IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 01 5T DAY OF JULY, 2011 BEFORE THE HON’BLE MR. JUSTICE JAWAD RAHIM RSA No.2092 OF 2008 BETWEEN: SHRI KALINGAPPA SINCE DECEASED AND REPRESENTED BY LR’s 1. SHRI RAJAPPA, SON OF LATE KALINGAPPA, AGED ABOUT 50 YEARS, 2. SHRI MARISWAMY, Sb KALINGAPPA, AGED ABOUT 44 YEARS, 3. SHRI MADAPPA, Sb KALINGAPPA, AGED ABOUT 41 YEARS, ALL ThE APPELLANTS ARE RESIDING AT CHENNAPATNA VILLAGE, HULLAHALU HOBU, NANJANGUD TALUK - 571 301 MYSORE DISTRICT. APPELLANTS (BY SRI K.RAGHAVENDRA RAO, ADV., FOR M.P. ASSOCIATES AND GEETHA DEVI, ADV.,) AND: 1. SMT.GOWRAMMA, W/O MADAPPA, AGED ABOUT 59 YEARS 2. SHRI CHIKKANNAIAH, S/0 i RESPONDENT AGED ABOUT 34 YEARS 3. SHRI BANGARASHETTY S/O RANGASHETTY, AGED ABOUT 44 YEARS RESPONDENTS 1 TO 3 ARE RESIDING AT CHANNAPATNA VILLAGE, HULLAHALLI HOBLI, NANJANGUD TALUK - 571 301 MYSORE DISTRICT 4. SHRI N.S.SUNDARASHETTY, S/O SUBBASHETTY, AGED ABOUT 59 YEARS, RESIDING AT HURA VILLAGE, HULLAHALLI HOBLI, NANJANGUD TALUK - 571 301 MYSORE DISTRICT. RESPONDENTS (BY SRI T.N.RAGHUPATHY, ADV., FOR Ri AND R2) RSA FILED U/S. 100 OF CPC AGAINST THE JUDGEMENT & DECREE DATED:15.07.2008 PASSED IN R.A.NO 45/2004 ON THE FILE OF THE CIVIL JUDGE, (SR.DN), & JMFC, NANJANGUD, DISMISSING THE APPEAL AND CONFIRMING THE JUDGMENT AND DECREE DATED 18- 03-2004, PASSED IN OS 45/2002 ON THE FILE OF THE PRL. CIVIL JUDGE, (JR.DN), NANJANGUD. THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING: 3 JUDGMENT The legal heirs of the 1 defendant-Kalingappa are in second appeal against the judgment In R.A.45/04 on the file of Civil Judge (Senior Divn.), Nanjangud, confirming the judgment and decree In 0.S.45/02 on the file of Civil.Judge (Junior Dlvn.), Nanjangud, whereby the suit of respondents 1 and 2 has been decreed as prayed for. 2. Heard Sri Raghavendra Rao for the appellant and Sri T.N.Raghupathy for the respondents. Perused records in supplementation thereto. For brevity and easy reference, parties shall be referred to according to their rank in the trial court. In that, Kalingappa (father of the appellants herein) will be referred to as the 1 defendant; Gowramma and Chikkannalah shall be referred to as plaintiffs; Bangara Shetty and N.S.Sundara Shetty (respondents 3 and 4 in this appeal) will be referred to as defendants 2 and 3 respectively. 3. The contextual facts are: a) Gowramma1Yt plaIntiff along with her son Chikkannaiah (2” plaintiff) filed suit in 0.S.45/02 seeking a C’s 4 decree to redeem the mortgage dated 3.10.1980 In respect of the suit schedule property and for consequential reliefs. b) In support of the relief, they averred they are owners of the schedule property and had, for their legal necessities, mortgaged it in favour of the 2 nid defendant Bangara Shetty for Rs.3,000/- vide a deed of mortgage dated 3.10.1980 stipulatIng the period of mortgage as 5 years. It is averred, 2 d defendant-Bangara Shetty assigned the mortgage in favour of the 3’ defendant-Sundara Shetty vide a deed of mortgage dated 19.6.1982 and put him in possession. c) According to them, while the mortgage was still subsisting, Kallngappa-lY t defendant (father of the appellants) filed a suit in 0.5.48/83 seeking to enforce the agreement of sale dated 26.4.1982 and also for a direction to the plaintiffs to execute the deed of sale. It is averred the suit was decreed and to enforce the decree for specific performance, the 1 g defendant-Kalingappa had filed execution petition in E.P.64/86 on 20.6.1996, but as he did not pursue the same, it was dismissed as withdrawn on 28.6.1997. d) During the pendency of the execution proceedings, 1 st defendant-Kalingappa paid Rs.3,000/- being mortgage e amount to defendants 2 and 3, and obtained possession of the property and is continuing to be in possession. Thus they described him as the mortgagee in succession having obtained assignment of mortgage from the 3 rd defendant Sundara Shetty. e) It is also averred, the decree for specific performance obtained by Kalingappa in 0.5.48/83 had become inexecutable as Kalingappa on his own volition failed to execute the decree except obtaining physical possession of the property from Sundara Shetty (assignee mortgagee). Thus they described his possession as only that of a mortgagee by assignment from Sundara Shetty and not as a transferee under the agreement of sale dated 26.4.1982. On that basis they sought redemption of mortgage unaffected by the decree for specific performance of the agreement of sale passed in O.S.48/83. f) Despite service of notice of suit summons, 2 defendant-Bangara Shetty remained ex parte while the suit 6 against the 3 rd defendant-Sundara Shetty was dismissed for