R.S.A.No.3659 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No.3659 of 2008 Date of Decision : 5.5.2009 Rishal and another ....Appellants Versus Biro and others ...Respondents CORAM : HON'BLE MR.JUSTICE MAHESH GROVER .... Present : Mr.Hari Om Attri, Advocate for the appellants. ... MAHESH GROVER, J. This is plaintiffs' second appeal filed against the judgments of the learned trial Court dated 24.8.2004 and that of the first appellate Court dated 1.4.2008 A suit was initiated by the appellants pleading that the respondents have mortgaged the suit land with their predecessor-in- interest more than 100 years ago which has not been redeemed and consequently the predecessor-in-interest of the appellants remained in possession of the suit property as mortgagees and they have now become owners of the same as the land has not been redeemed so far. It is pleaded that the rights of the defendants/appellants have been extinguished and they had purchased the mortgage rights from Kishan vide sale deed dated 5.9.1967. The respondents contested the suit and admitted that the R.S.A.No.3659 of 2008 -2- mortgage had been created by their predecessor-in-interest in favour of predecessor-in-interest of the appellants. However, it is denied that the appellants have converted the same into ownership. They pleaded that the land has been acquired by the State Government and the appellants are not in possession of the same. The parties went to trial on the following issues :- 1. Whether the plaintiffs have become owners of the suit property in equal shares and the right of redemption of the defendants have extinguished by passage of time?OPP 2. Whether the plaintiffs have no locus standi to file the present suit?OPD 3. Whether the plaintiffs have no cause of action to file the suit?OPD 4. Whether the plaintiffs are estopped by their own act and conduct from filing the suit?OPD 5. Whether the suit is bad for mis-joinder and non- joinder of necessary parties?OPP 6. Whether deficient court fee has been affixed on the plaint?OPD 7. Relief. Both the Courts below dismissed the suit of the plaintiffs/appellants by holding that the mortgage in question was a usufructuary mortgage as no time limit was prescribed for its redemption. In the regular second appeal, learned counsel for the R.S.A.No.3659 of 2008 -3- appellants has contended that the findings recorded by the Courts below are erroneous and deserve to be set aside. It was pleaded that since the mortgage was more than 100 years old and the plaintiffs were in possession, they have become owners in possession of the suit land. It was contended that the following question of law arises for the consideration of this Court :- a) Whether the appellants-plaintiffs had become the owner of the property in dispute by virtue of the sale deed Ex.P-2 ? b) Whether the suit property was under usufructuary mortgage and the appellants-plaintiffs had become the owners of the same as the defendants have failed to redeem it for more than 100 years? After hearing the learned counsel for the appellants and perusing the impugned judgments, I am of the considered opinion that the contentions raised by the learned counsel for the appellants have conclusively been answered by the Full Bench of this Court in Ram Kishan and others v. Sheo Ram and others 2008(1) P.L.R. 1 wherein it was observed as under :- “31. After considering the aforesaid judgments, we respectfully agree that the view of the Full Bench of this Court in Lachhman Singh's case (supra) and that of Patna High Court in Jadubans Sahai's case (supra). The provisions of Section 60, 62 and 67 of the Transfer of Property Act are not applicable within the jurisdiction of this Court. Therefore, these provisions are required to be R.S.A.No.3659 of 2008 -4- interpreted keeping in view the principles of equity and good conscious. Since the mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given, the security must, therefore, be redeemable, on the payment or discharge of such debt or obligation. That is the view of the Hon'ble Supreme Court in Pomal Kanji Govindji's case (supra) wherein it has also been held that poverty should not be unduly permitted to curtail one's right to borrow money. Since at one point of time the mortgagor for one or the other reason mortgaged his property to avail financial assistance on account of necessities of life, the mortgagor's right cannot be permitted to be defeated only on account of passage of time. The interpretation sought to be raised by the mortgagees is to defeat the right of mortgagor and is wholly inequitable and unjust. The mortgagee remains in possession of the mortgaged property; enjoys the usufruct thereof and, therefore, not to lose anything by returning the security on receipt of mortgage debt. Section 60 of the Act is general in nature applicable