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PETITIONER: BURN AND COMPANY LTD.

       Vs.

RESPONDENT: ITS WORKMEN

DATE OF JUDGMENT: 06/12/1963

BENCH:

ACT: Industrial  Dispute-Bonus-Rehabilitation  charges-Assessment on  insufficient  evidence, if binding-Salaries,  rates  and taxes  for  previous years-If proper expenses  for  year  in question-Auditor’s   findings-If   binding   on    Tribunal- Development  rebate  statutory reserve--Money  paid  into-If expenditure on revenue account-Provident Fund, contribution- If can be added to net profit for calculating gross profits- Preference & ordinary Dividend rate.

HEADNOTE:   Dispute arose between the company and its workmen over the profit bonus for the year 1960.  The company was prepared to pay  bonus at 3 1/2 months’ wages, but the workmen  demanded more.  Applying the principles laid down by this Court,  the Tribunal worked out, the net available surplus after  making deductions  for  income-tax return on  working  capital  and rehabilitation  charges from the gross profit.   It  appears that  the  Tribunal  calculated  the  annual  rehabilitation charge  mainly on the basis of what had been decided on  the question of rehabilitation charge in the bonus dispute in  a previous year.  The evidence adduced by the company, in  the present  Reference,  on the question of  rehabilitation  was rejected by the Tribunal.  In calculating the gross  profits the 824 Tribunal added back to the net profit in addition to the sum which  the company agreed should be added, the sums paid  as salaries  for the previous years rates and taxes in  respect of previous years, contribution for provident fund, the  sum paid into the development rebate statutory reserve,  certain expenditure  said  to have been incurred  on  purchases  and repairs,  and  certain  expenditure  shown  under  the  head Miscellaneous  expenses.   The Tribunal awarded  51  months’ wages as bonus to the workmen. Held: (i) That once the question as to what is necessary for rehabilitation  and over how many years it should be  spread has  been properly decided by industrial  adjudication,  the assessment  made  ought not to be lightly disturbed  if  the question comes up again in any future year.  It is necessary for  industrial  adjudication  to project  itself  into  the future and decide the total rehabilitation charges over  the years and the number of years over which rehabilitation  has to be spread.  Rehabilitation is, thus rightly regarded as a long term problem. But  where the decision in one year is more on the basis  of lack  of  evidence  than on investigation  of  the  evidence adduced  it would be unreasonable to treat this  as  binding for  all  years to come.  In such cases, if  in  any  future

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dispute  reliable evidence is adduced by the company on  the question of rehabilitation due weight should be given to  it and the Tribunal should not reject it merely on the basis of what has been found in the previous years. (ii) The payment of salaries of previous years as also rates and  taxes  for previous years cannot be  considered  proper expenses  for  the  year  in question  for  the  purpose  of ascertaining  available  surplus.  As pointed  out  by  this Court  in  its previous decisions, the  credits  and  debits referable  to the working of previous years cannot be  taken into  consideration for this purpose for the  simple  reason that  the  workman concerned do not  remain  identical  year after year. (iii)     The  Tribunal was not bound to accept  as  correct whatever  had  been  found correct  by  the  Auditors.   The Tribunal was justified in refusing, in the absence of proper evidence  to  accept  the  company’s  contention  that   the expenses shown in the profit and loss   account        under various  heads  of purchases and repairs  were  all  revenue expenditure. (iv) The  money  paid  into  development  rebate   statutory reserve  cannot properly be considered as an expenditure  on revenue account, for it remained available for the company’s use throughout the year. (v)  The  payment by way of contribution to the trustees  of the provident fund in accordance with the statute cannot  be properly regarded as a provision to meet a future liability. This payment should be regarded as payment made for a demand for  liability of the year in question and cannot  be  added back to the net profits to ascertain the gross profits. 825 Indian  Hume Pipe Co. Ltd. v. Their workmen, [1959] Supp.  2 S.C.R. 948, referred to.  (vi)     The  rate  of  7%  on  preference  share  being  a contractual  one  should  not  be  diminished  and  that  an increase  of  30% was also allowable under s. 3 (1)  of  the Preference Shares (Regulation of Dividends) Act, but such an increase was not admissible in respect of ordinary shares.

JUDGMENT:   CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 97 to  99 of 1963. Appeal  by  special leave from the Award dated  October  11, 1961,  of the 2nd Industrial Tribunal, West Bengal  in  case No. VIII-534 of 1960. A.V. Viswanatha Sastri and D.N. Mukherjee, for the appellant (in  C.A. No. 97/1963) and respondent No. 1 (in C.A. No.  98 and 99 of 1963). H.N. Sanyal, Solicitor-General and B.P. Maheshwari, for  the appellant (in C.A. No. 99/1963). D.L.  Sen Gupta and B.P. Maheshwari, for the  appellant  (in C.A.  No.  98/1963)  and  respondent  No.  3  (in  C.A.  No. 97/1963). Dipak  Datta  Chaudhuri, for respondent No. 1 (in  C.A.  No. 97/1963).   N.C.  Chatterjee,  Ajit Roy Mukherjee and  A.K.  Nag,  for respondent no. 4 (in C.A. Nos. 97 and 98 of 1963).   December 6,1963.  The Judgment of the Court was  delivered by DAS  GUPTA, J.-This dispute between Burn & Company  Limited, (Iron  Works),  Howrah and its workmen is  over  the  profit bonus  for  the year 1960.  Previous disputes  between  this Company  and  its workmen on the question of bonus  for  the

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years  1951-52,  1953-54 and 1955-56 ended  with  awards  of Industrial  Tribunals in West Bengal.  The dispute  for  the bonus payable for the year 1955-56 came up to this Court  in appeal  and was disposed of by its Judgment dated  March  8, 1960.  For the Company’s financial year from May 1, 1958  to April 30, 1959, the bonus, if any, would be payable in 1960. The Company 826 was prepared to pay bonus equivalent to 3 1/2 months’  wages but  the  workmen demanded much more.  It appears  that  the Company  has already made an advance of three months’  wages on  the suggestion of the Deputy Labour Commissioner  during negotiations  for settlement.  But the talks for  settlement ultimately failed.  On applying the principles laid down  by this  Court in the matter, the Tribunal worked out  the  net available surplus out of which the claim for bonus had to be made  at  Rs. 53.31 lacs.  After taking  into  consideration that the Company had contributed Rs. 10.74 lacs towards  the employees’  provident fund and the income-tax  rebate  which would  be available to the Company in respect of  the  bonus payment, the Tribunal was of opinion that a sum of Rs. 35.20 lacs  could be fairly distributed to the workmen  as  bonus. It  has  accordingly awarded bonus to the extent  of  5  1/2 months’  wages.  It has further directed that the amount  of wages already paid in advance towards the bonus shall be set off against the bonus now awarded.  Both the Company and the workmen have appealed against the award by special leave. The main controversy, as it always is in these cases, is  on the   computation  of  the  available  surplus.    Different statements have been filed by the several Unions by whom the workmen  were represented showing a gross profit  at  rupees seven crores and thirty-five lacs and available surplus only a  few lacs less than this.  The Company’s statement  showed the  gross  profits  at Rs.  1,48,891.72.  From  this  prior charges  which  have  to  be deducted  in  arriving  at  the available surplus were shown as On account of income tax            ... Rs. 58,92,925 On account of return on paid up                            capital...  Rs. 95,55,300 As return on working capital...          Rs. 5,73,326 For rehabilitation inclusive of Rs. 20,37,103 the normal no- tional depreciation for the year ...   Rs. 72,64,579 The  figure  thus  reached  for  available  surplus  is  Rs. 1,95,932 which would be equivalent to less than 827 10 days’ wages for the workmen.  The Tribunal in arriving at the  figure  of  Rs. 53-31 lacs  as  available  surplus  has calculated the gross profits at Rs. 181-82 lacs.  From  this it has deducted Rs. 71.36 lacs for income-tax, Rs. 7-39 lacs as return on working capital and a further sum on account of rehabilitation.   For  rehabilitation it  has  deducted  Rs. 23.66 lacs as "rehabilitation charges" exclusive of the  sum of   Rs.   20.37  lacs  under  the  head   Notional   Normal Depreciation.   As  Mr. Sen who appeared before us  for  the Company  in these appeals, fairly pointed out that there  is an  obvious  mistake  in this calculation  inasmuch  as  the Tribunal  having decided that Rs. 23.66 lacs should  be  the annual rehabilitation charges should not have deducted  this entire  amount after having already deducted Rs.  20.73  for Notional  Normal Depreciation.  Mr. Sen admits that  if  the decision   that  Rs.  23-66  lacs  should  be   the   annual rehabilitation  charge, allowable in the year  in  question, only an amount of Rs. 3.29 lacs should be deducted as  prior charge in addition to Rs. 20.37 lacs already deducted  under