default. Kallngappa-lY t defendant was the only contesting defendant in the suit and he resisted the suit claim on the ground even though plaintiffs are owners of the schedule property, the mortgage transaction between them and Bangara Shetty as also Sundara Shetty was not subsisting in view of the judgment and decree in 0.5.48/83 in his favour. He claimed to be in physical possession of the schedule property in terms of the said decree and thus set up title in himself as the absolute owner thereof. He also claimed he had paid Rs.3,000/- being mortgage amount to the assignee mortgagee-Sundara Shetty in terms of the decree in 0.S 48/83 who received the said amount in discharge of the mortgage in his favour and in furtherance of that act, he also put him In physical possession and enjoyment of the same. He therefore described the suit filed by the plaintiffs as unsustainable in law as he was neither a mortgagee nor assignee of mortgagee. In short, his defense Is, there was no subsisting mortgage and therefore the suit for redemption was not maintainable. He also resisted the suit on the technical ground that it was barred by time. 7 g) Based on the material propositions in the pleadings, the earned trial judge framed the following issues for consideration: 1) Whether the plaintiffs prove that the right to redeem the mortgage dated 03-10-1980? 2) Whether the plaintiffs are entitled to redeem the mortgage of the suit schedule property? 3) Whether the plaintiffs are entitled for possession of the suit schedule property? 4) Whether the plaintiffs are entitled for mesne profits? If so, at what rate? 5) What order? In the enquiry that ensued, the plaintiff-Chikkannaiah tendered evidence as PVV1 and relied on the evidence of 2 witnesseS, viz., PW2-Kenchaiah and PW3-Jademallaiah, and placed reliance on 11 documents which include certified copy of the plaint, judgment and decree passed in O.S.48/83 marked as lExs.P1, P2 and P3 respectively, certified copy of the proceedings in Exn.P.64/86 marked as Ex.P4 to show execution proceedings were terminated at the instance of the i defendant-Kalingappa, thereby abandoning the proceedings, copy of the mortgage deeds 8 are marked as Exs.P5 and P6. The 1 defendant on this part tendered evidence as DWI. and placed reliance on 5 documents. h) Learned trial Judge analyzing the evidence, found though 1 defendant-Kalingappa had obtained a decree for specific performance in his favour against the plaintiffs in O.S.48/83, the decree was not executed within time and therefore the benefit of the Judgment and decree In O.S.48/83 was not available to him; it was also opined in view of the Judgment having not been executed or enforced by Kalingappa, physical possession which he had obtained from Sundara Shetty has to be deemed as possession of a mortgagee, and therefore the learned Judge heid 1 defendant-Kaiingappa has to be treated as a mortgagee-In- possession by virtue of the transaction between him and Sundara Shetty, and not as a transferee under the agreement of sale dated 26.4.1982. The suit was thus decreed directing the i’ defendant-Kalingappa to receive Rs.3,000/- and redeem the mortgage and to deliver physical possession of the property to the plaintiffs. 9 I) The 1 defendant-Kalingappa assailed the judgment in R.A..45/04 reiterating the same plea which found no favour with the appellate judge and the appeal was dismissed, confirming the judgment of the trial court. j) During the pendency of the appeal, Kalingappa died and his sons have pursued the legal action as his legal heirs. 4. The appeal has been admitted to consider the following substantial questions of law: 1) Whether the decree-Ex.D5 made in the previous suit in O.S.48/83 has extinguished the right of the plaintiffs in the present suit to redeem the mortgage dated 3.10. 1980? 2) Whether the two courts below have ignored the fact & the proviso 60 of the Transfer of Property Act, 1982? 5. I have heard at length Sri Raghavendra Rao, learned counsel for the appellants and Sri Raghupathy, learned counsel for the respondents and examined records in supplementation thereto. 