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CASE NO.: Appeal (civil)  840 of 2000

PETITIONER: Prabhakaran & Ors.                             

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

DATE OF JUDGMENT: 20/03/2006

BENCH: Arijit Pasayat & R. V. Raveendran

JUDGMENT: J U D G M E N T

RAVEENDRAN, J.

       This appeal by special leave is filed by the legal  representatives of the plaintiffs in a suit for redemption of  mortgage.  

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

2.1)    One Manickam Pillai obtained a loan of Rs.300/- from   Krishna Pillai and mortgaged his property situated in  Prithivimangalam Village, Thyagadurgam Taluk, (for short ’the  suit property’) in favour of the said Krishna Pillai under a  usufructuary mortgage deed dated 7.9.1935 (Ex.A-1). The deed  provided that mortgagee is entitled to be in possession of the  mortgaged property in lieu of interest till redemption.

2.2)    The mortgagee (Krishna Pillai) assigned the said  mortgage in favour of one Soundararaja Iyenger (also known as  Soundararaja Achariar) under registered deed dated 12.2.1954  (Ex.A-3) by receiving Rs.300/- from the assignee and delivered  possession of the suit property to the assignee. The said  assignee, Soundararaja  Iyenger died leaving him surviving his  widow Jayalakshmi Ammal and son Krishnaswamy Iyenger  (defendants 1 and 2 in the suit).

2.3)    The mortgagor Manickam Pillai died some years after  executing the mortgage deed, survived by his widow and four  daughters. His widow and first daughter Kuppammal died  subsequently. The second daughter also died leaving behind her  son Thukkaram. His third daughter Yasodai Ammal and  Thukkaram settled their share/interest in the right of redemption  in favour of  the fourth daughter of Manickam Pillai, namely,  Sakkubai Ammal (first plaintiff) under registered deed dated  24.8.1981. Before such gift/settlement, Thukkaram, Yasodai  Ammal and Sakkubai Ammal issued a notice on 21.8.1977 for  redemption of the mortgage. Defendants 1 and 2 sent a reply  dated 26.8.1977 refusing to comply on the ground that they  were not in possession of the suit property and one Azhagiri  Pillai (third defendant in the suit) was in possession of the  property. Thereafter, a notice dated 9.10.1977 was also sent to  Azhagiri Pillai who sent a reply dated 26.10.1977 repudiating  the claim and setting up an oral sale in his favour in December,

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1953/January, 1954.

3.      The said Sakkubai Ammal filed the said suit - O.S.  No.1079/81 on the file of the District Munsiff, Kallakurichi on  16.11.1981 for the following reliefs : (i) a preliminary decree  for redemption of the usufructuary mortgage dated 7.9.1935 in  regard to the suit property, (ii) for an account in respect of the  income therefrom, from the date of discharge of the mortgage;   and (iii) for a final decree for redemption of the mortgage.  Plaintiffs contended that the mortgage and the right of  redemption were subsisting, in view of the assignment dated  12.2.1954 being an ’acknowledgement’ and that the mortgage  debt stood discharged by Section 9 of the Tamil Nadu Debt  Relief Act, 1979 (for short ’the Debt Relief Act’). In the said  suit, Jayalakshmi Ammal and Krishnaswamy Iyenger (legal  heirs of the assigneee of the mortgage) were impleaded as  defendants 1 and 2. Azhagiri Pillai who was in possession,  either as a licensee or lessee of Soundararaja Iyenger, was  impleaded as the third defendant. As the said defendant had let  out the suit property to Raghamathulla Sahib and Mayava  Pandithan, they were impleaded as defendants 4 and 5.            4.      Defendants 1 and 2 as also defendants 4 and 5 remained  ex parte. Only the third defendant, (Azhagiri Pillai) contested  the suit, alleging that he was the cousin of first plaintiff; that  apart from the mortgage dated 7.9.1935 created by Manickam  Pillai, the suit property was mortgaged by the daughters of  Manickam Pillai to one Raju Pillai on 22.6.1948 for Rs. 200/-;   that they (first plaintiff and her sisters) approached him for  discharging the said debts; that the property was valued at  Rs.1,000/-, and it was agreed that he should pay them Rs.400/-  and retain the balance of Rs.600/- to discharge the two  mortgage debts; that accordingly he paid Rs.400/- to first  plaintiff and her sisters in December, 1953 or January, 1954  and purchased the suit property under an oral sale; that as he did  not have the funds to pay the mortgage debts, his friend  Soundararaja Iyenger came to his rescue with the understanding  that he (Soundararaja Iyenger) would discharge the  usufructuary mortgage in favour of Krishna Pillai and simple  mortgage in favour of Raju Pillai and obtain assignments of the  mortgages, and thereafter receive the amount from the third  defendant as and when he was able to pay the amount; that in  pursuance of such arrangement, Soundararaja Iyenger paid the  mortgage amount to Krishna Pillai and Raju Pillai and obtained   assignments dated 12.2.1954 in his favour; that subsequently in  the year 1960, the third defendant paid the amount to  Soundararaja Iyenger; and that he obtained possession of the  suit property in the year 1954. He contended that he perfected  his title by adverse possession. He also contended that the  mortgage dated 7.9.1935 was no longer subsisting and the  plaintiffs had no  right of redemption.

