000 odd against two defendants. The two defendants are father 'and son and are a joint family. Mr. Rajagopalan has appeared for defendant 1, the father, and, if I may say so, has most ably argued all matters arising on behalf of his client and with refreshing brevity. The defence is now so far as both defendants are concerned one of limitation and limitation only. At one time it was on behalf of defendant 2 suggested that debt was incurred by his father, defendant 1, in matters arising out of speculation and wagering. That was dissipated very quickly when the evidence which was called on behalf of defendant 2 was given from the witness box.
2. It is necessary for me to refer to a number of dates and circumstances going back prior to the year 1917. Defendant 1 carried on business as a yarn merchant and the plaintiff had an interest in that business of four annas. The profits there from at one period were very large amounting to, I was told, some lakh or more rupees a year although the amount invested to commence the business was small but by the year 1917 apparently the business was not as flourishing as before. There was a suit, C.S. No. 95 of 1917, brought by the present plaintiff against defendant 1 for taking of partnership accounts, the result of which was a decree in favour of the plaintiff for approximately Rupees 1,10,000. By the year 1925 there had been paid something over Rs. 80,000 in respect of that decree and there was then remaining due Rs. 42,000 odd.
3. This decree was against defendant 1 alone. Defendant 2 was of very tender years in 1917 and at the time of the circumstances I am about to refer to, namely 1925, he was still a minor. On 23rd December 1925, there was executed by defendant 1 for himself and on behalf of his infant son, defendant 2 an indenture of mortgage. In this deed there are a number of recitals to which I propose not to refer in detail but the effect is that the plaintiff forewent over Rs. 17,000 and thereby the debt due amounted to the round figure of Rs. 25,000. In the above mentioned deed it is recited that this was at the instigation and through the intercession of mutual friends. It must be remembered that at this time the plaintiff was possessed of a decree which he could execute in any way available to him, to reap the fruits of the decree. The indenture of mortgage provides that defendants 1 and 2, defendant 2 becoming a party to this deed, Undertook and agreed to pay to the plaintiff on demand the sum of Rs. 25,000 and the mortgage deed charged in favour of the plaintiff four immovable properties and certain moveable properties mentioned in the schedule.
4. In regard to the immovable properties another mortgagee had a first mortgage existing. The plaintiff upon the execution of the mortgage and it was made a condition of that deed-was required to enter up in this Court, from which the decree in C.S. No. 95 of 1917 was then existing, that there had been full satisfaction which in course of evidence, I was informed, had been done. The indenture proceeds to provide that the plaintiff will not execute any decree which he might obtain in respect of this mortgage deed by the arrest and detention in prison of either of the defendants and then it proceeds to provide that if the plaintiff was unable to receive as much as Rs. 20,000 Under the mortgage deed he should be entitled to recover the deficit plus an amount due in respect of interest by the institution of legal proceedings and taking steps in execution for the attachment of the properties which were then owned by defendants 1 and 2 except the trade assets and stock-in-trade of these parties in any business carried on by them and also in regard to their moveable properties but not to obtain an order for the arrest or detention of the defendants. There was a proviso which declares that after the expiration of three years from the date of the mortgage deed the plaintiff should be entitled to have recourse to and proceed against their assets and stock-in-trade and moveable property of defendant 1 for the purpose of recovering any balance due to the plaintiff up to Rs. 20,000. And the document declared that the debt was binding upon defendant 2. As I said, at that time the plaintiff was possessed of a decree which he could have executed at any moment. But instead of doing so, he enters into this mortgage deed with the two defendants and the question which I have to decide in regard to this deed is whether the amount payable thereunder, viz. Rupees 25,000, became payable forthwith upon execution of the deed or whether that amount became payable upon the happening of the contingency viz. the demand by the plaintiff upon the defendants to pay him that sum or any sum outstanding. The words 'on demand' are used in the deed at page 3 and the deed says and the mortgagors covenant with the mortgagee that they, the mortgagors will pay the mortgagee on demand the said sum of Rs. 25,000.
