Sant Lal Mahton vs Kamala Prasad

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 81 of 1950

Decision Date: 17 October, 1951

Coram: B.K. Mukherjea, Vivian Bose, M. Sastri, M. Patanjali Das, Sudhi Ranjan Bose

In the case of Sant Lal Mahton versus Kamala Prasad, decided on 17 October 1951, the Supreme Court of India delivered its judgment under the authorship of B K Mukherjea. The bench comprised Justice B K Mukherjea, Justice Vivian Bose, Justice M Sastri, Justice M Patanjali Das, and Justice Sudhi Ranjan Bose. The petitioner was Sant Lal Mahton and the respondent was Kamala Prasad. The judgment cited the report 1951 AIR 477 and 1952 SCR 116 and concerned the Indian Limitation Act of 1908, specifically section 20(1) dealing with the payment of interest before the expiry of the limitation period, the effect of a written acknowledgment after the limitation period, and whether such acknowledgment after the institution of suit suffices. The headnote clarified that while the Act requires the payment to be made before the limitation expires, the acknowledgment of that payment need not be made within the same period; however, the acknowledgment—whether before or after the limitation period—must exist prior to the filing of the suit. An acknowledgment recorded only in a written statement filed after the suit’s institution is insufficient. This principle was supported by the decisions in Mohd Moizuddin v Nalini Bala (I L R 1937 2 Cal 137), Lal Singh Gulab Rai (I L R 55 All 280), Venkatasubbu v Appa Sundaram (I L R 17 Mad 92), Ram Prasad v Mohan Lal (A I R 1923 Nag 117), and Viswanath v Mahadeo (I L R 57 Born 453). The matter was an appeal in civil appellate jurisdiction, designated as Civil Appeal No 81 of 1950, arising from a judgment and decree dated 17 March 1944 by the Patna High Court (Chief Justice Fazl Ali and Justice Beevor) in F A No 47 of 1942, which itself stemmed from a decree dated 27 February 1942 of the Subordinate Judge of Purnea in Title Mortgage Suit No 7 of 1940. Counsel for the appellants was B C De, assisted by Bhabhananda Mukherjee, while counsel for the respondent was S P Sinha, assisted by B K Saran. The judgment was delivered on 17 October 1951 by Justice Mukherjea. The appeal, originally taken to the Judicial Committee on special leave granted by an Order in Council dated 2 August 1946, was transferred to this Court following the abolition of the Privy Council’s jurisdiction. The appeal challenged a judgment and decree of a Division Bench of the Patna High Court dated 17 March 1944, which had affirmed the Subordinate Judge’s decision of 27 February 1942. In the underlying suit, the first-party defendants, now appellants, were sued by the plaintiffs-respondents for enforcement of a simple mortgage bond through the sale of the mortgaged property. The trial judge, after deciding all other issues in favor of the plaintiffs, held on the record that the bond was not legally attested and therefore could not constitute a mortgage bond. Consequently, the trial judge declined to grant a decree for sale of the mortgaged property to the plaintiffs and instead passed a monetary decree against the first-party defendants for the amount due under the bond.

The trial judge issued a monetary decree against the first-party defendants for the amount due under the bond, while refusing to order the sale of the mortgaged property. He explained that, although the suit was filed more than six years after the date specified for payment in the bond, the claim for personal relief against the mortgagors was not barred because the defendants had made several payments that invoked the operation of section 20 of the Indian Limitation Act. The mortgagors appealed this decision to the Patna High Court; the plaintiffs made no appeal or cross-objection to the trial court’s refusal to grant a decree for sale of the property. The appeal was heard by a Division Bench consisting of Chief Justice Fazl Ali and Justice Beevor. The appellants argued that the trial court erred in holding that the plaintiffs’ claim for a personal decree was not time-barred, contending that a suit for personal relief against the debtors became barred after six years from the repayment date stipulated in the bond and that the part payments relied upon by the plaintiffs did not extend the limitation period under section 20. The High Court, however, concluded that the bond was properly attested, effective and enforceable as a mortgage bond, and that the trial court’s finding on attestation was unsupported by the evidence. Because the bond could be treated as a mortgage, the High Court held the suit for enforcement of the mortgage was within the limitation period and that it was unnecessary to invoke section 20 to extend the limitation. Nevertheless, the High Court ruled that, since the plaintiffs had not filed any appeal or cross-objection challenging the trial judge’s dismissal of their claim for sale, a mortgage decree in their favour could not be granted. Consequently, the decree originally passed by the trial judge was affirmed. The propriety of that affirmation is now before this Court. Counsel for the appellant contended that, even assuming the High Court was correct in finding the bond to be a valid mortgage and the suit to be an action for enforcement of that mortgage, a monetary decree against the defendants personally could not be granted unless the suit was instituted within the period prescribed by Article 116 of the Limitation Act. He further argued that the High Court overlooked this limitation issue entirely and therefore erred. He maintained that the subordinate judge’s decision on limitation was wrong because the payments cited by the plaintiffs were not acknowledged in the manner required by section 20, so no extension of time was permissible. He also asserted that the correct finding on attestation was the one made by the subordinate judge and that the evidence did not support a conclusion that the bond was legally attested.