5.      During the pendency of the suit, the first plaintiff  Sakkubai Ammal died. Her legal heirs, that is, husband  Vijayarangam Pillai, sons Prabhakaran and Venkatesan, and  daughter Vatchala were impleaded as plaintiff Nos.3, 2, 5 and 4  respectively. After evidence, the trial court dismissed the suit  by judgment and decree dated 30.10.1987 holding that the  mortgage deed dated 7.9.1935 was not subsisting as on the date  of the suit, that the right of redemption was barred by  limitation, and the third defendant had perfected his title over  the suit property by adverse possession.

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

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the Subordinate Court, Virudachalam. The first appellate court  allowed the said appeal by judgment and decree dated  18.12.1990. It held that the oral sale put forth by the third  defendant was not proved and at all events void and invalid as  any sale for a consideration of more than Rs.100/- could be  only by a registered instrument. It held that even if the third  defendant was in possession for more than 12 years, such  possession by the third defendant was claimed through the  mortgagee, and did not become adverse to plaintiffs nor confer  title on third defendant by adverse possession. The appellate  court also held that having regard to the acknowledgement  contained in the deed of assignment of the mortgage dated  12.2.1954 by Krishna Pillai,  the mortgage was subsisting and  the first plaintiff was entitled to file a suit for redemption within  30 years from 12.2.1954, and, therefore, the suit filed in the  year 1981 was not barred by limitation.  It also held that by  virtue of the mortgagee and his assignee being in possession of  the mortgaged property for more than 10 years, the mortgage  debt was discharged under Section 9 of the Debt Relief Act.  Consequently, the first appellate court allowed the appeal, set  aside the judgment and decree of the trial court and granted a  preliminary decree for redemption with costs, as prayed.  

7.      The third defendant filed Second Appeal No.99/1991  before the Madras High Court against the said judgment. He  also filed an application (CMP No. 5963 of 1997 in the second  appeal) for amendment of the decree by amending the  description of the suit property so as to be in conformity with  the deed of mortgage dated 7.9.1935 (Ex. A1).

8.      A learned Single Judge of the Madras High Court by  judgment dated 1.9.1999, allowed the second appeal, and  consequently, dismissed the suit, holding as follows :-

(i)     The concurrent finding of fact recorded by the trial  court and first appellate court that Azhagiri Pillai  (third defendant), did not acquire title by adverse  possession, did not call for interference.  

(ii)    The assignment of mortgage by the mortgagee  under deed dated 12.2.1954 did not amount to  acknowledgement for extending limitation for filing  a suit for redemption.

(iii)   The mortgage was executed on 7.9.1935. The  period of limitation for a suit for redemption was 30  years under Article 61(a) of the Limitation Act,  1963, while the period of limitation was 60 years  under the corresponding Article 148 of the  Limitation Act, 1908. Where the period of  limitation under the new Act was shorter, having  regard to Section 30 of the new Act, the suit ought  to have been filed within 7 years from the date of  commencement of the said Act. The new Act came  into force on 1.1.1964. Therefore, the last date for  filing the suit for redemption was 1.1.1971 and the  suit filed on 16.11.1981 was barred by limitation.

