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CASE NO.:

Appeal (civil) 840 of 2000

PETITIONER:

Prabhakaran & Ors.

RESPONDENT:

M. Azhagiri Pillai (Dead) by LRs. & Ors.

DATE OF JUDGMENT: 20/03/2006

BENCH:

Arijit Pasayat & R. V. Raveendran

JUDGMENT:

J U D G M E N T

RAVEENDRAN, J.

This appeal by special leave is filed by the legal

representatives of the plaintiffs in a suit for redemption of

mortgage.

2. Brief facts necessary for disposal of this appeal are :-

2.1) One Manickam Pillai obtained a loan of Rs.300/- from

Krishna Pillai and mortgaged his property situated in

Prithivimangalam Village, Thyagadurgam Taluk, (for short 'the

suit property') in favour of the said Krishna Pillai under a

usufructuary mortgage deed dated 7.9.1935 (Ex.A-1). The deed

provided that mortgagee is entitled to be in possession of the

mortgaged property in lieu of interest till redemption.

2.2) The mortgagee (Krishna Pillai) assigned the said

mortgage in favour of one Soundararaja Iyenger (also known as

Soundararaja Achariar) under registered deed dated 12.2.1954

(Ex.A-3) by receiving Rs.300/- from the assignee and delivered

possession of the suit property to the assignee. The said

assignee, Soundararaja Iyenger died leaving him surviving his

widow Jayalakshmi Ammal and son Krishnaswamy Iyenger

(defendants 1 and 2 in the suit).

2.3) The mortgagor Manickam Pillai died some years after

executing the mortgage deed, survived by his widow and four

daughters. His widow and first daughter Kuppammal died

subsequently. The second daughter also died leaving behind her

son Thukkaram. His third daughter Yasodai Ammal and

Thukkaram settled their share/interest in the right of redemption

in favour of the fourth daughter of Manickam Pillai, namely,

Sakkubai Ammal (first plaintiff) under registered deed dated

24.8.1981. Before such gift/settlement, Thukkaram, Yasodai

Ammal and Sakkubai Ammal issued a notice on 21.8.1977 for

redemption of the mortgage. Defendants 1 and 2 sent a reply

dated 26.8.1977 refusing to comply on the ground that they

were not in possession of the suit property and one Azhagiri

Pillai (third defendant in the suit) was in possession of the

property. Thereafter, a notice dated 9.10.1977 was also sent to

Azhagiri Pillai who sent a reply dated 26.10.1977 repudiating

the claim and setting up an oral sale in his favour in December,

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1953/January, 1954.

3. The said Sakkubai Ammal filed the said suit - O.S.

No.1079/81 on the file of the District Munsiff, Kallakurichi on

16.11.1981 for the following reliefs : (i) a preliminary decree

for redemption of the usufructuary mortgage dated 7.9.1935 in

regard to the suit property, (ii) for an account in respect of the

income therefrom, from the date of discharge of the mortgage;

and (iii) for a final decree for redemption of the mortgage.

Plaintiffs contended that the mortgage and the right of

redemption were subsisting, in view of the assignment dated

12.2.1954 being an 'acknowledgement' and that the mortgage

debt stood discharged by Section 9 of the Tamil Nadu Debt

Relief Act, 1979 (for short 'the Debt Relief Act'). In the said

suit, Jayalakshmi Ammal and Krishnaswamy Iyenger (legal

heirs of the assigneee of the mortgage) were impleaded as

defendants 1 and 2. Azhagiri Pillai who was in possession,

either as a licensee or lessee of Soundararaja Iyenger, was

impleaded as the third defendant. As the said defendant had let

out the suit property to Raghamathulla Sahib and Mayava

Pandithan, they were impleaded as defendants 4 and 5.