In this appeal the petitioners contended that a decree for money could not be granted against the defendants personally unless the suit had been filed within the time prescribed by Article 116 of the Limitation Act. They argued that the High Court had entirely omitted consideration of the limitation issue and therefore erred in not addressing it. According to the petitioners’ counsel, the Subordinate Judge’s decision on limitation was incorrect because the payments on which the petitioners relied had not been acknowledged in the manner required by section 20 of the Limitation Act, and consequently no time-extension was permissible under that provision. The same counsel further maintained that, on the question of attestation, the Subordinate Judge’s finding was the correct one and that the evidence on record did not establish that the bond had been lawfully attested. On the opposite side, the respondents’ counsel, Mr Sinha, not only attempted to refute the arguments advanced by the petitioners but also submitted that even if the petitioners had not filed an appeal or cross-objection against the portion of the trial court decree that was adverse to them, the High Court was nevertheless empowered, on the basis of its findings concerning attestation, to issue a mortgage decree under Order 41, Rule 33 of the Civil Procedure Code. The respondents’ counsel therefore invited this Court to exercise the powers conferred by that rule and to pass a mortgage decree in favour of his clients, relying on the High Court’s conclusions. The Court first examined the limitation question and, to understand the controversy surrounding it, referred to the relevant chronology. The mortgage bond was dated 8 April 1927, and the parties admitted that the executants signed the document on 12 April 1927, which is also the date of registration. Whether the attesting witnesses signed on 12 April or on the earlier date of 8 April remains a disputed point that yielded differing opinions in the lower courts and will be considered later. The bond stipulated a repayment date of 6 March 1928. The suit was instituted on 4 March 1940; if it could be characterised purely as a mortgage suit for enforcement of a charge on immovable property, the filing would be within the limitation period and no limitation problem would arise. Conversely, if the attestation is found to be defective and the mortgagee seeks personal recovery of the debt on the basis of a covenant to pay, the suit would be subject to Article 116, with a six-year limitation from the due date, unless an extension under section 20 could be justified.

In this case, the Court observed that when a bond is registered, the suit is governed by Article 116 of the Limitation Act, which prescribes a limitation period of six years measured from the date fixed for repayment unless another provision of the Limitation Act lawfully extends that period. The Court further explained that the mere decision of a plaintiff to present the action as an enforcement of a charge does not, by itself, create a longer limitation period for obtaining a personal decree against the debtor. Consequently, the Court held that if the instrument before the Court could not be characterised as a mortgage bond and the only relief that the plaintiffs could obtain was a personal money decree against the defendants, the suit should be considered time-barred because it was filed more than six years after the stipulated due date, unless the limitation period was saved by the operation of section 20 of the Limitation Act.

The Court then turned to the question of whether the trial Judge had correctly concluded that the payments made by the defendants satisfied the conditions of section 20 and therefore reset the limitation period for the present suit. The plaintiffs had specifically pleaded in their plaint that the defendants had made eight payments in total, amounting to Rs 780-9-0, in partial satisfaction of the debt arising from the mortgage bond. The first payment of Rs 300 was made on 21 January 1928, which occurred before the due date fixed in the bond. The second payment of Rs 75 was made on 5 June 1929. The third payment was dated 8 March 1931, and the fourth payment followed within a month on 3 April 1931. The fifth and sixth payments were both made in May 1932. The seventh payment was made on 25 July 1934, and the final, eighth payment was made on 15 May 1936. The suit in question was instituted on 4 March 1940.

The Court noted that, had a fresh limitation period been computed from each of those eight payments, the suit would have been within time even if it were treated as an action for a monetary decree against the defendants personally. The appellants, however, argued that none of the payments was accompanied by an acknowledgment in the handwriting of, or a writing signed by, the payer, and therefore none of the payments could restart the limitation period under section 20 of the Limitation Act. To resolve this dispute, the Court indicated that it was necessary to examine the language of section 20, as amended by Act I of 1927, to determine whether the payments without written acknowledgment could nonetheless constitute a valid interruption of the limitation period.