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the head Notional Normal Depreciation.  If the other figures stood as calculated by the Tribunal this would result in the increase of the available surplus to Rs. 73.68 lacs.  It  is also  clear that if the Tribunal’s decision that  Rs.  23.66 lacs  is the proper rehabilitation charge allowable for  the year  in question is left undisturbed the available  surplus would  remain  at about Rs. 51 lacs, even if all  the  other figures  as  computed by the Company in its  statement  were allowed  to  stand.  For, as already  stated  the  Company’s claim  for  rehabilitation  charges  inclusive  of  Notional Normal  Depreciation is over Rs. 72.64 lacs, i.e., about  49 lacs more than what the Tribunal has found as allowable.   Mr.  Sen’s main attempt has therefore been to persuade  us to  reject  the Tribunal’s conclusion or,  the  question  of rehabilitation  charge allowable for the year  1958-59.   It appears   that   the   Tribunal   calculated   the    annual rehabilitation  charge  at  this figure of  Rs.  23.66  lacs mainly on the basis of what 828 had  been decided on the question of rehabilitation  charges in  the bonus dispute for the year 1954-55.  It pointed  out that  in the said award the annual rehabilitation  cost  was assessed  at Rs. 14.30 lacs for machinery and Rs. 4.00  lacs for buildings, a total of Rs. 18.30 lacs.  To this it  added an  additional  charge of Rs. 5.36 lacs in  respect  of  the period  that had elapsed since 1954-55.  The  evidence  that was adduced by the Company in the present Reference, on this question if rehabilitation was rejected by the Tribunal.    Mr.  Sen’s argument is that the Tribunal fell into  error in  considering  itself  bound to  proceed  in  the  present reference  on the assessment of the rehabilitation  cost  in the  bonus dispute for the year 1954-55 and that this  error was really the basis of his rejection of the evidence  given by  the  Company  in the present case.  There  can,  in  our opinion,  be no doubt that once the question as to  what  is necessary  for  rehabilitation and over how  many  years  it should be spread has been decided by industrial adjudication after  proper  investigation  and careful  scrutiny  if  the evidence  adduced in any one year the assessment  thus  made ought not to be lightly disturbed when the question comes up again in any future year in respect of rehabilitation.   The very nature if the problem makes it necessary for industrial adjudication  to project itself into the future  and  decide the  total  rehabilitation charges over the  years  and  the number of years over which rehabilitation has to be  spread. There  is  bound  to  be some amount  of  unreality  in  its conclusions because of the difficulty of ascertaining in the present  what will be necessary in the future.  In spite  of that however the calculations thus made give on the whole  a firm  basis  for  making  deductions  for  calculating   the available  surplus  a reasonable sum for  rehabilitation  of machinery  and buildings and other items of capital  as  may require rehabilitation.  Once however any particular  amount has been found necessary as the total rehabilitation  charge for  a number of years and from that an assessment  is  made for  the particular year in dispute of the amount  allowable for that 829 year, it will be unreasonable and indeed meaningless for the matter   to  be  re-investigated  year  after   year.    Re- habilitation is rightly regarded as a long term problem  and that  is why once the matter has been investigated  and  the proper   figure   ascertained,   that   calculation   should ordinarily be adhered to for future years. Mr.  Sen does not seriously contest the correctness of  this

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proposition.  He however contends that where the decision in one year is more on the basis of lack of evidence than on an investigation   of   the  evidence  adduced  it   would   be unreasonable  to treat this as binding for all the years  to come.   He pleads that when the question  of  rehabilitation charges was raised in the bonus dispute for the year 1954-55 the  employer was not in a position to adduce full  evidence and  that  is  how  the assessment  of  Rs.  18-30  lacs  as necessary   amount  for  rehabilitation  of  machinery   and building  came to be made.  Now that he is in a position  to adduce  proper  evidence he should not be  deprived  of  the opportunity  of convincing the Tribunal of the actual  needs for  the  purpose.  There is, in our  opinion,  considerable force in this contention.  We have examined the award in the bonus  dispute of 1954-55 and are satisfied that  in  making the  assessment for rehabilitation charges the Tribunal  did not  get  the benefit of proper evidence in  the  matter  We agree that in these circumstances it would not be reasonable to treat the assessment made in that year as binding on  the employer in the present dispute also. We  are  unable to agree however with Mr.  Sen’s  contention that the real reason why the Tribunal rejected the  evidence adduced  on  behalf of the employer was that  it  considered itself  bound by the previous assessment.  On the  contrary, it  appears to us clear that the evidence that  was  adduced was   examined   fully  and  carefully   by   the   Tribunal independently of the assessment for the year 1954-55 and  it was  when  that  evidence  was  found  unreliable  that  the Tribunal  gave  the  employer the benefit  of  the  previous assessment.  The Tribunal has given clear and cogent 830 reasons  for rejecting the evidence that was adduce  and  we find nothing that would justify us in re-assessing the  same for  ourselves.  One of the main reasons which weighed  with the  Tribunal was that while q notations were received  from Western European countries no quotations were obtained  from Eastern  European  countries  like,  East  Germany,  Poland, Czechoslovakia and U.S.S.R. etc.  Mr. Sen has rightly  urged that  it  must be left to the Company to decide  from  which country  the  new  machinery should be obtained  and  if  it decided  that  rehabilitation  could  properly  be  made  by obtaining   replacements  of  the  machinery  from   Western European  countries  from where the original  machinery  was obtained, it would be unreasonable to ignore the  quotations received from those countries.  The Tribunal however  points out  that Mr. Mukherjee, the Company’s witness  has  himself admitted  that rehabilitation could be conveniently made  by importing from Eastern European countries.  The only  reason this  witness  has given for not obtaining  quotations  from those countries was that all kinds of machines would not  be available  there at a time.  This explanation  is  obviously beside  the  point.   Because  it  will  not  be  ordinarily necessary  to replace all the machines at any one time.   In this connection one is bound to take notice, as the Tribunal has done, of the fact that it is easier to arrange  payments for  purchase  from Eastern European countries  which  would accept  payments  in rupees than for  similar  purchases  in Western  European countries the foreign exchange  for  which might  not be easily available.  The Tribunal  also  pointed out  that Mr. Mukherjee has produced no records to show  the new  purchases of machine in recent years which  would  have shown  how the replacements have been made.  There  is  much force also in the Tribunal’s comment that when Mr. Nadjarian who  has  given evidence about the price of  buildings  says that  he got these from records and these records  have  not