to all kinds of mortgagees including usufructuary mortgage which is evident from clause (b) of Section 60 of the Act, where the mortgagee in possession of the mortgaged property is required to deliver possession R.S.A.No.3659 of 2008 -5- to the mortgagor. But Section 62 of the Act is a special provision dealing only with the rights of usufructuary mortgagor. In terms of clause (a) of Section 62 of the Act, the suit is for possession after the mortgage comes to an end by self redeeming process as the mortgagee is authorised to pay himself the mortgage money from the rents and profits of the property. The mortgagee has to look to the rents and profits only to repay himself and when his entire charge is so liquidated he must re-deliver possession of the mortgaged property to the mortgagor. However, in terms of clause (b) of Section 62 of the Act, the right of the mortgagor will arise only after rents and profits derived by the mortgagee out of the usufruct of the mortgaged property are adjusted towards the interest or the principal and on mortgagor paying the balance in the manner prescribed. In such mortgages, rents and profits are to be set off against interest and the mortgagee is entitled to retain possession until such time as the mortgagor chooses to redeem on payment of the principal sum secured. Such right for possession will accrue after the mortgage money is paid off. 32. The limitation of 30 years under Article 61(a) begins to run "when the right to redeem or the possession accrues". The right to redemption or recover possession accrues to the mortgagor on payment of sum secured in case of usufructuary mortgage, where rents and profits are R.S.A.No.3659 of 2008 -6- to be set off against interest on the mortgage debt, on payment or tender to the mortgagee, the mortgage money or balance thereof or deposit in the court. The right to seek foreclosure is co-extensive with the right to seek redemption. Since right to seek redemption accrue only on payment of the mortgage money or the balance thereof after adjustment of rents and profits from the interest thereof, therefore, right of foreclosure will not accrue to the mortgagee till such time the mortgagee remains in possession of the mortgaged security and is appropriating usufruct of the mortgaged land towards the interest on the mortgaged debt. Thus, the period of redemption or possession would not start till such time usufruct of the land and the profits are being adjusted towards interest on the mortgage amount. In view of the said interpretation, the principle that once a mortgage, always a mortgage and, therefore, always redeemable would be applicable. 33. The argument that after the expiry of period of limitation to sue for foreclosure, the mortgagees have a right to seek declaration in respect of their title over the suit property is not correct. From the aforesaid discussion, it is apparent that the mortgage cannot be extinguished by any unilateral act of the mortgagee. Since the mortgage cannot be unilaterally terminated, therefore, the declaration claimed is nothing but a suit for foreclosure. It is equally well settled that it is not title of the suit, which determines R.S.A.No.3659 of 2008 -7- the nature of the suit. The nature of the suit is required to be determined by reading all the averments in the plaint. Such declaration cannot be claimed by an usufructuary mortgagee. Thus, we prefer to follow the dictum of law laid down by the larger Bench in Seth Ganga Dhar's case (supra) as well as judgments of Hon'ble Supreme Court in Jayasingh Dnyanu Mhoprekar's case(supra), Pomal Kanji Govindji's case (supra), Panchanan Sharma's case (supra) and Harbans's case (supra), in preference to the judgments relied upon by the mortgagees in Prabhakaran's case (supra) and Sampuran Singh's case (supra). 34. Therefore, we answer the questions framed to hold that in case of usufructuary mortgage, where no time limit is fixed to seek redemption, the right to seek redemption would not arise on the date of mortgage but will arise on the date when the mortgagor pays or tenders to the mortgagee or deposits in Court, the mortgage money or the balance thereof. Thus, it is held that once a mortgage always a mortgage and is always redeemable.” Having regard to the aforesaid and the fact that the questions of law raised by the learned counsel for the appellants have been settled by the observations of the Full Bench, I am thus of the opinion that there is no merit in the present appeal. Once a mortgage, always a mortgage. Therefore, the sale deed dated 5.9.1967 would have no bearing on the status of the mortgagor and the mortgagee and since no time is prescribed for redeeming an usufructuary mortgage, R.S.A.No.3659 of 2008 -8- both the questions of law are answered as above. Dismissed. 5.5.2009 (MAHESH GROVER) JUDGE dss