(iv)    The plaintiffs were not entitled to any relief under  the provisions of the Tamil Nadu Debt Relief Act,  1979, as the mortgage was not subsisting on  15.7.1978, when the said Act came into force.  

(v)     The plaintiffs could not alternatively claim relief  under the Tamil Nadu Agriculturist Relief Act,

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1938 (Act 4 of 1938) as amended by Act 24 of  1950, as such a case was not pleaded.    

9.    In this appeal filed by the plaintiffs, the contentions urged  to challenge the decision of the High Court, give rise to the  following questions for consideration :  

(i)     Whether the assignment of the usufructuary  mortgage by Krishna Pillai in favour of  Soundararaja Iyenger under deed dated 12.2.1954  amounted to an ’acknowledgement’ under section  18 of Limitation Act, 1963, thereby enabling  plaintiffs to compute a fresh period of limitation for  the suit for redemption, from the date of such  acknowledgement.  

(ii)    Whether the mortgage debt under the deed of  mortgage dated 7.9.1935 stood discharged under  section 9 of the Tamil Nadu Debt Relief Act, 1979.

(iii)   If the answer to the above two questions is in the  affirmative, to what relief plaintiffs are entitled to.  

Re : Question (i) :

10.     An usufructuary mortgage is a transfer by the owner  (mortgagor) of an interest in an immovable property for  securing the amount advanced/to be advanced by the creditor  (mortgagee), under which possession of the property is  delivered to the mortgagee with authority to retain such  possession and enjoy the rents and profits therefrom, until the  debt is paid (vide Section 58(d) of the Transfer of Property Act,  1882, for short ’T.P. Act’). The owner/mortgagor, who  continues to hold the bundle of rights constituting ownership,  minus the right to possession, has the right to recover  possession of the mortgaged property by paying the mortgage  debt. The said right to recover possession (along with the right  to receive back the documents relating to the mortgaged  property and the right to obtain a deed of  reconveyance/retransfer of the mortgaged property) is known as  the right of redemption of the mortgagor and is statutorily  recognized in section 60 of T.P. Act. Such right of redemption  can be extinguished during the subsistence of the mortgage only  by the act of parties or by decree of a court. This Court in  Jayasingh D. Mhoprekar vs. Krishna B. Patil [1985 (4) SCC  162] observed :

"It is well-settled that the right of redemption under a  mortgage deed can come to an end only in a manner known  to law. Such extinguishment of right can take place by a  contract between the parties, by a merger or by a statutory  provision which debars the mortgagor from redeeming the  mortgage. A mortgagee who has entered into possession of  the mortgaged property under a mortgage will have to give  up possession of the property when the suit for redemption  is filed unless he is able to show that the right of  redemption has come to an end or that the suit is liable to  be dismissed on some other valid ground. This flows from  the legal principle which is applicable to all mortgages,  namely, "Once a mortgage, always a mortgage"."

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        11.     Article 148 of the Limitation Act, 1908 (referred to as  ’old Act’) provided a limitation of 60 years for a suit against a  mortgagee, to redeem or to recover possession of immovable  property mortgaged. The corresponding provision in the  Limitation Act, 1963 (’new Act’ or ’Limitation Act’ for short),  is Article 61(a) which provides that the period of limitation for  a suit by a mortgagor to redeem or recover possession of the  immovable property mortgaged is 30 years. The period of  limitation begins to run when the right to redeem or to recover  possession accrues.  In the case of a usufructuary mortgage  which does not fix any date for repayment of the mortgage  money, but merely stipulates that the mortgagee is entitled to be  in possession till redemption, the right to redeem would accrue  immediately on execution of the mortgage deed and the  mortgagor has to file a suit for redemption within 30 years from  the date of the mortgage.  Section 27 of the Limitation Act  provides that "at the determination of the period hereby limited  to any person for instituting a suit for possession of any  property, his right to such property shall be extinguished". This  would mean that on the expiry of the period of limitation  prescribed under the Act, the mortgagor would lose his right to  redeem and the mortgagee would become entitled to continue in  possession as the full owner.  