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been produced it becomes difficult to accept his testimony. On  a consideration of the reasons given by the Tribunal  we are convinced that it has not acted 831 arbitrarily in treating the evidence adduced by the  Company as unreliable. Having  rejected the Company’s evidence the  Tribunal  might have  felt inclined to refuse any amount for  rehabilitation charge  for  the year 1958-59.  But rightly  resisting  that inclination  the  Tribunal gave the Company the  benefit  of the. assessment made for the year 1954-55.  It is  therefore not  possible for us to disturb the Tribunal’s  findings  on the question of rehabilitation charge.  We  think  it proper however to add that if in  any  future dispute  reliable evidence is adduced by the Company on  the question of rehabilitation due weight should be given to  it in coming to a conclusion and the Tribunal should not reject it  merely  on  the  basis of what has  been  found  in  the previous dispute of 1954-55 or in the present Reference.  As has been already pointed out the consequence of  leaving the  Tribunal’s findings on the question  of  rehabilitation undisturbed is that the available surplus would be about Rs. 51  lacs,  even  if all other figures  as  computed  by  the Company  are accepted.  On that figure of available  surplus it  would not be reasonable to disturb the Tribunal’s  award of  5  1/2 months’ wages as bonus to the workmen.   This  is sufficient to dispose of the Company’s appeal. In  order however to decide whether the workmen’s claim  for bonus of more than what has been allowed by the Tribunal  is justified  or  not it is necessary to examine  some  of  the other  figures in the calculation of the available  surplus. In  calculating  the gross profits at Rs.  181.82  lacs  the Tribunal  has added back to the net profit, in  addition  to the sum which the Company agreed should be added, the sum of Rs.  2,87,342 paid as salaries for the previous  years,  Rs. 10,74,523  paid  as  contribution for  provident  fund,  Rs. 2,07,322   paid  into  the  development   rebate   statutory reserves,  Rs. 13,48,403 out of certain expenditure said  to have been incurred on purchases of raw and other  materials, stores and spare parts, repairs 832 to  buildings and repairs to machinery; Rs. 3,27,856 out  of the expenditure shown under the head Miscellaneous Expenses; and  Rs.  50,871  paid  as rates and  taxes  in  respect  of previous years.  The Tribunal is clearly correct in thinking that payment of salaries of previous years as also rates and taxes  for  previous  years  cannot  be  considered   proper expenses   for   the  year  1958-59  for  the   purpose   of ascertaining the available surplus.  For, as pointed out  in previous  decisions  of this Court, the credits  and  debits referable  to the working of previous years cannot be  taken into  consideration for this purpose for the  simple  reason that  the  workmen concerned do not  remain  identical  year after year. It  is  equally  clear that the Tribunal  was  justified  in refusing,  in the absence of proper evidence to  accept  the Company’s  contention that the expenses shown in the  profit and loss account under the head of purchases of (1) raw  and other  materials, (2) stores and spare parts  consumed,  (3) repairs  to  buildings, (4) repairs to machinery,  were  all revenue  expenditure.   Mr.  Sen has pointed  out  that  the annual accounts of the Company show the expenditure incurred for  capital expenditure separately.  He contends  that  en- tries in the profit and loss account on the items  mentioned above having been accepted by the Auditors as properly shown

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as revenue expenditure, the correctness of that view  should not have been doubted.  We are unable to agree however  that the  Tribunal  was bound to accept as correct  whatever  had been found to be correct by the Auditors.  A controversy had already  been  raised whether or not these  items  had  been entirely  spent  as revenue expenditure.  It was up  to  the Company  to adduce further evidence in support of  what  had been  shown  in the profit and loss account.  That  was  not done.  No fault can be found therefore with the Tribunal  in proceeding to calculate 2 1/2% of the total figure of  these four items as representing capital expenses. The  Tribunal was in our opinion also right in  adding  back the amount paid into the development 833 rebate  statutory  reserve.  Money paid  into  this  reserve cannot  properly be considered as an expenditure on  revenue account.   For, it remained available for the Company’s  use throughout the year.  We think however that the Tribunal has fallen into error in adding back Rs. 10,74,523 which was paid during the year  by the  Company  to  the trustees of the  provident  fund.   In adding  back this amount the Tribunal apparently, relied  on an observation of this Court in Indian HUme PiPe Co.,  Ltd., v.  Their Workmen(1) At page 954 of the Report  Bhagwati  J. speaking for the Court said:               "It is well-settled that the actual income-tax               payable  by  the Company on the basis  of  the               full  statutory  depreciation allowed  by  the               incometax   authorities   for   the   relevant               accounting  year should be taken into  account               as a prior charge irrespective of any set  off               allowed by the Income-Tax authorities for prior               charges  or any other considerations  such  as               building up of incometax reserves for  payment                             of enhanced liabilities of income-tax  accruing               in  future.  It is also well-settled that  the               calculations  of  the  surplus  available  for               distribution  should be made having regard  to               the  working of the industrial concern in  the               relevant  accounting year without taking  into               consideration the credits and debits which are               referable  to  the  working  of  the  previous               years, e.g., the refund of excess profits  tax               paid  in  the past or loss of  previous  years               carried   forward  but  written  off  in   the               accounting  year as also  future  liabilities,               e.g.,   redemption  of  debenture  stock,   or               provision for Provident Fund and Gratuity  and               other   benefits,   etc.,   which,    however,               necessary  they may be cannot be  inclUded  in               the category of prior charges."’ The  reference in this statement to provision for  provident fund as one to meet future liability was clearly made on the assumption  that  the  money was being  kept  apart  by  the employer himself so (1) [1959] Supp. 2 S.C.R. 948. 1/SCI/64-53 834 that he would be able to make payment in a future year  when the payment would become due.  This can have no  application to a case where the contribution to provident fund has to be made  to somebody else.  Indeed, it would be wrong to  treat this  as payment to meet a future liability inasmuch as  the liability  to make the payment to the trustees  arose  under