6. Sri Raghavendra Rao would submit, respondents 1 and 2, viz., Gowramma and Chikkannaiah admittedly were owners of the property in question and had on their own volitIon transacted with the 1 g defendant-Kalingappa 10 (appellant herein) to sell the schedule property which is evidenced from the agreement of sale dated 26.4.1982. The terms of the agreement to sell they had received the sale consideration and had undertaken to transfer the property unto him absolutely, but failed. He therefore had filed a suit in O.S.48/83 in which a decree has been passed on merit, directing specific performance of the agreement of sale in favour of the 1 defendant-Kalingappa. That judgment and decree has reached finality as there is no appeal action by them and thus they are bound by it. He would submit, these facts are not in dispute and in fact respondents 1 and 2 in the suit filed by them in O.S.45/02 have categorically averred and referred to these facts. Therefore, the question before the trial court was, whether they had subsisting right, title and Interest to seek redemption of mortgage executed by them in favour of defendants 3 and 4-Bangara Shetty and Sundara Shetty. He would submit, even though the transaction of mortgage between the plaintiffs and Bangara Shetty and Sundara Shetty is admitted by the 1 defendant-Kalingappa, the mortgage stood discharged by virtue of the judgment and decree in O.S.48/83 wherein Kalingappa had not only nI. ,T’v .t 1) II brought the plaintiffs into the party array, but he had also impleaded the mortgagees-Bangara Shetty and Sundara Shetty and another woman named Giriyamma. He had In clear terms disclosed the transaction of mortgage in respect of the schedule property executed by the plaintiffs which charge was subsisting when he filed the suit for specific performance in O.S48/83. 7. In the suit, Gowramma and Chikkannaiah, Bangara Shetty and Sundara Shetty remained ex parte and did not contest. Consequently a clear decree was passed by the trial court in favour of the 1 defendant-Kalingappa dIrecting Gowramma and her son-Chikkannaiah (respondents in this appeal and defendants in that suit) to execute a deed of sale in respect of the schedule property after receiving Rs.1,000/- being balance sale consideration. A further direction was issued to defendants 3 to 5 to receive the mortgage amount and to discharge the mortgage and also to deliver possesslQn to the 1 defendant. Mesne profits was also ordered. According to him, not only Gowramma and her son-Chikkannaiah (defendants 1 and 2 in that suit), but the mortgagee 12 Bangara Shetty and the assignee-Sundara Shetty were directed to transfer unto the l defendant the schedule property absolutely after discharging the mortgage. 8. Mr.Raghavendra Rao would further submit that before the said decree, 1 defendant-Kalingappa had filed execution petition in E.P.64/86 in which proceeding the assignee mortgagee-Sundara Shetty received mortgage amount and delivered vacant possession of the schedule property to him consequent to which the execution petition was not pressed by him and was disposed of on 28.6.1991. 9. Having referred to these facts, Mr.Raghavendra Rao contends, Gowramma and Chikkannaiah (respondents 1 and 2) without disputing this fact situation and on the other hand, basing on such facts, filed suit in 0.5.45/02 seeking redemption of mortgage on the contention that the mortgage was subsisting and they had right to redeem it. Such relief, according to him, was not grantable as the mortgage had stood discharged in 0.S.48/83 and thus the suit should have been dismissed and the trial court has erred in decreeing the suit, and the first appellate court has 13 further erred in confirming the same. He thus seeks to set aside the judgments of both the courts below, 10. Learned counsel, Sri Raghupathy for respondents 1 and 2 would submit, as Kalingappa ( 1 t defendant) had admitted in unequivocal terms that respondents 1 and 2 were the absolute owners of the property in question and in exercise of that absolute right, they had executed the mortgage in favour of Bangara Shetty who in turn had assigned the mortgage to Sundara Shetty, any transaction thereafter was subject to those mortgages which is in the nature of charge. He submits, the period of redemption of mortgage being 30 years, plaintiffs were right in filing the suit for redemption and that relief was not affected by any judgment, much less in O.S.48/83. His contention is, the alleged agreement propounded by the defendant Kalingappa said to have been executed in his favour on 26.4.1982 was during the subsistence of mortgage and therefore even if we presume the transaction to be genuine, it was subject to mortgage. Respondents 1 and 2, therefore, had the right to seek redemption of mortgage and the trial court has rightly held in their favour. ‘4 11. In negation of Sri Raghavendra Rao’s contention that by judgment in O.S.48/83, the mortgage had, stood discharged and the l defendant’s possession was not as a transferee mortgagee but a transferee under the’agreement of sale and therefore the Impugned judgment in O.S.45/02 directing the respondents 1 and 2 to receive the mortgage money and discharge the mortgage was unsustainable, Sri Raghupathy submits the mortgage can be discharged only in the manner prescribed by the provisions of Section 60 of the Transfer of Property Act, 1882, and not in any other manner. He relies on Section 60 to drive home this point and it has received my serious consideration. 