Section 20(1) of the Limitation Act, as amended, provides that when interest on a debt or legacy is paid before the prescribed limitation period expires, or when any part of the principal of a debt is paid before that period expires, a new period of limitation begins to run from the date of that payment. The provision adds that, except for interest payments made before 1 January 1928, such a payment must be accompanied by an acknowledgment that appears either in the handwriting of the person making the payment or in a writing signed by that person. In the present case, none of the payments mentioned in the earlier discussion were marked on the bond itself, and there was no acknowledgment in the handwriting of, or signed by, the debtors before the suit was filed. The Subordinate Judge, however, relied on paragraph 15 of the written statement filed on behalf of defendants 1 to 3, in which those defendants admitted that the payments identified in the plaint had indeed been made on the dates specified, and further claimed that additional payments had been made which reduced the outstanding debt, a fact for which the plaintiffs offered no credit. The Subordinate Judge held that because this written statement bore the signatures of the defendants, it satisfied the requirement of a signed acknowledgment contemplated by the proviso to section 20. The issue before this Court is whether that view of the Subordinate Judge is correct. The language of section 20 makes it clear that two conditions must be satisfied for its operation: first, the payment must be made within the prescribed limitation period; second, the payment must be acknowledged in writing either in the payer’s own handwriting or by his signature. While we agree with the Subordinate Judge that the occurrence of a payment is the factor that actually extends the limitation period under section 20, the statute requires that such a payment be proven by a written or signed acknowledgment, and it excludes oral testimony for that purpose. Consequently, if the acknowledgment does not exist in the prescribed form, the payment alone does not restart the limitation period. The Subordinate Judge was also correct in observing that the statute demands the payment to be made before the expiry of the limitation period, but it does not require the acknowledgment itself to be made within that same period. To read the proviso as imposing such a requirement would be to insert words that are not present in the provision.

The Court noted that the position embraced by the overwhelming majority of High Courts throughout India is a sound one, and it appears to be a proper view to adopt. While the Court acknowledged that it is not essential for the written acknowledgment to be executed before the limitation period expires, it stressed that, in its opinion, such acknowledgment—whether made prior to or after the expiry of the limitation period—must exist before the suit is instituted. The determination of whether a suit is time-barred, the Court explained, hinges exclusively on the date on which the plaint is filed and on the allegations contained therein. The legislature has expressly declared in section 3 of the Limitation Act that, irrespective of whether the defence of limitation is pleaded, a court is bound to dismiss any suit that is instituted after the prescribed period. Consequently, when the plaintiff’s right of action appears to be barred by the limitation statute, Order 7, Rule 6 of the Civil Procedure Code obliges the plaintiff to set out in the plaint the specific grounds of exemption provided by the Limitation Act on which he relies to defeat its operation. If the plaintiff must allege in his plaint the facts that entitle him to such exemption, those facts must be in existence at or before the time of filing the plaint; facts that arise after the filing cannot be invoked to revive a right of action that was dead on the date of the suit. To rely on an exemption under section 20 of the Limitation Act, the plaintiff must be capable of alleging and proving not only that interest on a debt or a part-payment of the principal was made, but also that such payment was acknowledged in writing in the manner contemplated by that provision. The exemption is incomplete without this second element, and unless both elements are proved to exist at the date of filing, the suit will be deemed time-barred. In the present case, the original plaint sought only a mortgage decree in the usual form. After the hearing closed, the plaintiffs apparently became apprehensive that the court might not consider the bond to be properly attested. Accordingly, they prayed for an amendment of the plaint, which the court allowed. By virtue of the amended plaint, the cause of action was recast to arise from various payments made on different dates, as set out in paragraph 7 of the plaint.

In the plaint, at the conclusion of paragraph seven, the words were inserted stating: “The suit is saved from limitation so far as the personal remedy is concerned and the payments were made by the defendants on different dates as mentioned in Schedule A below.” The court treated these additions as part of the original plaint for all legal purposes. However, the amended plaint contained neither any allegation nor any evidence that any of the payments had been acknowledged in writing before the suit was instituted. Because of this lack of written acknowledgment, the suit, when regarded as an action for a money decree against the defendants, was held to be barred by the limitation period on the date of its filing, and consequently the lower courts were not justified in granting a money decree in this case. The remaining issue for determination was whether a mortgage decree could be issued in favor of the plaintiffs based on the High Court’s finding that the bond had been properly attested, a circumstance under which no limitation problem would arise. To resolve this issue, two questions required consideration: first, whether the High Court’s finding on the matter of attestation was a correct and proper determination of the evidence presented in this case; and second, assuming that finding to be correct, whether the plaintiffs’ failure to file an appeal or a cross-objection against the trial judge’s portion of the judgment that denied them a mortgage decree prevented them from obtaining any relief beyond that already granted by the trial judge. Regarding the first question, the evidence established that the mortgage bond had been written and engrossed at the plaintiffs’ residence in the village of Chakla Maulanagur, bearing the date 21st Chaitra 1334 Fasli, which corresponds to 8 April 1027. This date represented the day on which the document was originally written. The bond listed four attesting witnesses—Sunderlal, Matukdhari Prasad, Dwarka Prasad and Nanak Prasad—with the latter also serving as the scribe of the document; all four individuals were residents of Chakla Maulanagur, the same village where the mortgagees lived. In contrast, the mortgagors were inhabitants of a different village, Chandpur. The scribe, Nanak Chand, had died before the suit was heard, and of the remaining three witnesses, two—Sunderlal and Matukdhari Prasad—were examined on behalf of the plaintiffs. Sunderlal, identified as P.W. 1, testified under cross-examination on behalf of some of the defendants, stating, “I signed the bond at the plaintiffs' house, as did the attesting witnesses.” He further affirmed that the bond was attested on the same day it was written. The other attesting witness, Matukdhari Prasad, while being cross-examined, declared, “The bond was written, signed by the executants.”