5. It is conceded that ordinarily the words on demand' mean forthwith and in order to ascertain whether those words shall have imported to them the meaning which prima facie they bear, this must depend upon the tenor of the whole document itself. In Secy, of State v. Radhika Prasad Bapuli (1923) 10 A.I.R. Mad 667 Sir Walter Schwabe C.J. at 289 says:
The question to be considered is whether the words 'on demand' are mere words, or whether looking at the whole document it is really intended that the demand should be made before the liability to pay arises.
6. As I pointed out, the words 'on demand' are used. Also in an earlier part of the deed there appears this
subject to the terms and conditions hereinafter stated in order to secure the payment of the amount which will be due to the mortgagee Under the said decree,
7. the decree of course referring to the decree I mentioned. The words 'will be' to my mind import the future and not the present. And then when later on the document says,
that in consideration of the said sum of Rs. 25,000 due as aforesaid (that is to say, will be due from the defendants) and pursuant to the agreement and in consideration thereof the mortgagors agree and covenant with the mortgagee that they, the mortgagors will pay the mortgagee on demand the said sum of Rs. 25,000,
to my mind reading these together it seems that the money which is payable in future is covenanted to be payable when demanded of them and not before. Although the plaintiff at that time was the holder of a decree he had not then any security in respect of the assets of either defendant 1 against whom the decree was made or of course defendant 2 who was not a party to that earlier suit. By this mortgage deed he obtained security, although it may not have been of the highest value it was security, and it does seem to me, looking at the circumstances and considering the document as a whole that when a person such as the plaintiff being in the position immediately to execute Under a decree accepts this deed in discharge of the decree and in the deed he receives security, the object to my mind was to give time and by giving time to adopt the position that the money was not then to be immediately payable but was to be paid according to the conditions set out in the deed, viz. when demand was made upon the defendant to pay. It is necessary for me to refer also to matter that transpired in 1927. As I have said the plaintiff obtained a second mortgage upon four immovable properties. In. 1927 there was no doubt negotiations. However an arrangement between all the parties seems to have come about by which first of all the first mortgagee took three of the properties to which I have referred free of all encumbrances and the plaintiff took the remaining fourth property also free of all encumbrances; this fourth property was conveyed to him by a sale deed dated 29th April 1927. The property was-valued at Rs. 9000 and this sale deed conveyed the fourth property to the plaintiff and at page 2 of the deed I find this:
As part payment towards the aforesaid principals amount due to you, we have agreed to sell the properties described in the under mentioned schedule to you for Rs. 9000. We have this day sold to you the aforesaid property for Rs. 9000 and endorsed the payment of the aforesaid entire sale amount of Rs. 9000 as part payment towards the aforesaid principal amount due to you and have also taken a receipt from you.
8. That document was registered on 22nd August 1927, and at the registration the plaintiff and defendant 1 were present and appeared before the Registrar. Defendant 1 signed on behalf of himself and defendant 2' on the back of the first page of the sale deed and acknowledged that the sale deed itself had been executed by him. Mr. Rajagopalan has admitted if I may say so quite properly and thereby saving a lot of time, the; signature of his client, defendant 1, at the back of that sale deed. One further fact to which I desire to refer is the letter or notice; which was sent by the plaintiff's legal adviser to the two defendants on 4th August. 1933. That is a notice calling upon the defendants to pay the amount to the plaintiff which was outstanding under the mortgage deed of 23rd December 1925, in other words demanding the amount payable Under the mortgage deed. With regard to-those two notices I am perfectly satisfied, they reached the hands of the defendants. They were sent to each defendant, two-copies, one by registered post and one by ordinary post to defendant 1's address with, whom was living defendant 2. The registered letters were both refused but the unregistered letters of which I have seen the certificate of posting were never returned through the Dead Letter Office. As I have said at the outset, the defence now is only one of limitation and it is conceded that the period of limitation which applies in this suit is one of six years. The suit was filed on 14th August 1933. The mortgage deed being dated 23rd December 1925 more than six years had elapsed from its execution to the initiation of the suit and if the moneys payable had been payable forthwith, it is obvious that the period of limitation Under the Limitation Act would have run which will have prevented the plaintiff succeeding. Firstly, as I have already indicated, in my view that mortgage deed was one which was not forthwith payable, the principal moneys payable by the deed to the plaintiff were not payable unless and until demand was made. Demand not having been made until 4th August 1933 by the letter to which I have already referred, it was not until that date that the principal moneys became payable and the suit having been filed on 14th August for this reason in my view the plea of limitation does not avail.