12.      Section 18 of the new Act (corresponding to section 19  of the old Act) deals with the effect of acknowledgment in  writing, the relevant portion whereof reads thus :

"18. Effect of acknowledgment in writing.- (1) Where, before the  expiration of the prescribed period for a suit or application in  respect of any property or right, an acknowledgement of liability in  respect of such property or right has been made in writing signed  by the party against whom such property or right is claimed, or by  any person through whom he derives his title or liability, a fresh  period of limitation shall be computed from the time when the  acknowledgement was so signed.  

(2) \005\005.. Explanation.- For the purposes of this section,- (a)        an acknowledgement may be sufficient though it  omits to specify the exact nature of the property or  right, or avers that the time for payment, delivery,  performance or enjoyment has not yet come or is  accompanied by a refusal to pay, deliver, perform or  permit to enjoy, or is coupled with a claim to set off,  or is addressed to a person other than a person entitled  to the property or right,  \005\005\005\005."

13.     Earlier, there were two views as to what constituted an  acknowledgement in regard to a suit for redemption of a  mortgage. One view was that an admission by a mortgagee, in a  subsequent transaction, that he holds the property as a  mortgagee was a sufficient acknowledgement that the  mortgagee thought and believed that he was liable for the  property being ’redeemed’ from him by the mortgagor as on the  date of that statement. The other view was that, to constitute an  acknowledgement, the statement must be an admission by the  mortgagee of the jural relationship in relation to the liability or  the right or the property claimed and that such a statement must  be shown to have been made with a consciousness and an  intention of admitting such a right or liability. The controversy

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

14.     In Shapur Fredoom Mazda v. Durga Prosad Chamaria  (AIR 1961 SC 1236), this Court explained the essentials of an  acknowledgement by considering the scope of Section 19 of the  old Act :   

"\005 acknowledgement as prescribed by section 19 merely  renews debt; it does not create a new right of action. It is a  mere acknowledgement of the liability in respect of the  right in question; it need not be accompanied by a promise  to pay either expressly or even by implication.  

The statement on which a plea of acknowledgement is  based must relate to a present subsisting liability though the  exact nature or the specific character of the said liability  may not be indicated in words. Words used in the  acknowledgement must, however, indicate the existence of  jural relationship between the parties such as that of debtor  and creditor, and it must appear that the statement is made  with the intention to admit such jural relationship. Such  intention can be inferred by implication from the nature of  the admission, and need not be expressed in words. If the  statement is fairly clear, then the intention to admit jural  relationship may be implied from it.  

In construing words used in the statements made in writing  on which a plea of acknowledgement rests oral evidence  has been expressly excluded but surrounding circumstances  can always be considered. \005 The effect of the words used  in a particular document must inevitably depend upon the  context in which the words are used and would always be  conditioned by the tenor of the said document\005..   

Stated generally, courts lean in favour of a liberal  construction of such statements though it does not mean  that where no admission is made one should be inferred, or  where a statement was made clearly without intending to  admit the existence of jural relationship such intention  could be fastened on the maker of the statement by an  involved or far-fetched process of reasoning."  

15.     The question was again examined with reference to the  right of redemption in Tilak Ram v. Nathu (AIR 1967 SC 935)  and this Court held :

"The right of redemption no doubt is of the essence of and  inherent in a transaction of mortgage. But the statement in  question must relate to the subsisting liability or the right  claimed. Where the statement is relied on as expressing  jural relationship it must show that it was made with the  intention of admitting such jural relationship subsisting at  the time when it was made. It follows that where a  statement setting out jural relationship is made clearly  without intending to admit its existence, an intention to  admit cannot be imposed on its maker by an involved or a   far-fetched process of reasoning."  

After examining the wording of the document which was put  forth as an ’acknowledgement’, in that case, this Court  observed as follows, on the facts of that case :

"These statements were clearly made for the purpose of  describing his own rights which he was selling under this

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deed. But there is nothing in this document to show that he  referred to the said mortgages with the intention of  admitting his jural relationship with his mortgagors and,  therefore, of his subsisting liability as the mortgagee  thereunder of being redeemed."  

The principles laid down in S.F. MAZDA (supra) and TILAK  RAM (supra) were reiterated in Lakhmi Ratan Cotton Mills Co.  Ltd., vs. The Aluminium Corporation of India Ltd., (AIR 1971  SC 1482).  