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the  Act itself.  This is not a case where the  Company  was laying  by money for a future liability but was able to  use it if it liked.  That would be a proper case of provision to meet a future liability.  The payment by way of contribution to  the trustees of the fund in accordance with the  statute cannot be, however, properly regarded as a provision to meet a  future  liability.   This  payment  should  therefore  be regarded  as payment made for a demand for liability of  the year in question, viz., 1958-59 and cannot be added back  to the net profits to ascertain the gross profits.   As  regards the sum of Rs. 3,27,856 which has  been  added back  out  of the expenditure on  Miscellaneous  ExpEnses  a mistake has clearly been made in respect of Rs. 2,83,156 out of it. the break up in Ex.  F for the Miscellaneous Expenses showed inter alia Rs. 6,52,230 as spent for freight, customs dutY etc., The Tribunal thinks that as Rs. 2,83,156 has been separately  shown in the profit and loss account as  freight and shipping charges it is not unlikely that this amount has been  again  included in Rs. 6,56,230 shown under  the  head freight, customs duty etc.  Mi.  Sen contends that it  would be  unreasonable  to think that the same vouchers  had  been accepted   by  the  Auditors  in  support  of   entries   of expenditure  under two different heads and that it would  be proper  to  think  that Rs. 2,83,156 shown  as  freight  and shipping  charges  was  independent and  separate  from  the freight  and  customs  duty  etc  included  under  the  head Miscellaneous Expenses. There  is  much  force in this contention and  we  think  it reasonable to believe that the sum   of Rs.2,83,156 shown in the  profit  and  loss account under the  head  freight  and shipping charges was not included 835 under  the  head Miscellaneous Expenses.  The  Tribunal  was therefore wrong in adding back this sum of Rs. 2,83,156.  As regards  the  other  items which,  together  with  this  Rs. 2,83,156  made up the total of Rs. 3,27,856 that  have  been added  back by the Tribunal we see no reason to disturb  its conclusion.   We  see no reason also to disturb the Tribunal’s  findings that the rate of 7% on preference shares being a contractual one should not be diminished and that an increase of 30% was also  allowable  under  s. 3(1)  of  the  Preference  Shares (Regulation   of  Dividends)  Act  of  1960.   We   are   of opinion  that  the Tribunal was also right in  holding  that such  an  increase  was not admissible  in  respect  of  the ordinary shares.   On  behalf of the workmen an objection was raised  to  the Tribunal’s  findings  as to the amount  of  working  capital used.   It was said that the evidence did not  clearly  show the  periods  during which the amounts were used.   In  this connection  the  Tribunal  has after  consideration  of  the evidence  of Mr. Ghose and Mr. Dutt accepted their  evidence and the mere fact that it mentioned some weakness in respect of  some minute details does not affect the finality of  the Tribunal’s conclusion.  The  result  of not adding back the sums  mentioned  above, viz.,  Rs.  10,74,523  and Rs. 2,83,156 is  that  the  gross profits became Rs. 168-25 lacs.  The Income-Tax on this after making  the  allowances for statutory depreciation  and  the development  rebate, i.e., a total sum of Rs.  17,86,583  is Rs. 67-67 lacs.  The calculations for the available  surplus therefore stand thus:-                             (Rupees in lacs)      Gross Profits                          168.25      Less Normal Notional Depreciation       20.37

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    Less Income-tax                        67.67      Less Return on Paid-up Capital         7.39      Less Return on Working Capital        5.73      Less Rehabilitation Charges           3.29      (23-66 minus 20.37)      Available surplus                     63.80 836 The  award  of bonus at 5 1/2 months’ wages  appears  to  be reasonable  and  proper  on this  figure  of  the  available surplus.  The employers’ plea for reduction of the bonus and the workmen’s claim for increase of it appear to us  equally injustified. All the appeals are accordingly dismissed.  There will be no order as to costs. Appealls dismissed. C.   BEEPATHUMMA & ORS. V. V.S. KADAMBOLITHAYA & ORS. (K.  SUBBA RAO, M. HIDAYATULLAH AND J.C. SHAH, JJ.) Mortgage-Suit  for  redemption-Mortgagee  enjoying  benefits under a deed-If must also accept the obligations thereunder- Doctrine of election. The  properties in plaint Schedules A, B & C were  mortgaged to   one  Kunjamu  and  others.   By  a  partition  in   the Mortgagees’ family Kunjamu go 4th shares of the interests in these  properties.  Subsequent to the death of  Kunjamu  the mortgagors   and  mortgagees  entered  into   an   agreement evidenced  by  Ex.   P-2 and P-2(a) in  which  the  original mortgage  deed  Exp. was referred but  it  released  certain properties shown in C Schedule.  The mortgagors agreed  that the mortgagees would enjoy the remaining properties shown in A  and  B Schedules for a period of forty years and  it  was agreed  that  on the expiry of this  period  the  mortgagors would have an option to redeem the mortgage land on  payment of  the amount due.  At the time of the execution of Exp.  2 and   P-2(a)  Kunj  Pakki  the  grandfather  of  the   third respondent in this appeal was a minor (son of Kunjamu).  His mother  signed for herself but did not sign Ex.  P-2 and  P- 2(a)  on his behalf and no legal guardian signed it  either. The first respondent purchased Schedule A & B properties and filed  a suit for redemption.  He claimed that  since  under Ex.    P-2  the  mortgagors  were  entitled  to  remain   in possession  for 40 years from 1862 the right  of  redemption accrued in 1902 and the suit filed in 1944 was within  sixty years  as  contemplated by Art. 148 of the  Limitation  Act. The defence was that so far as 837 the share of Kunjamu was concerned Kunhi Pakki who inherited it was not bound by Ex.  P-2(a) since he was a minor and  he was  not a signatory to it nor was it signed by any  legally constituted  guardian  on  his  behalf.   Therefore  it  was contended the Kunhammu’s share inherited by Kunhi Pakki  and subsequently  by third respondent was hit by limitation  and was not liable to be redeemed. The  trial  court  held that since  Kunhi  Pakki  had  taken benefit  under  Exp. 2 and P-2(a) his successors  could  not avoid  them  and  therefore  the  suit  was  not  barred  by limitation  and the properties were liable to  be  redeemed. The High Court upheld the decision of the lower court on the main question.  The present appeal was filed by  certificate granted by the High Court. Held: (i) Kunhi Pakki was not directly bound by Ex.  P-2 and P-2(a)  since  he was a minor and no legal  guardian  signed these  documents on his behalf.  Ex.  P-2(a) cannot be  used

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to  show either an acknowledgment by him or an extension  of the terms of the original usufructuary mortgage. (ii) The evidence in the present case shows that Kunhi Pakki accepted benefit under Ex.  P-2 and therefore neither he nor his  successors could be heard to say that the  mortgage  in Ex.  P-1 was independent of Ex.  P-2 and that the limitation ran out on the lapse of 60 years from 1842.  The doctrine of election was properly applied in respect of his 1/4th  share now in possession of the present appellants.  That  doctrine is that a person who accepts a benefit under a deed or  will or  other  instrument must adopt the whole contents  of  the instrument, must conform to all its provisions and  renounce all  rights that are inconsistent with it, in other words  a person cannot approbate and reprobate the same transaction. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 446 of 1960. Appeal from the judgment and decree dated November 3,  1955, of the Madras High Court in A.S. No. 138 of 1957. S.T. Desai,   M.S.Narasimhan  and  M.S.K.   Sastri,for   the appellants. C.B. Agarwala, K. Jayaramand and R. Ganapathy Iyer, for  the respondents. December  6, 1963.  The Judgment of the Court was  delivered by HIDAYATULLAH, J.-This is an appeal by certificate granted by the  High  Court of Madras against its common  judgment  and decree dated November 3, 838 1955  in A.S.Nos. 88 and 138 of 1947.  The appellants are  7 of  the original 139 defendants and the respondents are  the two plaintiffs and the original defendant No. 1. The  appeal arises from a suit for redemption of a usufructuary mortgage dated  April  26,  1862 and for delivery  of  possession  of properties  described  in schedules A and B  of  the  plaint together with mesne profits from the date of redemption till delivery  of possession.  The mortgaged property had  passed into  the hands of several persons and this is why  so  many defendants  were joined.  We shall now give the facts  which go back for an incredibly long period. The plaint incorporates three schedules distinguished as  A, B  and  C  Schedules  and  they  describe  properties  which belonged to the Alyasantana family of the second respondent. On  April 14, 1842, one Madana, who was then the  Ejaman  of the family, usufructuarily mortgaged the A, B and C schedule properties in favour of one Kunhammu Hajar for 1250  varahas or pagodas (equal to Rs 5,000) under Ex. P-1.  This deed did not contain any provision for repayment of the amount or for the usufructuary mortgage to be worked off.  It, contained a clause to the following effect:               "At  the end of the cultivation season,  when-               ever  you  state  that the said  land  is  not               required,  the said one thousand, two  hundred               and  fifty  varahas due to you  and  also  the               value of improvements shall be paid to you  in               one lump-sum and the said land, house, cattle-               shed,  out-house, etc. shall be obtained  back               from  you,  and this document as well  as  the               previous documents shall be got redeemed." Though  the  mortgage deed was taken ostensibly in  his  own name by Kunhammu Hajar, he did so on behalf of his brothers, sisters, nephews and nieces etc.  The mortgaged property was described  as land bearing a beriz of 44 1/2 pagodas  (equal to  Rs.  227-10-8)  situated in Warg  No.  34  of  Kumbadaje village, Netanige Magne.  Bekal taluk (the whole Warg bore a beriz of 56 1/2 pagodas), comprising 37 fields which 839