4. Defendants 1 and 2 as also defendants 4 and 5 remained

ex parte. Only the third defendant, (Azhagiri Pillai) contested

the suit, alleging that he was the cousin of first plaintiff; that

apart from the mortgage dated 7.9.1935 created by Manickam

Pillai, the suit property was mortgaged by the daughters of

Manickam Pillai to one Raju Pillai on 22.6.1948 for Rs. 200/-;

that they (first plaintiff and her sisters) approached him for

discharging the said debts; that the property was valued at

Rs.1,000/-, and it was agreed that he should pay them Rs.400/-

and retain the balance of Rs.600/- to discharge the two

mortgage debts; that accordingly he paid Rs.400/- to first

plaintiff and her sisters in December, 1953 or January, 1954

and purchased the suit property under an oral sale; that as he did

not have the funds to pay the mortgage debts, his friend

Soundararaja Iyenger came to his rescue with the understanding

that he (Soundararaja Iyenger) would discharge the

usufructuary mortgage in favour of Krishna Pillai and simple

mortgage in favour of Raju Pillai and obtain assignments of the

mortgages, and thereafter receive the amount from the third

defendant as and when he was able to pay the amount; that in

pursuance of such arrangement, Soundararaja Iyenger paid the

mortgage amount to Krishna Pillai and Raju Pillai and obtained

assignments dated 12.2.1954 in his favour; that subsequently in

the year 1960, the third defendant paid the amount to

Soundararaja Iyenger; and that he obtained possession of the

suit property in the year 1954. He contended that he perfected

his title by adverse possession. He also contended that the

mortgage dated 7.9.1935 was no longer subsisting and the

plaintiffs had no right of redemption.

5. During the pendency of the suit, the first plaintiff

Sakkubai Ammal died. Her legal heirs, that is, husband

Vijayarangam Pillai, sons Prabhakaran and Venkatesan, and

daughter Vatchala were impleaded as plaintiff Nos.3, 2, 5 and 4

respectively. After evidence, the trial court dismissed the suit

by judgment and decree dated 30.10.1987 holding that the

mortgage deed dated 7.9.1935 was not subsisting as on the date

of the suit, that the right of redemption was barred by

limitation, and the third defendant had perfected his title over

the suit property by adverse possession.

6. Feeling aggrieved, plaintiffs 2 to 5 filed an appeal before

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the Subordinate Court, Virudachalam. The first appellate court

allowed the said appeal by judgment and decree dated

18.12.1990. It held that the oral sale put forth by the third

defendant was not proved and at all events void and invalid as

any sale for a consideration of more than Rs.100/- could be

only by a registered instrument. It held that even if the third

defendant was in possession for more than 12 years, such

possession by the third defendant was claimed through the

mortgagee, and did not become adverse to plaintiffs nor confer

title on third defendant by adverse possession. The appellate

court also held that having regard to the acknowledgement

contained in the deed of assignment of the mortgage dated

12.2.1954 by Krishna Pillai, the mortgage was subsisting and

the first plaintiff was entitled to file a suit for redemption within

30 years from 12.2.1954, and, therefore, the suit filed in the

year 1981 was not barred by limitation. It also held that by

virtue of the mortgagee and his assignee being in possession of

the mortgaged property for more than 10 years, the mortgage

debt was discharged under Section 9 of the Debt Relief Act.

Consequently, the first appellate court allowed the appeal, set

aside the judgment and decree of the trial court and granted a

preliminary decree for redemption with costs, as prayed.

7. The third defendant filed Second Appeal No.99/1991

before the Madras High Court against the said judgment. He

also filed an application (CMP No. 5963 of 1997 in the second

appeal) for amendment of the decree by amending the

description of the suit property so as to be in conformity with

the deed of mortgage dated 7.9.1935 (Ex. A1).

8. A learned Single Judge of the Madras High Court by

judgment dated 1.9.1999, allowed the second appeal, and

consequently, dismissed the suit, holding as follows :-

(i) The concurrent finding of fact recorded by the trial

court and first appellate court that Azhagiri Pillai

(third defendant), did not acquire title by adverse

possession, did not call for interference.

(ii) The assignment of mortgage by the mortgagee

under deed dated 12.2.1954 did not amount to

acknowledgement for extending limitation for filing

a suit for redemption.

(iii) The mortgage was executed on 7.9.1935. The

period of limitation for a suit for redemption was 30

years under Article 61(a) of the Limitation Act,

1963, while the period of limitation was 60 years

under the corresponding Article 148 of the

Limitation Act, 1908. Where the period of

limitation under the new Act was shorter, having

regard to Section 30 of the new Act, the suit ought

to have been filed within 7 years from the date of

commencement of the said Act. The new Act came

into force on 1.1.1964. Therefore, the last date for

filing the suit for redemption was 1.1.1971 and the

suit filed on 16.11.1981 was barred by limitation.