16.     This Court had occasion to consider the question again in  Reet Mohinder Singh Sekhon Vs. Mohinder Parkash (1989 (4)  SCC 30). In that case, the suit property was mortgaged on  22.5.1886 and the mortgagee sold his mortgage rights under a  Sale Deed dated 1.11.1913 which contained the following  recitals :-  

"Now I of my own accord have sold all my mortgagee  rights along with the original mortgage consideration and  interest which according to the terms of the aforesaid  mortgage deed has accrued and is payable to the instant  vendor . . . The rights and interest regarding recovery of  original mortgage money and interest according to  mortgage deeds executed by Jangi Khan original mortgagor  deceased and redemption of the mortgaged land which  hencetofore vested in the instant vendor stand vested in the  purchaser\005"    

The successors-in-interest of the mortgagor filed a suit for  redemption on 28.12.1968 contending that the aforesaid recitals  amounted to an acknowledgement of the right of the mortgagor  to redeem the property. The suit was resisted on the ground that  the recitals in the sale deed dated 1.11.1913 did not serve as an  acknowledgement. Negativing the said objection, this Court  held :

"\005 It is true, as pointed out in Tilak Ram v. Nathu (AIR  1967 SC 935), that the period of limitation cannot be  extended by a mere passing recital regarding the factum of  the mortgage but that the statement on which the plea of an  acknowledgement is based must relate to a subsisting  liability. The words used must indicate the jural  relationship between the parties and it must appear that  such a statement is made with the intention of admitting  such jural relationship. But, in our opinion, the recitals in  the sale deed on November 1, 1913 fulfil the above  requirements. The fact of Nanak Chand having obtained a  mortgage with possession had already been recited in an  earlier part of the sale deed. The passages in the sale deed,  which have been extracted by us above, contain two  specific recitals. The first is that "the original consideration  and interest under had accrued and was payable to the  instant vendor". These words acknowledge that the  mortgage had not been redeemed and that the mortgage  moneys remained outstanding to the mortgagee from the  mortgagor as on the date of the sale deed. The second  recital is even more specific. It says that what stands  transferred to the purchaser is not only the right of the  mortgagee for recovering the principal amounts and interest  according to the mortgage deed (which, as earlier stated,  still remained outstanding) but also "the rights and interest"  regarding the redemption of the mortgaged land. These

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words are, of course, a little inappropriate because the right  of redemption is in the mortgagor and not in the mortgagee.  But, read as a whole, the second sentence we have quoted  here from the sale deed clearly manifests an intention on  the part of the mortgagee to acknowledge that his right to  recover the moneys under the mortgage deed as well as his  liability to have the property redeemed by the mortgagor in  the event of his paying off the moneys due under the  instrument both stand vested in the purchaser. We are of  the opinion that it is not correct to treat the recitals in the  document as a mere narration of the previous mortgage that  had been created on the property. The words spell out a  clear intention that the moneys due under the mortgage still  remained unpaid and also that the mortgagor had a  subsisting right of redemption which he could enforce  against the mortgagee. In this view of the matter the  contention on behalf of the appellant that the recitals in the  document of November 1, 1913 constituted an  acknowledgement of liability for redemption within the  meaning of Section 19 of the Limitation Act deserves to be  accepted."            

17.     The said principles relating to section 19 of the old Act  fully apply to ’acknowledgements’ under section 18 of the new  Act. To summarise, a statement (in writing and signed) by a  mortgagee can be construed as an ’acknowledgement’ under  Section 18 of the Limitation Act, if it fulfils the following  requirements :

(i)     The acknowledgement of liability must relate to a  subsisting mortgage.

(ii)    The acknowledgement need not be in a document  addressed to the mortgagor (person entitled to the  property or right). But it should be made by the  mortgagee (the person under liability).  

(iii)   The words used in the acknowledgement must indicate  the existence of jural relationship between the parties and  it must appear that the statement is made by the  mortgagee with the intention of admitting the jural  relationship with the mortgagor. (Such intention of admitting the jural relationship need  not be in express terms, but can be inferred or implied  from the nature of admission and the words used, though  oral evidence as to the meaning and intent of such words  is excluded.)   (iv)    Where the statement by the mortgagee in the subsequent  document (say, deed of assignment) merely refers to the  mortgage in his favour which is being assigned,  without  the intention of admitting the jural relationship with the  mortgagor, it will not be considered to be an  ’acknowledgement’.