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were  described  by  their names  without  boundaries.   The mortgagees  who  were given possession of  lands  were  also placed  in  possession  of some heads of  cattle  and  other movables and for the redemption of the movables there was  a separate term in the deed. In  1857, the family of the mortgagees effected a  partition by registered documents which are marked collectively as Ex. P-6  series.  This partition was not by metes and bounds  or by  the  allotment of whole fields but a division  of  lands with reference to the fraction of the beriz payable.  We are concerned  in this appeal only with the share which went  to Kunhammu Hajar whose share was 1/4th.  In Ex.  P-6 which  is the  partition deed concerning him, his share was  described as follows:               "Further,  out  of Belinjada  land  bearing  a               beriz  of Rs. 227-10-10 and entered in No.  34               maindana  Kuntamma Varg of  Kunvadaji  village               Nettanige Magne, the one-fourth portion  bear-               ing  a beriz of Rs. 56-14-8 and consisting  of               land  and  Bavaities including  border  trees,               soil and field attached thereto. Other  members  of the family received shares  according  to their  own  right,  mentioned in  separate  documents.   The earliest such document was of April 3, 1857 and the last  of April  30, 1857.  Kunhammu Hajar died after  this  partition and on April 26, 1862, the mortgagors and mortgagees entered into an agreement evidenced by Exs.  P-2 and P-2(a) by which Ex.  P-1 was re-affirmed; the mortgagees, however,  released from  Ex.   P-1 certain properties which are  now  shown  in schedule  C  to the plaint.  The mortgagors  on  their  part agreed that the remaining properties (which are now shown in schedules  A  and B to the plaint) would be enjoyed  by  the mortgagees  for  a period of 40 years from the date  of  the document  together  with  improvements  made  thereon.   The mortgagors  covenanted  that  if after  the  expiry  of  the stipulated  period this land was required by them and if  at the time of the cultivation season of that year the mortgage amount of the usufructuary mortgage (Ex.  P-1) 840 together  with  the amounts of two other  deeds  creating  a charge  and.   Rs. 100 taken at the execution of  ’Ex.   P-2 together with the amounts relating to improvements were paid in one lump-sum, the land and the bond would stand redeemed. Ex.   P-2 was executed by the mortgagors and a,  counterpart (Ex.   P-2(a))was  executed among others,  by  Aliamma,  the widow  of Kunhammu Hajar, who signed for herself but not  on behalf  of  Kunhi  Pakki her minor son  by  Kunhammu  Hajar. Kumhi   Pakki’s  share  in  the  mortagaeg  was   thus   not represented  in  Exs. p-2 and     P-2(a). KunhiPaki died  in 1934  and the first defendant, also Kunhi Pakki who  is  the third respondent in this appeal is his grand-son. It may  be mentioned  that  the two deedes which created a  charge  and which were to be dischrged along with Ex.  P-1 and P-2  have been held by the High Court and the Court below to be fr the principal amount of Rs. 2,000.We may now omitt for the  time being  a refrence to the further devolution of the share  of Kunhi Pakki son of Kunhamm Hajar, in respect of whose  share in  Ex.   P-1 the main dispute in the case  has  arisen.  We shall mention those details later. The present suit was filed for redemption of Ex. P-2 by  the first  and  the secono- respondents.  The  first  respondent purchased  schedule A properties in July 1941 by  Ex.   P-83 and  undertook to redeem the mortgaged properties  described in schedules A and B and to hand over possession of schedule B  properties to the legal representative in the  family  of

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Madana.   Respondent  No.  2 the then  Elaiiianthi  is  that representative.   This suit was filed on April 20, 1944  and it  would  clearly be barred under Art. 148  of  the  Indian Limitation  Act unless Exs.  P-2 and P-2(a) and the term  of 40  years  for  which  the  mortgagees  were  to  remain  in possession from 1862 were taken into consideration and saved limitation.   The plaintiffs in their suit stated  that  the claim was within time, because under Ex.  P-2 the mortgagees were  entitled  to remain in possession for  40  years  from April 26, 1862 and the right of redemption thus 841 accrued  for the first time on April 27, 1902 and the  claim made in 1944 was within 60 years of that date as required by Art.  148.  The defence was that in so far as the  share  of Kunhammu Hajar was concerned, Kunhi Pakki, who inherited  it was  not  bound  by  Ex. P-2(a) because  he  was  neither  a signatory  to it being a minor, nor had any  legal  guardian executed,  Ex.  P-2(a) on his behalf.  It was  pleaded  that there  was no doctrine of representation in Mohammedan  Law, and  the mother, even if she had signed Ex.   P-2(a),  would have been a fazuli, that is to say, an unauthorised  person. It  was  further pleaded that in respect  of  Kunhi  Pakki’s share  Exs.   P-2 and P-2(a) could not save  limitation  and 1/4th share of Kunhammu Hajar was not liable to be redeemed. It  was  also  claimed  that the  plaintiffs  must  pay  for improvements. The trial Judge held that suit to be within time applying to the 1/4th share of Kunhammu Hajar than owned by C.  Mahamood deft.  8, the equitable doctrine of election on  the  ground that  Kunhi Pakki had approved and adopted Exs.  P-2 and  P- 2(a)  and taken benefit under them and his successors  could not therefore avoid them.  With regard to improvements,  the trial  Judge found that an amount of Rs. 4.089-2-0 was  due. The  trial Judge accordingly passed a decree inter alia  for the redemption of the share of C. Mahamood on payment of the price of redemption and improvements together with  interest thereon.  From this judgment, A. S. 138 of 1947 was filed by defendants  3, 5, 8, 9, 49, 50, 525 67, 68 and 121 and  A.S. 88  of 1947 was filed by defendant 58.  The plaintiffs  also cross-objected.  The judgment of the High Court modified the decree in the matter of the amounts due for improvements but on  the  main question, it endorsed the views of  the  trial Judge with regard to limitation and the ’application of the equitable doctrine of election to Kunhi Pakki in respect  of documents Ex.  P-2 and P-2(a). In this   appeal,  it is contended that the  conclusions  of the High Court with regard to limitation and the 842 doctrine  of  election were erroneous and further  that  the High Court was in error in awarding mesne  profits from  the date fixed in the preliminary decree for redemption, in view of the fact that the High Court found an increased amount in respect  of improvements and the amount of improvements  had to  be paid for in full before redemption could be  claimed. Before  we  deal  with these points, we  must  narrate  more facts. The  present appeal has been filed by Beepathumma the  legal representative of deft. 8-C.  Mahamood son of Abdul  Rahiman Haji, who died during the pendency of the appeal in the High Court and by the daughter (deft. 9) and the sons (defts. 52, 67 and 68) of C. Mahamood; the other appellants are  Abdulla (deft.  49)  son  and  Bipathumma  (deft.  50)  daughter  of Mammachumma (deft. 48).  This Mammachumma was the sister  of Kunhi  Pakki son of Kunhama Hajar.  These names have  to  be borne  in  mind, because they are connected with  the  1/4th