9. It is further contended by and on behalf of the plaintiff that the matter is saved further from the plea of limitation in this way. In the sale deed of 29th April 1927 there appears this: 'As security for the sum of Rs. 20,000 due to you out of the amount due under a Decree No. 95 of 1927'. That is a deed, to which both defendants were parties, addressed to the plaintiff and it is said that it is an acknowledgment on that date of the amount due to the plaintiff under the mortgage deed. That sale deed having been registered on 22nd August 1927 and there was made by defendant 1 the admission of execution to which I have already referred, it is said that such admission of execution i.e. admitting the signature to the deed itself and the deed itself acknowledging the debt due under the mortgage deed, the admission of execution which is made on 22nd August 1927 is an acknowledgment taking the matter out of the Limitation Act and preventing the plea of limitation availing. Mr. Rajagopalan contended that the acknowledgment before the learned Registrar was merely one of execution only and nothing should be inferred from such an acknowledgment, save that there was the acknowledgment of the execution of the deed sufficient to justify the learned Registrar registering the deed in accordance with the Registration Act. In his usual fair way, as Mr. Rajagopalan always is, he placed before me all the authorities. One is the decision in Labha Mal v. Imam Din (1923)10 A.I.R. Lah 369 in the Lahore High Court the head-note of which is this:
An endorsement on a mortgage deed by a Sub-Registrar signed by the mortgagor in which the latter admits the receipt of consideration for the mortgage amounts to an acknowledgment of liability within the meaning of Section 19, Lim. Act.
10. The other is the case in this Court reported in Rosayya v. Pitchayya (1933) 20 A.I.R. Mad 713 a decision of Ramesam and Cornish JJ. The same point was before those learned Judges and the decision is embodied in the head-note:
Where a person executed a mortgage bond and registered it on 9th September 1909 for himself and on behalf of a minor as guardian and made an endorsement on 18th July 1915 of some payment on the document, when the minor had not attained majority, his acknowledgment was proper as he certainly was a person authorized Under Section 21, Lim. Act. Therefore his acknowledgment of 1915 was binding on the person on whose behalf he acknowledged and a decree against him could be given.
11. When a document is presented for registration, the executants not only admit the fact of its execution but admit the contents of the document, namely their liability upon it. Hence if a person admitted before the Sub-Registrar execution of a mortgage bond which recites that old accounts had been looked into and the sum arrived at had remained due, his acknowledgment of liability was implied.
12. It is true as Mr. Rajagopalan points out that Ramesam J. says in the course of his judgment at p. 383:
It is not necessary to deal with possible cases where there may be some difficulty in making such an implication.
13. The implication being acknowledgment of liability. But turning to the facts of1 this case, defendant 1, one of the makers of the sale deed of 29th April 1927 was a party, not only on his own behalf but on behalf of his infant son, appeared before the Registrar and acknowledged the proper execution of the sale deed the previous April and thereby in my view he admitted not only the execution but all the matters set out in the deed itself. And that acknowledgment in writing on 22nd August is an acknowledgment which takes this case out of the provisions of the Limitation Act preventing a decree being given in favour of the plaintiff. Another contention was placed before me on behalf of the plaintiff in regard to the saving of this suit from the effects of the Limitation Act, but as I have already indicated the two contentions put forward with, which I have dealt are sufficient to save this suit from the provisions of the Limitation Act. I do not propose to deal with the third contention. The result is the only defence admitted by the learned Counsel on behalf of defendant 2 now being one of limitation that there will be a decree in favour of the plaintiff for a sum of Rs. 16,772-8-0 and costs and interest upon the principal amount at the rate of six per cent, from 14th August 1933 to date and upon the principal sum and costs and interest at the same rate until payment subject to the restrictions set out in the mortgage deed dated 23rd December 1925. So far as the decree against defendant 2 is concerned, it will be in respect only of the joint family property.