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2006 (3) TMI 793 - SC - Indian LawsAssignment of the usufructuary mortgage - acknowledgement under Section 18 of Limitation Act, 1963 or not - discharge of mortgage debt under the deed of mortgage dated 7.9.1935. 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? - HELD THAT - 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. 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? - HELD THAT - 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. If the answer to the above two questions is in the affirmative, to what relief plaintiffs are entitled to? - HELD THAT - 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. 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) 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 - The prayer for rendition of accounts is rejected - 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. Appeal allowed.
Issues Involved:
1. Whether the assignment of the usufructuary mortgage amounted to an 'acknowledgement' under Section 18 of the Limitation Act, 1963. 2. Whether the mortgage debt stood discharged under Section 9 of the Tamil Nadu Debt Relief Act, 1979. 3. Reliefs to which the plaintiffs are entitled. Issue-wise Detailed Analysis: Re: Issue (i): The court examined whether the assignment of the usufructuary mortgage by Krishna Pillai to Soundararaja Iyenger under the deed dated 12.2.1954 constituted an 'acknowledgement' under Section 18 of the Limitation Act, 1963. The court noted that an 'acknowledgement' must indicate a subsisting liability and the existence of a jural relationship between the parties. The deed of assignment stated that the assignee was entitled to receive the amount as per the original mortgage, which was interpreted as an assertion of the mortgagee's right against the mortgagor and an admission of the subsistence of the mortgage. Consequently, the court concluded that this statement amounted to an 'acknowledgement' under Section 18, thereby allowing a fresh period of limitation to start from 12.2.1954. Thus, the suit filed in 1981 was within the limitation period. Re: Issue (ii): The plaintiffs contended that the mortgage debt was discharged under Section 9 of the Tamil Nadu Debt Relief Act, 1979, as the mortgagee and his successors had been in possession for more than ten years. The trial court initially held that the mortgage was not subsisting when the Debt Relief Act came into force, but the appellate court disagreed, stating that the mortgage was subsisting and thus the debt was discharged under Section 9. The Supreme Court confirmed that the mortgage was subsisting when the Debt Relief Act came into force on 15.7.1978, and as the mortgagee and his successors had been in possession for more than ten years, the mortgage debt stood discharged with effect from 14.7.1978. Re: Issue (iii): Given the discharge of the mortgage on 14.7.1978, the plaintiffs were entitled to a final decree for redemption without the need for a preliminary decree or an account of the amount due under the mortgage. The court also addressed the issue of accounts of income/profits from the property from 14.7.1978. It concluded that the plaintiffs were not entitled to rendition of accounts but could claim mesne profits for wrongful possession from the date of discharge of the mortgage debt. However, since the plaintiffs did not claim mesne profits in the suit, they could not seek a decree for mesne profits under the guise of a claim for accounts. The court also addressed the third defendant's application for amendment of the property description to conform to the mortgage deed dated 7.9.1935. The court agreed that the decree should be amended to reflect the correct description of the mortgaged property. Final Judgment: a) The judgment of the High Court was set aside, and the suit was decreed, granting the plaintiffs a decree for redemption of the suit property. b) The prayer for rendition of accounts was rejected. c) The schedule to the decree was to be amended to conform to the mortgage deed dated 7.9.1935. d) The appellants/plaintiffs were entitled to costs throughout.
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