According to the testimony of the two attesting witnesses, the bond was both written and signed on the same day. The document itself records that the three executants affixed their signatures on 12 April 1927, and that on that very day it was presented for registration before the Registering Officer at Katihar. Katihar lies at a considerable distance from the plaintiffs’ village, requiring a portion of the journey to be made by train. The evidence of the two witnesses therefore confirms that the attestation occurred on the same day the deed was written. Although the deed was initially drafted on 8 April 1927, its execution took place on 12 April 1927. The Subordinate Judge held that because the attesting witnesses signed before the deed was executed, there was no legal attestation. The High Court, however, reasoned that the vernacular equivalent of the word “written” used by the witnesses could also denote execution, and suggested that the Subordinate Judge, who was unfamiliar with the witnesses’ language, might have erred by interpreting “written” merely as the act of engrossing or scribing the deed, whereas the term could also be understood to mean execution.

We do not accept the assumption made by the learned judges of the High Court. Firstly, Matukdhari Prasad, who was a witness for the plaintiffs, gave a clear statement distinguishing between the drafting of a document and its signing or execution. He asserted that the bond was written, executed and attested on the same day. More crucially, the location of the execution must be considered. If the execution had taken place at the plaintiffs’ house, where the deed was undeniably written, the date of execution would naturally coincide with the date of drafting. This line of reasoning was advanced by the plaintiffs’ counsel when cross-examining defendant 1, Sant Lall. He was asked whether the document was executed in the plaintiffs’ village or in Katihar, where it was taken for registration. The witness consistently maintained that he and the other executants signed the document not at the plaintiffs’ residence but at Katihar, arriving there by train between nine and ten in the morning. This account aligns with the surrounding circumstances and the probabilities of the case. The document was indeed conveyed to Katihar on 12 April 1927, and all the executants were present there on that day, acknowledging the execution by signing before the Registering Officer. Their signatures, which constitute the execution, bear the same date. From these facts, it is reasonable to infer that the execution occurred at Katihar before the deed was submitted for registration. Conversely, there is no evidence that any of the attesting witnesses travelled to Katihar; they resided in the plaintiffs’ village and were present when the document was drafted. It would therefore be natural for them to have signed the deed at the plaintiffs’ location on the date of drafting, even though the parties may have intended that the executants also sign on that same day, an intention that apparently was not fulfilled.

In this case the witnesses who had attested the document were residents of the plaintiffs’ village and were present when the document was prepared, but there was no proof that any of them had travelled to Katihar. Consequently it was logical to suppose that they would have signed the deed at the plaintiffs’ location on the date it was written. Although the parties might have intended that the executants also sign on that same day, the evidence indicated that this had not occurred. The Court noted that defendants 1 and 3 did not raise a specific defence of lack of attestation, and defendant 1 remained silent on the matter during his examination-in-chief. Nevertheless the issue of attestation was expressly raised in the written statements of the minor defendants as well as in those of defendants 4 and 9, who are respectively the sons of Bharath and of defendant 2 and who were equally interested in contesting the suit. A distinct question concerning the attestation was also framed by the learned Subordinate Judge. After reviewing the material, the Court concluded that the Subordinate Judge’s view on this point was correct and that it was difficult to rely on the internal evidence of the document together with the witnesses’ statements to show that the bond had been properly attested. Having reached this conclusion, the Court held that it was unnecessary to consider whether a mortgage decree should be passed under Order 41, Rule 33 of the Civil Procedure Code, especially since the plaintiffs had not challenged the trial court’s decision by appeal or cross-objection. Accordingly, the appeal was allowed, the judgments and decrees of both lower courts were set aside, and the plaintiffs’ suit was dismissed. In view of the facts and circumstances, each party was ordered to bear its own costs in all courts. The appellant was represented by I N Shroff and the respondents by R C Prasad.