Madras High Court
V. RAMASWAMI,RATNAM
M.Somasundaram Pillai - Appellant
Versus
M.Ramaswamy - Respondent
Decided On : 01/25/1983
LIMITATION ACT - ACKNOWLEDGMENT OF LIABILITY - AMENDMENT OF PLAINT - MONEY DECREE - RATABLE DISTRIBUTION - [LIMITATION ACT, 1963 - SECTION 19] [CIVIL PROCEDURE CODE, 1908 - ORDER VII RULE 6, SECTION 73] - ACKNOWLEDGMENT OF LIABILITY SAVES SUIT FROM LIMITATION - AMENDMENT OF PLAINT PERMITTED TO RELY ON ACKNOWLEDGMENT - MONEY DECREE GRANTED AGAINST FIRST DEFENDANT - RATABLE DISTRIBUTION TO BE DECIDED ON APPLICATION UNDER SECTION 73 OF CIVIL PROCEDURE CODE.
Fact of the Case:
Plaintiff filed a suit to set aside a claim order or, in the alternative, to pass a preliminary mortgage decree for the plaint amount with subsequent interest. The suit was dismissed by the trial court, and the plaintiff appealed.
Finding of the Court:
The court found that the equitable mortgage claimed by the plaintiff was not genuine, but that the plaintiff was entitled to a money decree against the first defendant based on an acknowledgment of liability made on 24-9-1972.
Issues: 1. Whether the plaintiff was entitled to a money decree against the first defendant, even though the equitable mortgage claimed by him was not genuine? 2. Whether the suit was barred by limitation? 3. Whether the plaintiff could rely on an acknowledgment of liability made on 24-9-1972 to save the suit from the bar of limitation?
Ratio Decidendi: 1. Yes, the plaintiff was entitled to a money decree against the first defendant, even though the equitable mortgage claimed by him was not genuine, because the first defendant had remained ex parte and had not questioned his liability. 2. Yes, the suit was barred by limitation, as the cause of action arose in April 1967 and the suit was filed on 25-11-1974. 3. Yes, the plaintiff could rely on an acknowledgment of liability made on 24-9-1972 to save the suit from the bar of limitation, as the proviso to Order VII Rule 6 of the Civil Procedure Code allowed the court to permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint, provided that such ground was not inconsistent with the ground set out in the plaint.
Final Decision: The appeal was allowed, the decree and judgment of the court below dismissing the suit in its entirety was set aside, and the suit was decreed as against the first defendant directing him to pay the suit claim to the plaintiff. The suit as against the second and the third defendants was dismissed.
V. RAMASWAMI, J. :- The plaintiff is the appellant. He filed the suit to set aside a claim order dated 20-9-1974 passed in E. A. 541 of 1973 in O.S. 173 of 1971 on the file of the learned Subordinate Judge, Tirunelveli or, in the alternative to pass a preliminary mortgage decree for the plaint amount with subsequent interest. The total amount claimed in the suit was Rs. 56.615. The suit O.S. 173 of 1971 was filed by the second defendant against the first defendant on 23-12-1971 for the recovery certain amount of money and that was decreed on 31-1-1973. In execution the said decree, the second defendant attached certain immovable properties of the first defendant on 10-7-1973, and brought the properties to sale. At that time the plaintiff who is the elder brother of the first defendant filed E. A. 7 of 1973 praying that the properties should be sold subject to an equitable mortgage in his favour on the ground that there were certain money dealings between him and his brother and a sum of Rs. 56615 was due and as security for the payment of the money, the first defendant had equitably mortgaged the suit Properties. That petition was dismissed. Thereafter the present suit has been filed.
2. The second defendant contended that the equitable mortgage claimed by the Plaintiff in his favour was not genuine, that it was created for the purposes of depriving the second defendant of the fruits of his decree and that in fact the first defendant did not owe any money at all to the plaintiff and because of the relationship between them. collusively and in order to deprive the right of the second defendant, proceed against the first defendant, they have created certain bogus transactions of dealings.
3. It may be mentioned that the first defendant remained ex parte.
4. The trial court did not believe the pleas of the plaintiff regarding the money dealings between the plaintiff and the first defendant and held that no money was due to the plaintiff on such accounts. The court below also held that the equitable mortgage pleaded was not genuine.
5. In this appeal the plaintiff did not question the finding on the genuineness or validity of the equitable mortgage claimed by him. However, the learned counsel for the appellant contended that the appellant was 'entitled to a money decree against the first defendant especially when he had remained ex parte, and did not deny his liability. The learned counsel for the second defendant, however, argued that the plaintiff was not to be given any decree unless he satisfies this court that he is entitled to such a decree on the ground that any decree obtained by him might in a future execution proceeding affect the chances of the second defendant to recover the full decree amount from the first defendant. The learned counsel for the second defendant also contended that on the face of it if the suit were to be tried only for the money claim, the suit is barred by limitation.
6. The allegation in the plaint is that the borrowing, on the basis of a running account, started from April 1967. The account was verified and settled and a sum of Rs. 13000/- was found due by way of principal. On 20-2-1971. for the said sum of Rs. 13000 the first defendant executed a passbook in favour of the plaintiff undertaking to repay the same with interest at 18 per cent per annum and also agreed to pay the same rate of interest for the future borrowings also. He further alleged that there was a running account and the first defendant was periodically borrowing from the plaintiff and there were also some repayments. On 4-2-1972 the first defendant is alleged to have created an equitable mortgage by deposit of title deeds with regard to the plaint schedule properties and gave a letter on that date along with the registration copy of partition deed dated 17-1-1927 as his title deed. It is further stated that even after the execution of the equitable mortgage the first defendant continued to borrow and a sum of Rs. 38000 was
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