18.     There is no difficulty in holding a statement to be an  ’acknowledgement’ under section 18, where the mortgagee  makes a direct admission that he is liable to deliver back  possession to the mortgagor or that the mortgagor has the right  to redeem the property from the mortgage. But when there is no  direct admission, but an acknowledgement is to be implied  from an admission of jural relationship, we have noticed some  confusion in the decisions rendered, as to what is an "admission  of jural relationship". The term ’jural’ means ’legal’ or

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’pertaining to rights and obligations’. ’Jural relationship  between parties’ means legal relationship between parties with  reference to their rights and obligations. In a mortgage, both the  mortgagor and the mortgagee, have certain rights and  obligations against each other. The rights/obligations of a  mortgagor or a mortgagee co-exist, like the two sides of a coin.  The mortgagor’s right of redemption is co-extensive with the  mortgagee’s right of sale or foreclosure (where such right is  recognized in law). Any statement by either, admitting the jural  relationship with the other, will extend the limitation for a suit  by that other, against the person acknowledging. It follows that  when a mortgagee makes a statement about his right to recover  the mortgage amount, such statement impliedly acknowledges  the corresponding right of redemption of the mortgagor.  Further, a statement admitting jural relationship, need not refer  to or reiterate the rights and obligations  flowing therefrom.  Where a party to the mortgage, by his statement, admits the  existence of the mortgage or his rights under the mortgage, he  admits all legal incidents of the mortgage including rights and  obligations of both parties, that is mortgagee and mortgagor.  

19.     It is contended by the counsel for the respondents that the   statement by the mortgagee in the deed of assignment, that the  assignee will be entitled to receive the amount under the  original mortgage, is only an assurance made by a creditor to  his assignee about the assignee’s rights in respect of the  mortgage assigned to him, and such a statement cannot be said  to be an admission of jural relationship with the mortgagor. It is  pointed out that the earlier view, that when a mortgagee sells or  assigns his mortgage rights, the very fact that he was selling or  assigning his rights was a clear acknowledgement of a  subsisting mortgage and of his subsisting rights as a mortgagee,  is no longer valid. It also pointed out that in TILAK RAM  (supra), this Court clarified that the act of  assignment/transfer/sale of the mortgage rights, by the  mortgagee, by itself will not amount to an acknowledgement, if  the document merely described the status of the mortgagee or  described the right that was being transferred, without  indicating any intention to admit his jural relationship with the  mortgagor. It is, therefore, contended that the assignment deed  in this case cannot be considered to be an ’acknowledgement’.

20.     The contention ignores the purport and scope of Section  18 and proceeds on the assumption that an acknowledgement  can be made only by a ’debtor’ and there is no question of a  ’creditor’ making an acknowledgement. Section 18 of the Act  deals not only with acknowledgement of debts, but  acknowledgements with reference to all suits involving  properties or rights for which limitation is prescribed under the  Act. It sets out the circumstances in which a fresh period of  limitation can be computed for a suit. If the suit is one for  recovery of the amount due under an on-demand  promissory  note, no doubt, only an acknowledgement by the debtor can  extend the period of limitation. But in regard to mortgages, T.P.  Act has created and recognized rights as well as obligations  both in the mortgagor and the mortgagee (vide Chapter IV of  the Transfer of Property Act, in particular, Sections 60 and 67).  Section 18 of the new Act provides that where before the expiry  of the prescribed period for a suit in respect of any property or  right, an acknowledgement of liability in respect of such  property or right has been made by the party against whom such  property or right is claimed, a fresh period of limitation shall be  computed from the time when the acknowledgement was so  signed. An acknowledgement under Section 18 can, therefore,

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be by a  mortgagee also, and such acknowledgement will  extend the limitation for a suit against the mortgagee in respect  of the property or right claimed against him.  

