A. VENKU DIKSHITULU Vs. GUNDU SUBBAYYA SETTI
LAWS(APH)-1955-4-16
HIGH COURT OF ANDHRA PRADESH
Decided on April 15,1955

A. Venku Dikshitulu Appellant
VERSUS
GUNDU SUBBAYYA SETTI Respondents


Referred Judgements :-

CHINNERY V. EVANS [REFERRED TO]
ASKARAM SOWKAR V. VENKATASWAMI NAIDU [REFERRED TO]
MADRAS HIGH COURT IN CHOCKALINGA MUDALI V. MANICKA MUDALI [REFERRED TO]
KRISHNAYYA V. SEETARAMAYYA [REFERRED TO]
MANGAPATHI NAIDU VS. M K KRISHNASWAMI NAIDU [REFERRED TO]
BHUBAN MOHAN SINGH VS. RAMGOBINDA GOSWAMI [REFERRED TO]
CURRIMBHAI ABDULHUSAIN VS. AHMEDALI LUKMANJI [REFERRED TO]
RAMANATHAN CHETTIAR VS. N.M.KANDAPPA GOUNDAN [REFERRED TO]
PONNATH KALYANI AMMAS SON EACHARAN NAIR VS. CHERIKKOTTIL SAYED ROWTHERS SON FAMILY MANAGER, CHINNAYYA ROWTHER (DIED) AND ANR. [REFERRED TO]


JUDGEMENT

Viswanatha Sastri, J. - (1.)THIS is an appeal by the Defendant from the decree of the Court of the Subordinate Judge, Kurnool, in O. S. No. 9 of 1950, filed: for the recovery of the amount due to the Plaintiff on a mortgage Exhibit A -l, dated 4th November, 1930, for Rs. 8,000 executed by the Defendant. The learned Subordinate Judge, who tried the suit, decreed the suit in favour of the mortgagee - for a sum of Rs. 5,962 -1 -10 with proportionate costs and subsequent interest. The Defendant -mortgagor has preferred this appeal and contends that the suit was barred by limitation and, secondly, that the amount due to the mortgagee was less than the amount decreed by the learned Subordinate judge.
(2.)THE facts necessary to appreciate the contentions of the Appellant are these. The Defendant entrusted the mortgage Exhibit A -l for Rs. 8,000 on 4th November, 1930. This was relied upon as an act of insolvency committed by the Defendant and he was adjudged insolvent on 29lh December, 1931, in I. P. No. 73 of 1931. The Insolvency Petition was filed on 2nd February, 1931. AFTER the order of adjudication, the Official Receiver, in whom the estate of the insolvent vested, applied to the Court and got the mortgage debt scaled down to Rs. 6,220 as on 1st October, 1937' with interest at 0 1/4 per cent thereafter. The Official Receiver applied to the Insolvency Court in M. P. No. 204 of 1940 for permission to sell a house in done in order to pay off the mortgage debt due to the Plaintiff. The requisite permission having been granted, the Official Receiver sold the property and paid a sum of Rs. 2932 -6 -8 towards the mortgage debt on 2nd July, 1940. He also made an endorsement of part payment on the mortgage deed Exhibit A -1 in those terms:
As ordered by the District Court in Dis. No. 2256, dated 29th June, 19 -10, in I. P. No. 73 of 1931 (1. P. No. 20 of 1932, O. R.) in M. P. No. 204 of 1940 District Court (a sum of rupees two thousand, nine hundred and thirty -two, annas six and pies eight) Rs. 2,932 -6 -8 was paid by cheque No. 156563, Book No. 1566, dated 2nd July, 1940, to Gunda Subbayya Chetti, die mortgagee.

The adjudication of the Defendant was annulled on 17th February, 1948, he having paid all his simple money creditors by that date. No further payment than the one made by die Official Receiver was made towards the mortgage and the mortgagee brought the present suit on 9th January, 1950, to enforce his mortgage.

