M. Somasundaram Pillai v. M. Ramaswamy — 1983 DIGILAW 62 (MAD)

Judgement 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. 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 due from the first defendant, to the plaintiff towards principal and a sum of Rs. 12684 towards interest as on 28-8-1972. 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 due from the first defendant, to the plaintiff towards principal and a sum of Rs. 12684 towards interest as on 28-8-1972. In the cause of action paragraph of the plaint it was stated that the cause of action for the suit arose from April 1967 when to borrowing began and on 4-2-1972 when the first defendant executed the equitable mortagage and on subsequent dates when the borrowing continued and on 20-9-1974 when the claim petition E. A. No. 541 of 1973, was dismissed already stated, the execution of the suitable mortgage on 4-2-1972 was found to be false and therefore could not save the period of limitation as an acknowledgment of liability. There is specific allegation as to what was last item of borrowing or what was date of any acknowledgment of liability which would save the suit from the bar of limitation. The only allegation found in the body of the plaint was that the sum of Rs. 13000 was found due as principal on 20-2-1971 and for that first defendant executed a pass book. Even if there was an acknowledgment on 20-2-1972, the suit which was filed on 25-11-1974 could not be saved. 7. Under Order VII Rule 6 of the Civil P. C. when a suit is instituted after the expiry of the period prescribed by law of limitation. the plaint shall show the ground upon which exemption from such law is claimed. In Ramaswami v. Anaiya Padayachi. AIR 1936 Mad 545 . Venkataramana Rao. J. held that it is obligatory as a matter of pleading to show the ground upon which exemption from limitation is clamied and consequently unless the plaint is amended it will not be open to a party to rely on an exemption not pleaded in the plaint. This decision was followed by a Division Bench of this Court to which one of us was a party in Sha Manmall Misrimall v. Radhkrishnan. (1971) 84 Mad LW 745 : ( AIR 1972 Mad 108 ). The Privy Council in Kalyan Mal v. Ahmad Uddin, AIR 1934 PC 208 further held that the plaintiff will not be allowed to show the ground of exemption at the trial by putting in evidence documentary such as acknowledgment of liability. 8. (1971) 84 Mad LW 745 : ( AIR 1972 Mad 108 ). The Privy Council in Kalyan Mal v. Ahmad Uddin, AIR 1934 PC 208 further held that the plaintiff will not be allowed to show the ground of exemption at the trial by putting in evidence documentary such as acknowledgment of liability. 8. The learned counsel for the appellant however, contended that in Ex. A. 7 which is the pass book referred to in the plaint the first defendant had signed on 24-9-1972 acknowledging his liability to pay the sum of Rs. 38000 and that that could he relied by him at the trial and even at this stage, in view of the amendment of O.VII R.6 of the Civil P. C. by the addition of a proviso. The proviso which was added by Central Act 104 of 1976 reads as follows- "Provided that the court may permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint if such ground is not inconsistent with the ground set out in the plaint." Though the proviso was added to Rule 6 subsequent to the filing of the suit and the decree thereon and during the pendency of the appeal, the learned counsel further contended, that since this is not one of those sections which are mentioned in S.97 of Act 104 of 1976 as not applicable to pending Proceedings and since generally amendment to procedural rules shall be taken as retroactive applicable to all pending proceedings, he is entitled to rely on the proviso. We are of the view that the learned counsel is well-founded in this contention. The objects and reasons for adding the Proviso reads as follows: "Rule 6 requires that a ground for exemption from limitation should be specifically pleaded in the plaint. Where, however, the ground for exemption from limitation is not specifically pleaded in the plaint, the question arises whether it can be pleaded later and whether any new ground for exemption from limitation should be consistent with the ground already specified in the plaint. Where, however, the ground for exemption from limitation is not specifically pleaded in the plaint, the question arises whether it can be pleaded later and whether any new ground for exemption from limitation should be consistent with the ground already specified in the plaint. A proviso is being added to Rule 6 to empower the court to permit the plaintiff to rely on a new ground for exemption so long as that ground is not inconsistent with the ground specified in the plaint." It is plausible to contend that the objects and reasons given above may be interpreted as meaning that the plaintiff may still have to amend the plaint as the use of the word 'pleader' is associated with the pleadings and not a claim of exemption on the basis of the evidence available. However, the plain language of the proviso shows that no such