21.     We may illustrate as to what is a mere reference or  description of the jural relationship and what constitutes an  intention to admit the jural relationship. If the relevant portion  of the Deed of assignment, sought to be relied on as an  acknowledgement merely stated that "X mortgaged the  schedule property in my favour under deed of usufructuary  mortgage dated (date) and I hereby assign the said mortgage in  your favour", it will not be an ’acknowledgement’ under section  18 of the Act. This is because it refers only to the jural  relationship, but does not show an intention to admit the jural  relationship with the mortgagor or admit his subsisting liability  as mortgagee of being redeemed. But the position will be  different, if the assignment deed further stated : "The said  mortgage is subsisting" or "The rights and obligations under the  said mortgage are enforceable", or "The assignee is entitled to  all benefits under the said mortgage", or "The assignee is  entitled to receive the amount advanced under the said  mortgage", or "The assignee is entitled to all rights and liable  for all obligations under the said mortgage", or "The assignee is  entitled to continue in possession until the mortgage is  redeemed". The use of any such words (which are illustrative  and not exhaustive) would show an intention to admit the jural  relationship, and therefore, amount to acknowledgement,  though they may not refer to the mortgagor’s right of  redemption. Ultimately, it is not the form of the words, but the  intention to admit the jural relationship with the mortgagor, that  will determine whether a statement is an acknowledgement.

22.     In this case, the operative portion of the deed of  assignment dated 12.2.1954 (Ex.A-3) states that in  consideration of having received Rs.300/-, the mortgagee  (Krishna Pillai) was assigning the mortgage under deed dated  7.9.1935 executed in his favour by Manickam Pillai and  delivered possession of the mortgaged property to Soundararaja  Iyenger. The deed further states that the assignee  (Soundararaaja Iyenger) was entitled to receive all the amounts  as per the original mortgage. The further statement that the  assignee is entitled to receive the amount as per the original  mortgage is an assertion of the right of the mortgagee against  the mortgagor under the mortgage, and consequently, an  admission of the subsistence of the mortgage and of the jural  relationship between the mortgagee and the mortgagor. It is an  acknowledgement under Section 18 of the Act. The High Court  though referred to the said further statement in the deed of  assignment, missed its significance and erroneously held that  the deed contained only a passing reference to the mortgage,  and not a conscious acknowledgement.  

23.     When the said deed of assignment was executed on  12.2.1954, the mortgage dated 7.9.1935 was subsisting, as the  period of limitation at that time, was 60 years. In view of the  admission of jural relationship contained  in the assignment  deed, operating as an acknowledgement of liability, a fresh  period of limitation started from 12.2.1954. When the suit was  filed on 16.11.1981, the new Limitation Act was in force under  which the period of limitation was 30 years. When the 30 years  period is computed from 12.2.1954, the suit filed in the year  1981 was clearly within limitation.

Re : question (ii) :

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24.     The plaintiffs have made the necessary averments in the  plaint for invoking and seeking relief under the Tamil Nadu  Debt Relief Act, 1979. The plaintiffs contended that having  regard to the fact that the mortgagee and his successors had  been in possession for more than ten years, the mortgage stood  discharged with effect from 14.7.1978 under section 9 (5)(a) of  the Debt Relief Act and therefore, they are entitled to sue for  redemption.  

25.     The trial court held that the question of the mortgage  being discharged under the provisions of the Debt Relief Act,  1979, would arise only if the mortgage dated 9.7.1935 was  subsisting as on 15.7.1978 when the said Debt Relief Act came  into force. As it was of the view that the right to redeem was  barred by limitation as on 1.1.1971, and the mortgage was not  subsisting when the Debt Relief Act came into force, it held  that no relief could be claimed by the plaintiffs with reference  to the Debt Relief Act.  

26.     On the other hand, the first Appellate Court held that the  mortgage was subsisting on the date when the Debt Relief Act  came into force and therefore, the mortgage debt got discharged  under section 9 of the Debt Relief Act with effect from  14.7.1978, and the suit for redemption for redemption was not  barred. The High Court in second appeal held that the deed of  assignment dated 12.2.1954 did not amount to an  acknowledgement and consequently, the limitation for a suit for  redemption of the mortgage expired on 1.1.1971 having regard  to the provisions of section 30 read with Article 61(a) of the  Limitation Act. It also held that as the mortgage was not  subsisting when the Debt Relief Act came into force on  15.12.1978, the question of mortgage getting discharged under  Section 9 of the Debt Relief Act did not arise.  