It was argued by Sri S.V. Venugopalachari, learned advocate for the Appellant, that the payment made to the mortgagee on 2nd July, 1940 and the endorsement of payment made by the Official Receiver was an open payment and not a payment towards interest as such and having been made before S. 20 was amended, it did not give a fresh starting point of limitation for a suit on the mortgage. In Mangapathi Naidu v. Krishnaswami Naidu, ( : 1950 -1 MLJ 107:AIR 1950 Mad 762) (A), I had occasion to consider the effect of the amendment, of ' Section 20 in 1942 and I was of the opinion that the amendment of Section 20 of the Limitation Act operated retrospectively upon payments and endorsements made before it came into force, though such payments and endorsements were of no avail on the date when they were made. This view was accepted by a Bench of the Madras High Court in Ramanathan Chettiar v. Kandappa Goundan, : 1950 2 Mad LJ 624 : (AIR 1951. Mad 314) (B), where it was held that the law of limitation being procedural law, its provisions operated retrospectively in the sense that they applied to causes of action which arose before their enactment and that open payments made towards a debt prior to the amendment of Section 20 of the Limitation Act by the Amending Act 16 of 1942, would save the debt from the bar of limitation if its recovery had not become barred prior to die coming into force of the amendment. Following these two decisions, I am of the opinion that the payment and endorsement made by the Official Receiver in die present case enough ineffective under Section 20 of the Limitation Act as it stood at the time when the payment was made would save the suit from the bar of limitation.

(3.)THE next contention of the learned advocate for the Appellant was that part payment by die Official Receiver was inoperative to save limitation under Section 20 (1) of die Limitation Act inasmuch as the Official Receiver was not "a person liable to pay" the mortgage debt and was not a duly authorised agent of the mortgagor who alone was the person liable to pay the mortgage debt. In my opinion, this contention is also untenable. The words "a person liable to pay" in Section 20 (1) of the Limitation Act are words of wide import, not necessarily confined to a person who is personally liable under his covenant or promise to pay the debt.
The words are wide enough to cover property liability also. In Askaram Sowkar v. Venkataswami Naidu, ( : ILR 44 Mad 544: AIR 1921 Mad 102) (C), it was held by the Madras High Court that the purchaser of the equity of redemption was a person liable to pay the mortgage debt within the meaning of Section 20 of the Limitation Act and that, though he was under no personal liability to pay the mortgage debt still if he did make a payment of interest as such, such payment gave a fresh period of limitation for enforcing the mortgage. This decision was followed by the Calcutta High Court in Bhuban Mohan Singh v. Ram Gobinda Goswami, ( : ILR 54 Cal 179:AIR 1926 Cal 1218) (D).

In both the decisions cited above, reliance was placed on the decision in Chinnery v. Evans,, (1864) 11. HLC 115 (E), and it was held that the words "the person by whom the debt is payable'' occurring in the corresponding English statute were words of extensive meaning and would comprehend not only the mortgagor and his personal representatives upon whom the mortgage would be personally binding, but would also include second and third mortgagees who took subject to the first mortgage and who might therefore, with propriety, be described as persons by whom the debt was payable.

under Section 28 of the Provincial Insolvency Act, on the making of an order of adjudication the whole of the property of the insolvent vests in the Official Receiver who has power under Section 59 of the Act to sell, mortgage or pledge the whole or any part of the property of the insolvent; raising' money for the payment of his debts and do all other acts as may be necessary for the purpose of realising the properly of die debtor and distributing die net assets among the creditors. The position of the Official Receiver is not analogous to that of a de facto guardian or a mere manager or custodian of die property but is that of a person in whom the title to die property of the insolvent vests. In my opinion, the Official Receiver in whom the estate of the mortgagor vested on his adjudication comes within the description of "a person liable to pay" the mortgage debt within the meaning of Section 20 (1) of the Limitation Act.

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