Implied covenant to repay in Otti mortgage under Travancore customary law and extension of limitation period under S.20 of the Limitation Act.

1.Second Appeal by 1st defendant.

2. The appellant, in conjunction with his wife, had mortgaged the suit property with possession to the respondent on April 29, 1952. While in possession of the property the respondent was prosecuted by a stranger for wrongful entry into the property and convicted on March 12,1958. Averring that he had lost possession of the property, the respondent instituted this suit on August 7, 1958, for the mortgage money. The appellant contended that the respondent had not lost possession of the property and therefore a cause of action for money had not arisen and alternatively that the suit was barred by limitation. The courts below concurred to find the respondent to have lost possession of the propertsy and to decree the suit. Hence this second appeal.

3. It is contended here that there is no covenant to repay in the mortgage deed and that even if one is deemed to be implied that can be enforced only on a reconveyance of the property and also that the suit is barred by limitation.

4. The suit mortgage (Ext. P-1) is styled an Otti. Otti, in Travancore, is an anomalous mortgage in which a personal covenant to repay is implied. The respondent says he lost possession of the property in 1956 and the appellant says the respondent is still in possession of the property. As it is common case that the respondent had been in possession of the property till 1956 it may safely be assumed to be true. If that be so, the period of limitation being admittedly 6 years, the suit is saved by sub-S. 2 of S.20, Limitation Act, from bar of limitation. S.20 reads:

"20. (1) Where payment oh account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy, or by his duly authorised agent, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of a payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

(2) Where mortgaged land is in the possession of the mortgagee, the receipt of the rent or prodiae of such land shall be deemed to be a payment for the purpose of sub-section (1). n - Debt includes money payable under a decree or order of Court."

5. It is contended that even in regard to sub-section (2) an acknowledgment in writing is necessary to save limitation. Rustomji on Limitation (6th Edition, page 243) observes:

"S. 20 (2) ... applies whenever mortgaged land is, in fact, in the possession of the mortgages. When the receipt of produce or rent is regarded as payment, the requirements of the proviso (as to .handwriting etc.) may not be observed. The object of Sub-s. (2) is to dispense with actual payment and it is not controlled by the other provisions of Sub-s. (1). A suit by the mortgagee for sale is, for purpose of S.20, a suit to recover a debt, and therefore the mortgagee is entitled to rely on the receipt of produce of the mortgaged land for enlarging limitation."

The question arose before the Bombay High Court in Manikchand Bharmappa v. Rachappa Virsangappa (AIR. 1952 Bom. 226) when Chagla C. J., with concurrence of Gajendragadkar J. (as he then was), held:

"Sub-S. (2) makes the receipt of rent or produce by the mortgagee a payment for the purpose of sub-S. (1) including the purpose of the proviso. In other words, if rent is received by the mortgagee, then in the eye of the law the conditions of sub-section (1) and the proviso are satisfied. The receipt of the rent is just as good as if the mortgagor had made the payment and the payment appeared in his

writing or in the writing of the person who actually made the payment. Any other interpretation would make sub-S. (2) entirely nugatory." I am in respectful agreement with the above dicta. On the admitted facts in this case, a fresh period of limitation starts in 1956, and this suit, having been i