(iv) The plaintiffs were not entitled to any relief under

the provisions of the Tamil Nadu Debt Relief Act,

1979, as the mortgage was not subsisting on

15.7.1978, when the said Act came into force.

(v) The plaintiffs could not alternatively claim relief

under the Tamil Nadu Agriculturist Relief Act,

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1938 (Act 4 of 1938) as amended by Act 24 of

1950, as such a case was not pleaded.

9. In this appeal filed by the plaintiffs, the contentions urged

to challenge the decision of the High Court, give rise to the

following questions for consideration :

(i) Whether the assignment of the usufructuary

mortgage by Krishna Pillai in favour of

Soundararaja Iyenger under deed dated 12.2.1954

amounted to an 'acknowledgement' under section

18 of Limitation Act, 1963, thereby enabling

plaintiffs to compute a fresh period of limitation for

the suit for redemption, from the date of such

acknowledgement.

(ii) Whether the mortgage debt under the deed of

mortgage dated 7.9.1935 stood discharged under

section 9 of the Tamil Nadu Debt Relief Act, 1979.

(iii) If the answer to the above two questions is in the

affirmative, to what relief plaintiffs are entitled to.

Re : Question (i) :

10. An usufructuary mortgage is a transfer by the owner

(mortgagor) of an interest in an immovable property for

securing the amount advanced/to be advanced by the creditor

(mortgagee), under which possession of the property is

delivered to the mortgagee with authority to retain such

possession and enjoy the rents and profits therefrom, until the

debt is paid (vide Section 58(d) of the Transfer of Property Act,

1882, for short 'T.P. Act'). The owner/mortgagor, who

continues to hold the bundle of rights constituting ownership,

minus the right to possession, has the right to recover

possession of the mortgaged property by paying the mortgage

debt. The said right to recover possession (along with the right

to receive back the documents relating to the mortgaged

property and the right to obtain a deed of

reconveyance/retransfer of the mortgaged property) is known as

the right of redemption of the mortgagor and is statutorily

recognized in section 60 of T.P. Act. Such right of redemption

can be extinguished during the subsistence of the mortgage only

by the act of parties or by decree of a court. This Court in

Jayasingh D. Mhoprekar vs. Krishna B. Patil [1985 (4) SCC

162] observed :

"It is well-settled that the right of redemption under a

mortgage deed can come to an end only in a manner known

to law. Such extinguishment of right can take place by a

contract between the parties, by a merger or by a statutory

provision which debars the mortgagor from redeeming the

mortgage. A mortgagee who has entered into possession of

the mortgaged property under a mortgage will have to give

up possession of the property when the suit for redemption

is filed unless he is able to show that the right of

redemption has come to an end or that the suit is liable to

be dismissed on some other valid ground. This flows from

the legal principle which is applicable to all mortgages,

namely, "Once a mortgage, always a mortgage"."

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11. Article 148 of the Limitation Act, 1908 (referred to as

'old Act') provided a limitation of 60 years for a suit against a

mortgagee, to redeem or to recover possession of immovable

property mortgaged. The corresponding provision in the

Limitation Act, 1963 ('new Act' or 'Limitation Act' for short),

is Article 61(a) which provides that the period of limitation for

a suit by a mortgagor to redeem or recover possession of the

immovable property mortgaged is 30 years. The period of

limitation begins to run when the right to redeem or to recover

possession accrues. In the case of a usufructuary mortgage

which does not fix any date for repayment of the mortgage

money, but merely stipulates that the mortgagee is entitled to be

in possession till redemption, the right to redeem would accrue

immediately on execution of the mortgage deed and the

mortgagor has to file a suit for redemption within 30 years from

the date of the mortgage. Section 27 of the Limitation Act

provides that "at the determination of the period hereby limited

to any person for instituting a suit for possession of any

property, his right to such property shall be extinguished". This

would mean that on the expiry of the period of limitation

prescribed under the Act, the mortgagor would lose his right to

redeem and the mortgagee would become entitled to continue in

possession as the full owner.