27.     While dealing with the first question, we have held that  the period of limitation for the suit for redemption had to be  reckoned from 12.2.1954 and not from 7.9.1935. Therefore,  when the Debt Relief Act, came into force on 15.7.1978, the  mortgage was very much subsisting. Section 9 of the Debt  Relief Act contains special provisions in respect of mortgages.  Sub-section (1) of section 9 provides that the provisions of the  said section applies to all mortgages executed at any time  before 14.7.1978 and by virtue of which the mortgagee is in  possession of the property mortgaged to him. Sub-section (5) of  section 9 provides that where the mortgagee has been in  possession of the mortgaged property for an aggregate period of  10 years or more, then, the mortgage debt shall be deemed to  have been wholly discharged with effect from expiry of the  period of ten years or where such period expired before  14.7.1978, with effect from 14.7.1978. The said provision  applies as the mortgage transaction does not fall under any of  the exceptions enumerated in section 4 of the said Act. As the  mortgagee and his successors were in possession of the  mortgaged property ever since 7.9.1935, that is, for more than  10 years as on the date when the Act came into force, the said  mortgage debt stood wholly discharged with effect from  14.7.1978.

Re : Question (iii) :

28.     As the mortgage stood discharged on 14.7.1978, the  plaintiffs will be entitled to a final decree for redemption  without the need to undergo the formality of a preliminary

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

29.     The next question is whether the plaintiffs are entitled to  a direction for accounts of the income/profits from the property  from 14.7.1978. The provisions of Order 34 Rules 7, 8, 8A, 9,  10 and 10A of Code of Civil  Procedure are relevant in addition  to the provisions of T.P. Act. It is no doubt true that a decree for  redemption would include a direction for entire accounts  between the parties in relation to the mortgage. But the question  of directing accounts would arise only where it is necessary to  find out what is due from the mortgagor to the mortgagee, or  whether there is any over payment by the mortgagor to the  mortgagee. In this case, the mortgage was an usufructuary  mortgage, where the mortgagee was entitled to retain  possession until the mortgage money was paid. When the  mortgage debt got statutorily discharged, the mortgagee became  liable to deliver back possession to the mortgagor. In such a  situation, what the mortgagors-plaintiffs can claim from the  mortgagee, is not rendition of accounts, but mesne profits for  wrongful possession from the date of discharge of the mortgage  debt. There is, therefore, no question of accounting either of the  amounts due by the mortgagor to the mortgagee or of any  accounting of over-payments or for refund of any over- payments by the mortgagee. In the suit, plaintiffs only sought  rendition of accounts but did not claim mesne profits nor paid  any court fee in regard to past mesne profits. Plaintiffs cannot,  under the guise of a claim for accounts, seek a decree for mesne  profits. After obtaining possession, it is open to them to sue for  such mesne profits as is permissible in law.

30.     This takes us to the application filed by the third  defendant before the High Court for amendment of the  description of the property. The third defendant contended that  the description of the property in the plaint schedule was not in  accordance with the mortgage deed dated 7.5.1935, but referred  to a larger area with reference to the deed of settlement  executed by Thukkaram and Yasodhabai Ammal in favour of  the first plaintiff on 24.8.1981 (Ex. A-2). The relief of  redemption can be only in regard to the property mortgaged  under the deed of mortgage and not in regard to any other  property. Therefore, the decree has to be amended so as to bring  the description of the mortgaged property in consonance with   the description of the property mortgaged under the deed of  mortgage dated 7.9.1935 (Ex. A-1)

31.     In view of the above, this appeal is allowed as follows :-   a)      The judgment of the High Court is set aside and the  suit is decreed, holding that the plaintiffs are entitled  to a decree for redemption in regard to the suit  property. Final decree shall be drawn accordingly.  

b)      The prayer for rendition of accounts is rejected.  

c)      The schedule to the decree containing the description  of the mortgaged property shall be amended so as to  bring it in conformity with the schedule to the  mortgage deed dated 7.9.1935.  

d)      Appellants/plaintiffs will be entitled to costs  throughout.