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share which on partition went to Kunhamu Hajar by Ex.   P-6, and  will  figure in the narrative which follows.   It  must also be remembered that Warg No. 34 was also called "Belinja Mainda-Kinhana". After the partition, Kunhammu Hajar executed a  usufructuary mortgage (Ex.  P-16) in favour of his elder sister Cheriamma in  respect  of  his  1/4th share  on  September  23,  1857. Cheriamma had received 1/8th share (beriz of Rs. 28-7-4)  at the  partition vide Ex.  P-6(c).  In the mortgage deed  (Ex. P-16)  it  was stated that Kunhamu Hajar  would  redeem  the property  whenever he wanted it.  Ex.  P-2 and  P-2(a)  then came  into existence.  Cheriamma was not a signatory to  Ex. P-2(a),  because  she had died earlier.   After  cheriamma’s death,  her  share of 1/8th and the  mortgagee  rights  were divided between Mammachumma and Aisumma by Exs.  P-17 and P- 17(a)  on  October 6, 1861.  Each of these two  sisters  was allotted property of the beriz of Rs. 28-7-4 from the  1/4th share mortgaged by Kunhammu Hajar and of Rs. 14-3-8 from the share proper of Cheriamma.  Mammachumma and 843 Aisumma  thereafter held properties of a total beriz of  Rs. 42-11-0  each  and  each  share was  3/16th  of  the  entire mortgaged property. After  Kunhammu Hajar’s death, his son Kunhi  Pakki  ignored the  usufructuary mortgage in favour of Cheriamma  (Ex.   P- 16).  On July 10, 1884, he took a sale deed (Ex.  P-59) from Hammadekunhi son of Mammachumma.  The property was described as of beriz of Rs. 28-7-4 in Warg No. 34 and of the beriz of Rs.  14-3-8.  In other words, though the property was  shown in two lots, he obtained the 3/16th share of Cheriamma.   No boundaries were mentioned in the deed because it was  stated that  Kunhi  Pakki  was in possession of a  portion  of  the properties  in  the  same Warg.  In this  way,  Kunhi  Pakki obtained properties of a total beriz of Rs. 42-1 1-0,  which had belonged to Mammachumma. Kunhi  Pakki then executed a simple mortgage (Ex.  P-60)  in favour  of  one Laxmana Bhakta on January 18, 1887  for  Rs. 5,500.   The  property  was said to  be  of  Belinja  Mainda Kinhana (Warg No. 34) and to be in two lots, one lot bearing a  beriz of Rs. 28-7-4 and the other a beriz of Rs.  14-3-8. This showed that Kunhi Pakki was mortgaging the above 3/16th share  acquired  by him by Ex.  P-59.   This  conclusion  is reinforced by the fact that the boundaries in Ex.  P-60  are said  to be as mentioned in Ex.  P-59.  The right  of  Kunhi Pakki  in  this property was said to  be  "Avadhi-Ilidarwar" (usufructuary mortgage for a fixed term in lieu of  interest ) (Ex.  P-1 read with Ex. P-2).  Later, Kunhi Pakki executed a  simple mortgage Ex.  P-61 for Rs. 2,000 on  February  11, 1892  in  favour of one Anantha Kini.   The  property,  this time,  was  said to be of the beriz of Rs. 56 odd  and  also property  of  the beriz of Rs. 28-7-4 and  Rs.  14-3-8.   In other  words,  he  was mortgaging the  entire  7/16th  share (1/4th  plus 3/16th).  No boundaries were given but  it  was stated that the boundaries were the same as in the  mortgage deed of January 18, 1887 in favour of Laxmana Bhakta.   This document recited that no other documents were handed 844 over,  but the mortgagor undertook to send them latter.   On September  29, 1902, Kunhi Pakki, his wife  Beepathumma  and his son Kunhammu executed a usufructuary mortgage (Exs.   P- 62)  for  Rs.  32,000  in favour  of  one  Vaikunta  Bhakta. Several  lots  of  properties  were  included  and  item  18 referred  to  property  of  the  beriz  of  Rs.  98-11-0  in Belinjada Maindana Kinyana (Warg No. 34).  This showed  that he  was  mortgaging  his 1/4th share  and  3/16th  share  of

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Cheriamma.  A recital showed that all "Vola-documents"  were handed  over and evidence has established that Ex.  P-2  was one  of  them.  Vaikunta Bhakta  transferred  the  mortgagee rights under Ex.  P-62 to Abdul Rahiman and Korgappa by  Ex. P-64  dated April 10, 1913; item 18 in Ex.  P-64 is land  of Warg  No. 34 of the beriz of Rs. 98-11-0 and the  boundaries are said to be as shown in the Ilidarwar (Ex.  P-1 and P-2). Kunhi Pakki also executed on August 26,1924, a document (Ex. P-65) creating a charge on the same properties in favour  of the assignees.  These properties were again said to be those that  had been usufructuarily mortgaged under the  Ilidarwar of  September 29, 1902 in favour of Vaikunta Bhakta  by  Ex. P-62. On  January  23, 1930, the heirs of Abdul  Rahiman  and  the heirs  of Koragappa executed a partition dated  (Ex.   D-54) and  at that partition, the Kumbadaje properties which  were the  subject-matter of the mortgages and charge fell to  the share  of  Abdul Rahiman’s heirs.  It is stated  in  Ex-D-54 that  all  the documents were handed over to  the  heirs  of Abdul Rahiman.  C. Mahamood was the son of Abdul Rahiman and on  September 23, 1930, he obtained a release of the  shares of his mother, brother and sister by Ex.  P-66.  In Ex.   P- 66.  there  is a mention that the  properties  of  Kumbadaje village  had  been obtained by an assignment  from  Vaikunta Bhakta  and  were being enjoyed as a  usufructuary  mortgage with a term.  It also mentioned the charge created by  Kunhi Pakki  for  Rs.  9,500  on August 26,  1924.   If  was  also mentioned that all the documents relat- 845 ing to properties in Kumbadaje village bad been handed  over to C. Mahamood son of Abdul Rahiman.  The total beriz of the Kumbadaje  prperties was shown to be Rs. 198-8-0 because  it included certain sub-divisions other than those inccluded in Exs.   P-64  and P-65.  In this manner,  the  8th  defendant acquired the 7/16th share of Kunhi Pakki. We have now to see three other documents which were executed either  by  Kunhi  Pakki or were in his  favour.   The  most important  of  these is Ex.  P-3 dated  September  4,  1871. This was a mortgage by the original mortgagors in favour  of Kunhi Pakki.  It will be recalled that schedule C properties were  released at the time when Ex.  P-1, which was  without any  time limit, was converted into a mortgage with  a  time limit  by  Ex.   P-2 in 1862.  Kunhi Pakki  now  obtained  a mortagage  of  the  released properties with a  term  of  32 years’  enjoyment,  thus putting all  the  three  properties described  in  schedules  A,  B and  C  in  the  plaint  and mentioned in Ex.  P-1 on the same footing.  The significance of 32 years’ term is quite clear.  This mortgage was to  run for the same period for which the other mortgage deed was to run.   It was stated in this document that Kunhi  Pakki  was already enjoying the other property out of property  bearing a beriz of Rs. 227-10-10 of Waag No. 34 under a usufructuary mortgage  with  a  time  limit by  virtue  of  a  registered document  of 1862 executed by Kunhi Pakki’s mother  Aliamma. Certain recitals of that document may be reproduced here:               "   Out  of  the  property  enjoyed   by   you               previously  under usufructuary  mortgage  with               time-limit i.e., out of the property bearing a               beriz of Rs. 227-10-10 and entered in Muli No.               34  our  ancestor, Maindana Kinhanna  varg  in               Kumbadaje  village, the said  Nettanige  magne               attached  to  the sub-district  of  Kasaragod,               South  Kanara  district, in respect  of  which               property the entire tirve is paid by yourself,               the particulars of the propertv enjoyed by  us