12. Section 18 of the new Act (corresponding to section 19

of the old Act) deals with the effect of acknowledgment in

writing, the relevant portion whereof reads thus :

"18. Effect of acknowledgment in writing.- (1) Where, before the

expiration of the prescribed period for a suit or application in

respect of any property or right, an acknowledgement of liability in

respect of such property or right has been made in writing signed

by the party against whom such property or right is claimed, or by

any person through whom he derives his title or liability, a fresh

period of limitation shall be computed from the time when the

acknowledgement was so signed.

(2) \005\005..

Explanation.- For the purposes of this section,-

(a) an acknowledgement may be sufficient though it

omits to specify the exact nature of the property or

right, or avers that the time for payment, delivery,

performance or enjoyment has not yet come or is

accompanied by a refusal to pay, deliver, perform or

permit to enjoy, or is coupled with a claim to set off,

or is addressed to a person other than a person entitled

to the property or right,

\005\005\005\005."

13. Earlier, there were two views as to what constituted an

acknowledgement in regard to a suit for redemption of a

mortgage. One view was that an admission by a mortgagee, in a

subsequent transaction, that he holds the property as a

mortgagee was a sufficient acknowledgement that the

mortgagee thought and believed that he was liable for the

property being 'redeemed' from him by the mortgagor as on the

date of that statement. The other view was that, to constitute an

acknowledgement, the statement must be an admission by the

mortgagee of the jural relationship in relation to the liability or

the right or the property claimed and that such a statement must

be shown to have been made with a consciousness and an

intention of admitting such a right or liability. The controversy

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has now been set at rest by the decisions of this Court.

14. In Shapur Fredoom Mazda v. Durga Prosad Chamaria

(AIR 1961 SC 1236), this Court explained the essentials of an

acknowledgement by considering the scope of Section 19 of the

old Act :

"\005 acknowledgement as prescribed by section 19 merely

renews debt; it does not create a new right of action. It is a

mere acknowledgement of the liability in respect of the

right in question; it need not be accompanied by a promise

to pay either expressly or even by implication.

The statement on which a plea of acknowledgement is

based must relate to a present subsisting liability though the

exact nature or the specific character of the said liability

may not be indicated in words. Words used in the

acknowledgement must, however, indicate the existence of

jural relationship between the parties such as that of debtor

and creditor, and it must appear that the statement is made

with the intention to admit such jural relationship. Such

intention can be inferred by implication from the nature of

the admission, and need not be expressed in words. If the

statement is fairly clear, then the intention to admit jural

relationship may be implied from it.

In construing words used in the statements made in writing

on which a plea of acknowledgement rests oral evidence

has been expressly excluded but surrounding circumstances

can always be considered. \005 The effect of the words used

in a particular document must inevitably depend upon the

context in which the words are used and would always be

conditioned by the tenor of the said document\005..

Stated generally, courts lean in favour of a liberal

construction of such statements though it does not mean

that where no admission is made one should be inferred, or

where a statement was made clearly without intending to

admit the existence of jural relationship such intention

could be fastened on the maker of the statement by an

involved or far-fetched process of reasoning."

15. The question was again examined with reference to the

right of redemption in Tilak Ram v. Nathu (AIR 1967 SC 935)

and this Court held :

"The right of redemption no doubt is of the essence of and

inherent in a transaction of mortgage. But the statement in

question must relate to the subsisting liability or the right

claimed. Where the statement is relied on as expressing

jural relationship it must show that it was made with the

intention of admitting such jural relationship subsisting at

the time when it was made. It follows that where a

statement setting out jural relationship is made clearly

without intending to admit its existence, an intention to

admit cannot be imposed on its maker by an involved or a

far-fetched process of reasoning."

After examining the wording of the document which was put

forth as an 'acknowledgement', in that case, this Court

observed as follows, on the facts of that case :

"These statements were clearly made for the purpose of

describing his own rights which he was selling under this

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deed. But there is nothing in this document to show that he

referred to the said mortgages with the intention of

admitting his jural relationship with his mortgagors and,

therefore, of his subsisting liability as the mortgagee

thereunder of being redeemed."

The principles laid down in S.F. MAZDA (supra) and TILAK

RAM (supra) were reiterated in Lakhmi Ratan Cotton Mills Co.