12. The next ground urged by him Is, even presuming that the decree In O.S.48/83 had the effect of diminishing the charge created by the mortgage transaction, he submits the judgment and decree in O.S.48/83 had become extinguished by afflux of time being barred by limitation, as the 1 defendant-Kalingappa had not enforced the judgment and decree in 0.S.48/83 (Ex.D5) within the statutory period of limitation. Therefore, he had lost the benefit, if any, resulting from the said decree and his ‘-n i) I5 possession was only that of a transferee mortgagee since he has obtained physical possession from Sundara Shetty assignee mortgagee after paying him Rs.3,000/-. 13. The third lap of his argument is, mortgage can be transferred by assignment for which the acts done by the parties become important, whereas for discharge of mortgage it has to be only in the manner prescribed In Section 60 of the T.P. Act. On the grounds urged, he submits the right, title and interest of respondents 1 and 2 (plaintiffs) was not affected by the judgment and decree In 0.5.48/83 and hence they were justified in seeking the relief of redemption of mortgage. 14. Learned counsel seeks citational support to this contentions relying on the following decisions: 1) NARANDAS KARSONDAS .vs. S.A.KAMTAM & ANOTHER [(1997) 3 SCC 247]; 2) PARICHHAN MISTRY (DEAD) BY L.Rs. & ANOTHER .vs. ACCHIBAR MISTRY & OTHERS (AIR 1997 SC 456); and 3) ODAPPAYEE AMMAL & OTHERS .vs. RAMANATHAN & ANOTHER (AIR 1997 MADRAS 74). to 15. In the first decision in the case of NARANDAS KARSONDAS, the apex court with reference to Sections 59(c), 60 and 69 of the T.P. Act, held thus: “The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by the act of parties. In India it is only on execution of the conveyance and registration of transfer of the mortgagor’s interest •by registered instrument that the mortgagor’s right of redemption will be extinguished. The conferment of power to sell without intervention of the court in a mortgage deed by itself will not deprive the mortgagor of his right to redemption. The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale.” 15. In the second decision in the case of PARICHHAN MISTRY, dealing with a case of usufructuary mortgage of agricultural land, the apex court held that ‘the decree obtained for sale of the property on the ground of arrears of rent, mortgagee cannot escape from his obligation of redeeming the mortgage despite any such decree. Even if the property is sold in auction in enforcement of the decree, the right of the mortgagor to redeem the mortgage is saved.’ 16. In the third decision in the case of ODAPPAYEE AMMAL (AIR 1999 MADRAS 74), the single Bench of the 17 Madras High Court held that the ‘death of mortgagor during the subsistence of mortgage does not ext/nguish the right of redemption which survives on the heirs of the mortgagor and they are entitled to redeem the mortgage. / 17. The contentions of both sides have received my consideration. 18. I have already referred to in paragraphssupra that there is no dispute between the parties that plaintiffs Gowramma and Chikkannaiah were the owners of the property in question. It is also not in dispute that they had by virtue of the mortgage transaction on 3.10.1980 mortgaged the property in favour of Bangara Shetty for Rs.3,000/- stipulating the period of mortgage as 5 years. It is also not disputed that he was put in possession and while being mortgagee in possession, he assigned the mortgage in favour of Sundra Shetty vide deed of mortgage dated 19.6.1982 has delivered physical possession unto him. It is also not in dispute that on 26.4.1982, much before assignment of mortgage in favour of Sundara Shetty, plaintiffs executed the agreement of sale in favour of KaIingappa1s t defendant after receiving part payment of 18 sale consideration. It is also not in dIspute that he had filed O.S.48/83 seeking to enforce the agreement of sale which was decreed on 3.8.1984 direEting respondents 1 and 2 herein to receive the balance sale consideration of Rs.1,000/- and to execute the sale deed in terms of the agreement of sale and also directing the mortgagee and assignee mortgagee, viz., Bangara Shetty and Sundara Shetty including another woman, Giriyamma to discharge the mortgage after receiving Rs.3,000/-. 