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             without payment of tirve tinder the registered               Karar (Agreement) deed executed. on the 846               14th of Chitra Bahula of Dundubhi (1862)  year               (27th April 1862) by your mother Alima Hajumma               and  others in favour of ourselves and  others               are as follows:                x              x           x         x      x               "All this entire property is mortgaged to  you               with  a  time-limit of thirty-two  years  from               this  Prajothpathi year onwards; and  the  one               said   Karar  document  obtained  by  us   and               mentioned above is given to you;                x           x          x         x          x               "If  the  principal amount and  interest  fall               into  arrears, that arrears of  interest  also               shall  be  paid, after the due date,  at  that               time only when the mortgage amount relating to               your Avadh Ilida Arwar (usufructuary  mortgage               with time-limit) is paid and when the property               and the documents are     redeemed; and.,  the               property,  this  document, and  the  documents               mentioned  herein and also to be got  redeemed               by you from the said Hammada Kunhi Beaty shall               be got redeemed by us.  " The consideration of this mortgage was to go to pay off  the dues  of  Hammada Kunhi and others amounting in all  to  Rs. 565-8-0.   The  mortgagors also acknowledged receipt  of  an amount of Rs. 234-8-0.  By this document, Kunhi Pakki placed all the properties on the same footing and neutralised so to speak  the  effect of the release of properties by  Ex.   P- 2(a).   Kunhi Pakki appears not to have paid  these  amounts himself, because on September 21, 1872, he executed a simple mortgage in favour of Hammada Kunhi for an amount of Rs. 800 (Ex.  P-3(a)).  He stated in that deed that the property was Mortgages without possession and was still in the  enjoyment of the original proprietors. The  last document to be mentioned is Ex.  P-4, which was  a usufructuary  mortgage by the original mortgagors in  favour of Hammada Kunhi dated May 29, 1877.  This document makes  a reference 847 to  the earlier documents of Kunhi Pakki in respect  of  the released  properties.   It refers specially to Ex.  P-2  and states   that  that  property  was  now  being  held  on   a usufructuary mortgage with a time-limit. It  was contended in this case on behalf of  the  mortgagees that the 1/4th share of Kunhi Pakki, on which time-limit was not  imposed, because Kunhi Pakki was a minor when Ex.   P-2 and  P-2(a.)  were executed, could not be  redeemed  by  the plaintiff  as the suit in respect of them  was  time-barred. To  understand  this contention, it is necessary to  give  a short  history  of the Law of Limitation between  the  years 1842  and 1902.  In 1842 when Ex.  P-1 was  executed,  there was  no  law  prescribing a period  of  limitation  for  the redemption  of a usufructuary mortgage.  Such limit came  in 1859  for the first time and a period of 60 years  from  the date  of  the mortgage was prescribed.  It is  this  statute which seems to have been the cause for the execution of Exs. P-2 and P-2(a); the mortgagees were perhaps afraid that  the mortgage could be redeemed at any time within 60 years  from the  date  of  the  mortgage of 1842.   The  last  date  for redemption  thus was 1902.  By getting the term certain  for 40  years,  the date for redemption was shifted by  them  to 1902  and  redemption could not take place till  that  year.

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The  mortgagors  also  benefited, because  they  obtained  a release  of  some properties and received Rs. 100  in  cash. The period of 60 years was repeated in the Act of 1871;  but it contained a rider that if during the period of 60  years, there  was an acknowledgment then the period would run  from the date of that acknowledgment.  Art. 148 of the Limitation Act  as it stands today was introduced by the Act  of  1877. It makes the 60 years’ period run from the time when redemp- tion  is  due.  The mortgagors contend that  they  have  the benefit  of the present Act read with Exs.  P-2  and  P-2(a) and  the  time for redemption will expire at the end  of  60 years  from  the date on which redemption became  due  under Exs.   P-2  and P-2(a), that is to say 1902.   There  is  no doubt that the Law of Limitation 848 is a procedural law and the provisions existing on the  date of  the suit apply to it.  This suit was filed in  1944  and the  Act of 1877 governs it.  The only dispute is  when  did the  mortgage become due for redemption.  According  to  the mortgages,  tape  rate from the date of the  mortgage  under the Act of 1859 and did not stop in respect of the share  of Kunhi  Pakki,  because he was not bound by Ex.  P-2  and  P- 2(a).  The mortgagors, on the other hand contend that  Kunhi Pakki had accepted Exs.  P-2 and P-2(a) as his own documents and had obtained benefit under them in various ways and  the appellants are either estopped  from contending the contrary or  having  approved and adopted those documents  and  taken benefit,  cannot repudiate them.  In other words, they  seek to  apply the equitable doctrine of election to kunhi  Pakki and  thus  to deft. 8 who derived title  from  Kunhi  Pakki. This  plea of the mortgagors was accepted by the High  Court and  the  Court below.  It is contended  that  these  courts erroneously applied the doctrine to the present case. Mr.  S.T.  Desai learned counsel for the  appellants  admits that  the  mortgagors  had  not  Iost  their  right  to  the properties   comprised  in  Ex.   P-2  and  that  Ex.    P-2 incorporated Ex.  P-1.  Exs.  P-63 and P-63(a) were filed to establish the connection which, in view of the admission, it is not necessary to set forth here.  He also admits that  he can  not  make  out  a case under Art.  134  of  the  Indian Limitation  Act.  He contends that the doctrine of  election is  but a species of estopped and there can be  no  estopped against  law especially against the Limitation Act,  because of  s.  3  of that Act.  He relies upon a  decision  of  the Madras  High Court reported in Sitarama Chetty and  Anr.  v. Krishnaswami  Chetty(1) where White C. J. quoting a  passage from  Mr.  Mitra’s book on the Law of  Limitation,  observes that an agreement by a person against whom a cause of action has arisen, that he would not take advantage of the statute, cannot affect its operation on the original cause of action, unless (1)  [1915] I.L.R. Mad., 38 374. 849 such  agreement  amounts to an acknowledgment  of  liability which  the statute recognises as an exception to  the  rule. Mr. Desai also relies upon Govardhan Das v. Dau Dayal(1) for the proposition that no one can contract himself out of  the statute of limitation, nor can estoppel be pleaded against a statutory bar of limitation.  Some other cases cited by  him are not in point and need not be mentioned.  On the basis of these cases, Mr. Desai contends that unless Exs. P-2 and  P- 2(a)  can be pleaded as an acknowledgment limitation  cannot be  saved  in respect of Kunhi Pakki’s share  and  the  suit itself  must be dismissed under s. 3 of the Limitation  Act. He contends that the equitable doctrine of election does not