Ltd., vs. The Aluminium Corporation of India Ltd., (AIR 1971

SC 1482).

16. This Court had occasion to consider the question again in

Reet Mohinder Singh Sekhon Vs. Mohinder Parkash (1989 (4)

SCC 30). In that case, the suit property was mortgaged on

22.5.1886 and the mortgagee sold his mortgage rights under a

Sale Deed dated 1.11.1913 which contained the following

recitals :-

"Now I of my own accord have sold all my mortgagee

rights along with the original mortgage consideration and

interest which according to the terms of the aforesaid

mortgage deed has accrued and is payable to the instant

vendor . . . The rights and interest regarding recovery of

original mortgage money and interest according to

mortgage deeds executed by Jangi Khan original mortgagor

deceased and redemption of the mortgaged land which

hencetofore vested in the instant vendor stand vested in the

purchaser\005"

The successors-in-interest of the mortgagor filed a suit for

redemption on 28.12.1968 contending that the aforesaid recitals

amounted to an acknowledgement of the right of the mortgagor

to redeem the property. The suit was resisted on the ground that

the recitals in the sale deed dated 1.11.1913 did not serve as an

acknowledgement. Negativing the said objection, this Court

held :

"\005 It is true, as pointed out in Tilak Ram v. Nathu (AIR

1967 SC 935), that the period of limitation cannot be

extended by a mere passing recital regarding the factum of

the mortgage but that the statement on which the plea of an

acknowledgement is based must relate to a subsisting

liability. The words used must indicate the jural

relationship between the parties and it must appear that

such a statement is made with the intention of admitting

such jural relationship. But, in our opinion, the recitals in

the sale deed on November 1, 1913 fulfil the above

requirements. The fact of Nanak Chand having obtained a

mortgage with possession had already been recited in an

earlier part of the sale deed. The passages in the sale deed,

which have been extracted by us above, contain two

specific recitals. The first is that "the original consideration

and interest under had accrued and was payable to the

instant vendor". These words acknowledge that the

mortgage had not been redeemed and that the mortgage

moneys remained outstanding to the mortgagee from the

mortgagor as on the date of the sale deed. The second

recital is even more specific. It says that what stands

transferred to the purchaser is not only the right of the

mortgagee for recovering the principal amounts and interest

according to the mortgage deed (which, as earlier stated,

still remained outstanding) but also "the rights and interest"

regarding the redemption of the mortgaged land. These

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words are, of course, a little inappropriate because the right

of redemption is in the mortgagor and not in the mortgagee.

But, read as a whole, the second sentence we have quoted

here from the sale deed clearly manifests an intention on

the part of the mortgagee to acknowledge that his right to

recover the moneys under the mortgage deed as well as his

liability to have the property redeemed by the mortgagor in

the event of his paying off the moneys due under the

instrument both stand vested in the purchaser. We are of

the opinion that it is not correct to treat the recitals in the

document as a mere narration of the previous mortgage that

had been created on the property. The words spell out a

clear intention that the moneys due under the mortgage still

remained unpaid and also that the mortgagor had a

subsisting right of redemption which he could enforce

against the mortgagee. In this view of the matter the

contention on behalf of the appellant that the recitals in the

document of November 1, 1913 constituted an

acknowledgement of liability for redemption within the

meaning of Section 19 of the Limitation Act deserves to be

accepted."

17. The said principles relating to section 19 of the old Act

fully apply to 'acknowledgements' under section 18 of the new

Act. To summarise, a statement (in writing and signed) by a

mortgagee can be construed as an 'acknowledgement' under

Section 18 of the Limitation Act, if it fulfils the following

requirements :

(i) The acknowledgement of liability must relate to a

subsisting mortgage.

(ii) The acknowledgement need not be in a document

addressed to the mortgagor (person entitled to the

property or right). But it should be made by the

mortgagee (the person under liability).

(iii) The words used in the acknowledgement must indicate

the existence of jural relationship between the parties and

it must appear that the statement is made by the

mortgagee with the intention of admitting the jural

relationship with the mortgagor.