restricted meaning could be given if there are materials, by way of documentary or other evidence, to show that there was an acknowledgment of liability which could save the suit, that could be relied on by the plaintiff, subject, however, that such ground is not inconsistent with the grounds set out in the plaint. If read in conjunction with the objects and reasons the plaintiff will have to file an application for amendment of the plaint and then only he could claim such exemption. The proviso, in our view, is otiose because even under he main part of the provision he could file such an application for amendment. Therefore, the amendment of plaint would now be needed only to cover a case of permitting the plaintiff to rely on some ground which is not set out in the plaint or by way of evidence or other material before the court. We may, however, add that the wording used in the rule that the court 'may permit' the plaintiff to claim exemption indicates that the court has got a discretion either to permit or not to permit the plaintiff to claim exemption having regard to the facts and circumstances of each case and the plaintiff shall not be treated as having an absolute right to claim exemption on any material which is not pleaded in the plaint. 9. 9. The learned counsel for the second defendant contended that the suit was filed for a mortgage decree on the basis of the debt and that though he might to entitled to claim a money decree alone instead of a mortgage decree, it is not open to him to convert the suit into one as a suit on accounts and claim a decree for the balance of the amount due on such account. According to the learned counsel, the acknowledgment made by the first defendant on 24-9-1972 would amount to an acknowledgment of a settlement of accounts and that such an acknowledgment could not be relied on and any such reliance would be inconsistent with the pleading in the plaint. We are unable to agree with this contention of the learned counsel. What is sought to be relied on by the plaintiff is an acknowledgment of the debt of Rs. 38,000 as on 24-9-1972. It is true that ultimately the signature is made at the end of the pass book which evidences running account. However, that acknowledgment is referable to the total of the amount outstanding and not merely evidencing a course of dealings in money. So construed, on the basis of he proviso to R.6 of O.VII. the plaintiff will now be entitled to rely on such acknowledgment to save the suit from the bar of limitation though on the main part of R.6 he could not have relied on the acknowledgment. 10. We have permitted the plaintiff to raise this ground especially when the first defendant who is personally liable for the money had remained ex parte and had not questioned his liability. We have, also no reason to doubt the genuineness of Ex. A. 7 or the acknowledgment made by the first defendant on 24-9-1972. In fact Ex A.7 was produced by the plaintiff even in the claim petition in E. A. No. 541 of 1973 in O.S. No. 173 of 1971 and there can be no doubt that this was not created for the purpose of the suit subsequent to the filing of the suit and before the trial. This debt also finds a place in the account books of the plaintiff right froth the year 1967 to 1973. The plaintiff has produced Exs. This debt also finds a place in the account books of the plaintiff right froth the year 1967 to 1973. The plaintiff has produced Exs. A-3 to A-6 and Ex All and A12 All these account books have been produced before the Income-tax Officer in the respective accounting years and except Ex. A-3, for the year 1967-68 all the other account books bear the seal of the income-tax office. We have no reason to disbelieve Ex. A-3 also because the balance found in Ex. A-3 is the amount that was brought in as the opening balance in Ex. A-4 in the succeeding year and therefore the fact that the account book. Ex. A-3, does not bear the seal of the income-tax Office is of no consequence. Since the debt is genuine and it is not disputed by the first defendant and the genuineness of Ex. A-7 also could not be disputed, we are of the view that there was an acknowledgment of liability by the first defendant on 24-9-1972, which could save the suit from the bar of limitation. 11. The appeal is accordingly allowed. The decree and judgment of the court below dismissing the suit in its entirety is set aside. The suit is 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 is dismissed. 12. The learned counsel for the second and the third defendants contended that under Sec.73 of the Civil P. C. the plaintiff will not be entitled to a rateable distribution of the money now in court which was realised by the sale of the suit property on the ground that in terms of that section, the plaintiff will not be entitled to a rateable distribution but that is a matter to be decided as and when the plaintiff files an application under that provision and we cannot decide it at this stage when the plaintiff himself has not come forward with such a claim under Sec. 73 of the Civil P. C. 13. There will be no order as to costs in this appeal.