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apply  to the present case, because the documents  on  which reliance  is  placed refer not to the 1/4th share  of  Kunhi Pakki but to the 3/16th share of Cheriamma which Kunhi Pakki subsequently obtained.  He states that the latter conclusion is  inescapable  if  Exs.   P-59, P-60  and  P-61  are  read together.   He submits that in these documents Kunnhi  Pakki no  doubt connected the 3/16th share with Exs.  P-2  and  P- 2(a) but treated his own 1/4th share separately. There is no doubt that Kunhi Pakki was not directly bound by Exs.  P-2 and P-2(a).  Mr. Desai is right in contending that as  Kunhi  Pakki was a minor and no guardian signed  on  his behalf,  Ex.   P-2(a)  cannot  be used  to  show  either  an acknowledgment  by  him or an extension of the term  of  the original  usufructuary mortgage.  The only question thus  is whether by reason of the later documents and the conduct  of Kunhi Pakki it can be said that Kunhi Pakki had obtained the benefit  of Ex.  P-2(a) which bound him to accept Exs.   P-2 and  P-2(a)  in their entirety.  In binding Kunhi  Pakki  in this way, no question of extending the period of  limitation or of acknowledgment arises, and section 3 of the Limitation Act  is  not in the way because time would  run,  only  from 1902.  This result follows because the mortgagors could  not redeem  the property including the share of Kunhi Pakki  for 40 years from 1862. (1)  [1932] I.L.R. 54 All. 573. 1 SCI/64-54 850 The doctrine of election which has been applied in this case is  well-settled and may be stated in the classic  words  of Maitland-               "That he who accepts a benefit under a deed or               will or other instrument must adopt the  whole               contents  of that instrument, must conform  to               all  its  provisions and renounce  all  rights               that are inconsistent with it."               (see  Maitland’s Lectures on  Equity,  Lecture               18) The  same  principle is statedin White and  Tudor’s  Leading Cases in Equity Vol. 18th Edn. at p. 444 as follows:               "Election  is  the obligation imposed  upon  a               party  by Courts of, equity to choose  between               two  inconsistent  or  alternative  rights  or               claims in cases where there is clear intention               of the person from whom he derives one that he               should not enjoy both...................  That               he who accepts a benefit under a deed or  will               must   adopt   the  whole  contents   of   the               instrument." The  Indian  Courts have applied this  doctrine  in  several cases  and a reference to all of them is  hardly  necessary. We  may,  however, refer to a decision of  the  Madras  High Court  in  Ramakottayya v. Viraraghavayya  (1)  where  after referring  to  these  passage quoted by us  from  White  and Tudor,  Coutts Trotter, C.J. observed that the principle  is often put in another form that a person cannot approbate and reprobate  the  same  transaction and  he  referred  to  the decision of the Judicial Committee in Rangaswami Gounden  v. Nachiappa  Gounden  (2).   Recently,  this  Court  has  also considered  the doctrine in Bhau Ram v. Baij Nath Singh  and others (3). The short question is whether, in the words of the  Scottish lawyers Kunhi Pakki can be said to have approbated Ex.   P-2 and P-2(a) and therefore his successors in title cannot  now reprobate them.  In this connection, Ex.  P-3 and P-4  quite clearly  show that Kunhi Pakki considered that he was  bound

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by Ex.  P-2(a) and the mortgagors were bound by (1)  [1929] L.R. 52 Mad. 556(F.B.) (2) [1918] I.L.R. 42 Mad. 523. (3) [1962] 1 S.C.R. 358. 851 Ex.  P-2.   His  taking  of the  mortgage  of  the  released properties  clearly  indicated  that he  accepted  that  the mortgagors  were released from the obligations of  Ex.  P-1. In Ex.  P-3, he took the mortgage of the released properties for  a period of 32 years which made the two  mortgages  run for  an  identical term, and that document referred  to  the earlier  transaction  as one under an  Avadhi  Illida  Arwar (usufructuary  mortgage with a time limit)  which  indicated that  the time limit imposed by Exs.  P-2 and P-2(a) was  in his  contemplation.  In all subsequent documents,  reference is to be found to the Illida Arwar and the reference is  not only  to  the 3/16th share of Cheriamma but  to  the  entire 7/16th  share of Kunhi Pakki, that is to say,  his  original share of 1/4th obtained by him through his father by Ex.  P- 6 and 3/16th share which he obtained later.  In view of  the fact that in this way, Kunhi Pakki obtained the enjoyment of the  mortgage in respect of his 1/4th share for a period  of 40 years certain, he must be taken to have elected to  apply to  his  own 1/4th share the terms of Ex.  P-2.   Having  in this way accepted benefit and thus approbated that document, neither he nor his successors could be heard to say that the mortgage  in Ex.  P-1 was independent of Ex.  P-2  and  that the  limitation ran out on the lapse of 60 years from  1842. In  our  opinion,  the doctrine  of  election  was  properly applied  in respect of Kunhi Pakki’s 1/4th share now in  the possession of the present appellants through defendant 8. The  next point that was urged was that the High  Court  and the  Court  below  should not  have  awarded  mesne  profits against the appellants till they were paid the full price of redemption including the compensation for improvements.  The trial  court had found that an amount of Rs.  4,089-2-0  was due  to  defendant No. 8. This amount was increased  by  the High  Court  to  Rs.  6,625-7-0.   This  was  a  substantial increase   and  even  though  the  plaintiffs  had   earlier deposited the entire amount for redemption including the sum of Rs. 4,089-2-0, they cannot be said to have fulfilled  the condition on which redemp- 852 tion was to be allowed to them.  Under Ex.  P-1, from  which we  have quoted the relevant passage earlier it  was  agreed that  the sum of 1250 varahas and the value of  improvements would be paid in one lump sum.  In the subsequent  documents also  the same term was included.  The  respondents  contend that  interest  on  the extra  amount  of  compensation  for improvements  has  been awarded by the High Court  and  this makes  it  equitable that the appellants  should  pay  mesne profits for the period of their possession after the deposit of  the  amount  found  by the trial  Judge  in  court.   No question of equity really a-rises, because the mortgage  had to  be redeemed according to its own terms.  The  mortgagors undertook  that they would redeem the properties  by  paying the  principal of the mortgage amount and  the  compensation for  improvements in a lump sum and cannot complain  if  the mortgagees are not compelled to hand over the property or to pay  mesne  profits till the mortgagors have paid  the  full amount.   Both  sides referred to certain  cases  which  are really  not  in  point  because  the  facts  were   entirely different.  It is not necessary to refer to them, because no principle  can be gathered from them.  In the present  case, April  15, 1946 was fixed for redemption and the  mortgagors

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put  into  court a sum of about Rs. 17,000.   The  appellate decree  was  passed on November 3, 1955 and  possession  was delivered  in  1957.   We were informed that a  sum  of  Rs. 11,800  per  year  was deposited in court by  way  of  mesne profits. Now  the mortgagees cannot claim to hold the lands  and  use the  amount paid as price of redemption.  Even if they  were not  required  to  hand  over  possession  till  the  amount together with the compensation for improvements was paid  in full  to them, they could not have the use of the  money  as well.   In our opinion, the mortgagees must pay interest  on the  amount  paid  by  the  mortgagors  from  the  date   of withdrawal  of the amount till possession was  delivered  to the  mortgagors at 6 % per annum simple.  The  extra  amount due to the mortgagees by way of com- 853 sensation will be deductible and accounts shall be  adjusted between the parties accordingly. The  appeal is thus partly allowed as indicated  above.   In view  of the failure on the main point, the appellants  must pay the costs of the appeal to the respondents. Appeal partly allowed.