(Such intention of admitting the jural relationship need

not be in express terms, but can be inferred or implied

from the nature of admission and the words used, though

oral evidence as to the meaning and intent of such words

is excluded.)

(iv) Where the statement by the mortgagee in the subsequent

document (say, deed of assignment) merely refers to the

mortgage in his favour which is being assigned, without

the intention of admitting the jural relationship with the

mortgagor, it will not be considered to be an

'acknowledgement'.

18. There is no difficulty in holding a statement to be an

'acknowledgement' under section 18, where the mortgagee

makes a direct admission that he is liable to deliver back

possession to the mortgagor or that the mortgagor has the right

to redeem the property from the mortgage. But when there is no

direct admission, but an acknowledgement is to be implied

from an admission of jural relationship, we have noticed some

confusion in the decisions rendered, as to what is an "admission

of jural relationship". The term 'jural' means 'legal' or

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'pertaining to rights and obligations'. 'Jural relationship

between parties' means legal relationship between parties with

reference to their rights and obligations. In a mortgage, both the

mortgagor and the mortgagee, have certain rights and

obligations against each other. The rights/obligations of a

mortgagor or a mortgagee co-exist, like the two sides of a coin.

The mortgagor's right of redemption is co-extensive with the

mortgagee's right of sale or foreclosure (where such right is

recognized in law). Any statement by either, admitting the jural

relationship with the other, will extend the limitation for a suit

by that other, against the person acknowledging. It follows that

when a mortgagee makes a statement about his right to recover

the mortgage amount, such statement impliedly acknowledges

the corresponding right of redemption of the mortgagor.

Further, a statement admitting jural relationship, need not refer

to or reiterate the rights and obligations flowing therefrom.

Where a party to the mortgage, by his statement, admits the

existence of the mortgage or his rights under the mortgage, he

admits all legal incidents of the mortgage including rights and

obligations of both parties, that is mortgagee and mortgagor.

19. It is contended by the counsel for the respondents that the

statement by the mortgagee in the deed of assignment, that the

assignee will be entitled to receive the amount under the

original mortgage, is only an assurance made by a creditor to

his assignee about the assignee's rights in respect of the

mortgage assigned to him, and such a statement cannot be said

to be an admission of jural relationship with the mortgagor. It is

pointed out that the earlier view, that when a mortgagee sells or

assigns his mortgage rights, the very fact that he was selling or

assigning his rights was a clear acknowledgement of a

subsisting mortgage and of his subsisting rights as a mortgagee,

is no longer valid. It also pointed out that in TILAK RAM

(supra), this Court clarified that the act of

assignment/transfer/sale of the mortgage rights, by the

mortgagee, by itself will not amount to an acknowledgement, if

the document merely described the status of the mortgagee or

described the right that was being transferred, without

indicating any intention to admit his jural relationship with the

mortgagor. It is, therefore, contended that the assignment deed

in this case cannot be considered to be an 'acknowledgement'.

20. The contention ignores the purport and scope of Section

18 and proceeds on the assumption that an acknowledgement

can be made only by a 'debtor' and there is no question of a

'creditor' making an acknowledgement. Section 18 of the Act

deals not only with acknowledgement of debts, but

acknowledgements with reference to all suits involving

properties or rights for which limitation is prescribed under the

Act. It sets out the circumstances in which a fresh period of

limitation can be computed for a suit. If the suit is one for

recovery of the amount due under an on-demand promissory

note, no doubt, only an acknowledgement by the debtor can

extend the period of limitation. But in regard to mortgages, T.P.

Act has created and recognized rights as well as obligations

both in the mortgagor and the mortgagee (vide Chapter IV of

the Transfer of Property Act, in particular, Sections 60 and 67).

Section 18 of the new Act provides that where before the expiry

of the prescribed period for a suit in respect of any property or

right, an acknowledgement of liability in respect of such

property or right has been made by the party against whom such

property or right is claimed, a fresh period of limitation shall be

computed from the time when the acknowledgement was so

signed. An acknowledgement under Section 18 can, therefore,

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be by a mortgagee also, and such acknowledgement will

extend the limitation for a suit against the mortgagee in respect

of the property or right claimed against him.