19. It is evident also from the records that the 1 defendant-Kalingappa had enforced the decree in E.P.64/86 and in those proceedings, Sundara Shetty, the assignee mortgagee who was in physical possession of the property, received Rs.3,000/- mortgage amount and delivered possession of the property to him (Kallngappa) in fulfillment of the directions contained in the decree. That judgment and decree has reached finality as there was no appeal action by defendants 1 and 2 (Gowramma and Chikkannaiah). It is also evident from the records that 1 defendant-Kalingappa having obtained physical possession of the property from the assignee mortgagee-Sundara 19 Shetty, continues to be in physical possession and he was In fact in physical possession In the year 2002 when respondents 1 and 2 filed 0.5.45/02 (impugned in this appeal). 20. From 1986 till 2002, the 1 defendant-Kalingappa claims to be in continuous uninterrupted possession in terms of the decree in 0.5.48/83 which fact is not in dispute. In fact respondents 1 and 2 (plaIntiffs in 0.5.45/02) have tategorically averred these facts in the plaint itself. Thus it was incumbent on the trial court to decide the nature of right of the 1 defendant-Kalingappa and as to whether the suit for possession was maintainable. 21. It is settled principle of law that intelligent drafting of plaint does not save the suit If on facts It is seen that the averments in the plaint are a disguise to overcome either limitation or to defeat the subsisting right of the adversary. The trial court has treated Kalingappa as the assignee mortgagee and accepting the contentions of the plaintiffs that he has come in possession as assignee of mortgage and is liable to redeem the mortgage if it is sought within 30 years, has computed 30 years from the I). 20 year 1980 to hold that the suit filed In the year 2002 was within the period of limitation. 22. The moot question as seen from the questions of law framed in this appeal is, whether the mortgage transaction was subsisting as on the day respondents 1 and 2 flIed O.S.45/02 and whether they had the right to seek redemption of mortgage. Learned counsel, Sri Raghupathy’s contention is, a mortgage can be discharge only in terms of Section 60 of the T.P. Act and in this case, the same has not been discharged In the manner provided therein, and therefore the right of the plaintiffs to seek redemption was saved. 23. Necessarily a conspectus of Sections 58(a) and 60 of the T.P. Act is necessary. Section 58(a) refers to the definition of ‘mortgage,’ ‘mortgagor,’ ‘mortgagee’ and ‘mortgage-money.’ It envisages that the term ‘mortgagor’ and ‘mortgagee’ shall be deemed to include references to persons deriving title from them respectively. Section 60 envisages ‘At any time after the principal money has become(due), the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, I. 21 to require the mortgagee (a) to deliver (to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee). (b) where the mortgagee is in possession of mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgagor property to him or to such third person as he may direct, or to execute and(where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transfer to the mortgagee has been extinguished. The proviso to Section 60 of the T.P. Act reads thus: ‘Provided that the right conferred by this section has not been extinguished by the act of the parties or by the decree of a court. The right conferred by the section is called a right to redeem and a suit to enforce it is called a suit for redemption. Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.’ 22 24. The contention of Sri Raghupathy is, unless mortgagees endorse on the instrument discharging the mortgage, It shall subsist. He would submit, in the instant case mortgagees, viz., Bangara Shetty and Sundara Shetty had not endorsed acknowledgement of receipt of payment and therefore the mortgage is subsisting and the respondents have the right to seek redemption. 25. I have referred to undisputed facts In this case. If we accept the case of the 1 5t defendant-Kalingappa that he Is the transferee of the property in question by virtue of the decree for specific performance of the agreement of sale dated 26.4.1982, then he would be the transferee/purchaser of the property and his possession has to be construed as possession in part performance of the contract, as enumerated in Section 53A, T.P. Act. If we go by the contention of the plaintiffs also that the 1 defendant-Kalingappa having paid mortgage amount to the assignee mortgagee-Sundara Shetty, he has stepped into the shoes of the mortgagee, by virtue of Section 59A of the same Act, he becomes mortgagee-in-possession. 23 26. Even if we accept this