21. We may illustrate as to what is a mere reference or

description of the jural relationship and what constitutes an

intention to admit the jural relationship. If the relevant portion

of the Deed of assignment, sought to be relied on as an

acknowledgement merely stated that "X mortgaged the

schedule property in my favour under deed of usufructuary

mortgage dated (date) and I hereby assign the said mortgage in

your favour", it will not be an 'acknowledgement' under section

18 of the Act. This is because it refers only to the jural

relationship, but does not show an intention to admit the jural

relationship with the mortgagor or admit his subsisting liability

as mortgagee of being redeemed. But the position will be

different, if the assignment deed further stated : "The said

mortgage is subsisting" or "The rights and obligations under the

said mortgage are enforceable", or "The assignee is entitled to

all benefits under the said mortgage", or "The assignee is

entitled to receive the amount advanced under the said

mortgage", or "The assignee is entitled to all rights and liable

for all obligations under the said mortgage", or "The assignee is

entitled to continue in possession until the mortgage is

redeemed". The use of any such words (which are illustrative

and not exhaustive) would show an intention to admit the jural

relationship, and therefore, amount to acknowledgement,

though they may not refer to the mortgagor's right of

redemption. Ultimately, it is not the form of the words, but the

intention to admit the jural relationship with the mortgagor, that

will determine whether a statement is an acknowledgement.

22. In this case, the operative portion of the deed of

assignment dated 12.2.1954 (Ex.A-3) states that in

consideration of having received Rs.300/-, the mortgagee

(Krishna Pillai) was assigning the mortgage under deed dated

7.9.1935 executed in his favour by Manickam Pillai and

delivered possession of the mortgaged property to Soundararaja

Iyenger. The deed further states that the assignee

(Soundararaaja Iyenger) was entitled to receive all the amounts

as per the original mortgage. The further statement that the

assignee is entitled to receive the amount as per the original

mortgage is an assertion of the right of the mortgagee against

the mortgagor under the mortgage, and consequently, an

admission of the subsistence of the mortgage and of the jural

relationship between the mortgagee and the mortgagor. It is an

acknowledgement under Section 18 of the Act. The High Court

though referred to the said further statement in the deed of

assignment, missed its significance and erroneously held that

the deed contained only a passing reference to the mortgage,

and not a conscious acknowledgement.

23. When the said deed of assignment was executed on

12.2.1954, the mortgage dated 7.9.1935 was subsisting, as the

period of limitation at that time, was 60 years. In view of the

admission of jural relationship contained in the assignment

deed, operating as an acknowledgement of liability, a fresh

period of limitation started from 12.2.1954. When the suit was

filed on 16.11.1981, the new Limitation Act was in force under

which the period of limitation was 30 years. When the 30 years

period is computed from 12.2.1954, the suit filed in the year

1981 was clearly within limitation.

Re : question (ii) :

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24. The plaintiffs have made the necessary averments in the

plaint for invoking and seeking relief under the Tamil Nadu

Debt Relief Act, 1979. The plaintiffs contended that having

regard to the fact that the mortgagee and his successors had

been in possession for more than ten years, the mortgage stood

discharged with effect from 14.7.1978 under section 9 (5)(a) of

the Debt Relief Act and therefore, they are entitled to sue for

redemption.

25. The trial court held that the question of the mortgage

being discharged under the provisions of the Debt Relief Act,

1979, would arise only if the mortgage dated 9.7.1935 was

subsisting as on 15.7.1978 when the said Debt Relief Act came

into force. As it was of the view that the right to redeem was

barred by limitation as on 1.1.1971, and the mortgage was not

subsisting when the Debt Relief Act came into force, it held

that no relief could be claimed by the plaintiffs with reference

to the Debt Relief Act.

26. On the other hand, the first Appellate Court held that the

mortgage was subsisting on the date when the Debt Relief Act

came into force and therefore, the mortgage debt got discharged

under section 9 of the Debt Relief Act with effect from

14.7.1978, and the suit for redemption for redemption was not

barred. The High Court in second appeal held that the deed of

assignment dated 12.2.1954 did not amount to an

acknowledgement and consequently, the limitation for a suit for

redemption of the mortgage expired on 1.1.1971 having regard

to the provisions of section 30 read with Article 61(a) of the

Limitation Act. It also held that as the mortgage was not

subsisting when the Debt Relief Act came into force on

15.12.1978, the question of mortgage getting discharged under

Section 9 of the Debt Relief Act did not arise.

27. While dealing with the first question, we have held that

the period of limitation for the suit for redemption had to be

reckoned from 12.2.1954 and not from 7.9.1935. Therefore,

when the Debt Relief Act, came into force on 15.7.1978, the

mortgage was very much subsisting. Section 9 of the Debt

Relief Act contains special provisions in respect of mortgages.

Sub-section (1) of section 9 provides that the provisions of the

said section applies to all mortgages executed at any time

before 14.7.1978 and by virtue of which the mortgagee is in

possession of the property mortgaged to him. Sub-section (5) of

section 9 provides that where the mortgagee has been in

possession of the mortgaged property for an aggregate period of

10 years or more, then, the mortgage debt shall be deemed to

have been wholly discharged with effect from expiry of the

period of ten years or where such period expired before

14.7.1978, with effect from 14.7.1978. The said provision

applies as the mortgage transaction does not fall under any of

the exceptions enumerated in section 4 of the said Act. As the

mortgagee and his successors were in possession of the

mortgaged property ever since 7.9.1935, that is, for more than

10 years as on the date when the Act came into force, the said

mortgage debt stood wholly discharged with effect from

14.7.1978.

Re : Question (iii) :

28. As the mortgage stood discharged on 14.7.1978, the

plaintiffs will be entitled to a final decree for redemption

without the need to undergo the formality of a preliminary

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decree and taking of an account of the amount due under the

mortgage.

29. The next question is whether the plaintiffs are entitled to

a direction for accounts of the income/profits from the property

from 14.7.1978. The provisions of Order 34 Rules 7, 8, 8A, 9,

10 and 10A of Code of Civil Procedure are relevant in addition

to the provisions of T.P. Act. It is no doubt true that a decree for

redemption would include a direction for entire accounts

between the parties in relation to the mortgage. But the question

of directing accounts would arise only where it is necessary to

find out what is due from the mortgagor to the mortgagee, or

whether there is any over payment by the mortgagor to the

mortgagee. In this case, the mortgage was an usufructuary

mortgage, where the mortgagee was entitled to retain

possession until the mortgage money was paid. When the

mortgage debt got statutorily discharged, the mortgagee became

liable to deliver back possession to the mortgagor. In such a

situation, what the mortgagors-plaintiffs can claim from the

mortgagee, is not rendition of accounts, but mesne profits for

wrongful possession from the date of discharge of the mortgage

debt. There is, therefore, no question of accounting either of the

amounts due by the mortgagor to the mortgagee or of any

accounting of over-payments or for refund of any over-

payments by the mortgagee. In the suit, plaintiffs only sought

rendition of accounts but did not claim mesne profits nor paid

any court fee in regard to past mesne profits. Plaintiffs cannot,

under the guise of a claim for accounts, seek a decree for mesne

profits. After obtaining possession, it is open to them to sue for

such mesne profits as is permissible in law.

30. This takes us to the application filed by the third

defendant before the High Court for amendment of the

description of the property. The third defendant contended that

the description of the property in the plaint schedule was not in

accordance with the mortgage deed dated 7.5.1935, but referred

to a larger area with reference to the deed of settlement

executed by Thukkaram and Yasodhabai Ammal in favour of

the first plaintiff on 24.8.1981 (Ex. A-2). The relief of

redemption can be only in regard to the property mortgaged

under the deed of mortgage and not in regard to any other

property. Therefore, the decree has to be amended so as to bring

the description of the mortgaged property in consonance with

the description of the property mortgaged under the deed of

mortgage dated 7.9.1935 (Ex. A-1)

31. In view of the above, this appeal is allowed as follows :-

a) The judgment of the High Court is set aside and the

suit is decreed, holding that the plaintiffs are entitled

to a decree for redemption in regard to the suit

property. Final decree shall be drawn accordingly.

b) The prayer for rendition of accounts is rejected.

c) The schedule to the decree containing the description

of the mortgaged property shall be amended so as to

bring it in conformity with the schedule to the

mortgage deed dated 7.9.1935.

d) Appellants/plaintiffs will be entitled to costs

throughout.