IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA R.S.A.No. 480 of 1998. Judgment reserved on : 15.5.2009 Date of decision : June 3, 2009. Karam Chand & Others. …Appellants. Versus Balwant Rai & Others. … Respondents. Coram The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting ?1 Yes For the Appellants : Mr. N.K.Thakur , Advocate. For the Respondents : Mr. Ajay Sharma, Advocate. Kuldip Singh, Judge This appeal has been directed against the judgment, decree dated 11.9.1998 passed by Additional District Judge, Una in Civil Appeal No. 23/91, 47/91 RBT. No.198/94 allowing the appeal by setting aside the judgment, decree dated 1.2.1991 passed by Sub Judge 1st Class (I), Una in Case No. 59 of 1985. 2. The facts, in brief, are that one Jagdish Ram predecessor of respondents 1(a) to 1(j) had filed a suit against appellants, Kishan Chand predecessor of respondents No.2 to 6 and respondents No.7 to 14 for declaration that he has become owner of land measuring 11 kanals 1 marla situated at village Samoor Khurd, Tappa Momaniar, Tehsil Bangana, District Una as 1 Whether reporters of Local Papers may be allowed to see the Judgment ?Yes 2 per jamabandi 1982-83 more specifically detailed in the plaint by lapse of time, extinguishment and foreclosure of right of equity of redemption, appellants, Kishan Chand and respondents No.7 to 14 have no right and interest in the suit land. The consequential relief of permanent injunction was also prayed. 3. The further pleaded case is that Pala and Ram Saran owners of the suit land had mortgaged their rights in the land owned and possessed by them with Ralloo, Wazira and Govind prior to the year 1920. The mortgagees had sold their mortgagees rights in favour of Pohlo S/o Gori, Thakur, Kishnoo in the year 1925 and mutation No. 143 dated 8.6.1925 was sanctioned. Pohlo etc. vendees of mortgagees rights sold their mortgagees rights in favour of Pohlo Ram S/o Hamira, Basanta Ram, Batna and delivered possession to them and mutation No.360 dated 30.4.1956 was attested in their favour. Jagdish Ram predecessor of respondents 1(a) to 1(j) had purchased the share of Thakur Dass and Kishnoo in the khata through registered sale deeds. Jagdish Ram became co-sharer of the suit land in the khata. 4. Pala original mortgagor died and Ralli his widow succeeded to his estate as mortgagor. Rali sold her right of equity of redemption in the land to appellants No.1 to 4, late Kishan Chand and respondents 7 to 11 through different transactions, thus appellants, late Kishan Chand and respondents No.7 to 14 became mortgagors. Basanta Ram, Pohlo Ram and Batna vendees of the mortgagees rights sold their rights in favour of Jagdish Ram orally and delivered possession on 18.7.1961 and mutation No.391 was sanctioned in his favour and he became mortgagee in possession 3 of the suit land. The suit land mentioned in sub paras (i), (ii) of the plaint was jointly recorded in favour of appellants, late Kishan Chand and respondents No.7 to 14 as mortgagors as per their shares, land referred in sub para No. (iii) of the plaint was recorded in the name of appellants as mortgagors and land mentioned in sub para (iv) was recorded in the name of late Kishan Chand and respondents No.7 to 14 as mortgagors due to some arrangement and private partition. Jagdish Ram recorded as mortgagee with possession. 5. It was further pleaded that original mortgage took place in the year 1920 and the same was not redeemed by appellants, late Kishan Chand and respondents No.7 to 14 and they have lost their right by efflux of time, extinguishment and foreclosure of right of equity of redemption. Jagdish Ram had become its owner. The appellants, late Kishan Chand and respondents No.7 to 14 had threatened to redeem the land and, therefore, the suit was filed. 6. The appellants contested the suit. It was denied that mortgage was created in favour of Jagdish Ram in the year 1961. It was denied that Jagdish Ram had purchased the rights of mortgagees. They asserted their possession on the suit land. It was pleaded that even if mortgage as alleged is proved and Jagdish Ram had acquired mortgagees rights by purchase in that case also Jagdish Ram was not entitled for the relief of declaration as the mortgage was acknowledged by Jagdish Ram and his predecessor on various dates. Kishan Chand predecessor of respondents No. 2 to 6 and respondents 7 to 14 admitted the claim of Jagdish Ram. On the pleadings of the parties, the following issues were framed:- 4 1. Whether the plaintiff has become owner by lapse of time and extinguishment of the mortgage as alleged? OPP. 2. Whether the plaintiff or his predecessor has acknowledged the mortgage as alleged? OPD. 3. Relief. The issue No.2 was not pressed, issue No.1 was answered in negative and suit was dismissed by the trial Court on 1.2.1991. In appeal, the Additional District Judge set-aside the judgment, decree dated 1.2.1991 of trial Court and decreed the suit of Jagdish Ram predecessor of respondents 1(a) to 1(j) by holding that Jagdish Ram had become owner by efflux of time of the suit land more specifically detailed in the impugned judgment. A decree of permanent prohibitory injunction was also passed in favour of Jagdish Ram, hence present appeal which has been admitted on the following substantial questions of law :- 1. Whether the suit as framed is maintainable in view of the judgment reported in AIR 1995 SC 1743? 2. Whether the facts proved and established would loose its value on oral saying, contrary by the party? 3. Whether the recital in the sale deed Ext.DW-2/A is binding on the plaintiff so far as it relates to the payment of mortgage money adjusted in the sale consideration? 4. Whether the payment of mortgage money amounts to redemption of the land in reference? 5. What is the effect of mis-construction and mis-interpretation of the revenue record? 5 6. Whether the plaintiff has been able to rebut the presumption of correctness attached to the revenue record? 7. Heard and perused the record. The learned counsel for the appellants has submitted that the learned lower Appellate court has not properly appreciated the nature of the suit. According to the respondents 1(a) to 1(j) they are in possession of the suit land through their predecessor Jagdish Ram and they have become owners on the ground of foreclosure as limitation for redemption of the land had expired. The learned counsel for appellants has submitted that neither respondents 1(a) to 1(j) nor Jagdish Ram their predecessor had become owner by efflux of time. Mr. Ajay Sharma, learned counsel for the respondents has supported the impugned judgment, decree. 8. The substantial questions of law No.1 to 6 are to be seen in the light of issue involved in the suit. The precise case of the respondents 1(a) to 1(j) is that they have become owners by lapse of time and extinguishment of mortgage. In para 10 of the plaint, it has been pleaded as follows:- “That original mortgage took place before 1920 and the same has not been redeemed uptill now by the defendant. The defendants right to redeem the mortgage has been lost by afflux of time and extinguishment and foreclosure of right of equity of redemption and they have ceased to have any right and interest in the suit land and the plaintiff has become owner in possession of the suit land by extinguishment and foreclosure of right of equity of redemption and lapse of time.” In view of the pleaded case of the respondents 1(a) to 1(j) the controversy in the present case is whether respondents 1(a) to 1(j) 6 have become owner of the suit land by efflux of time. In Harbans Vs. Om Parkash, 1998 (2) PLR, 172 it was held as follows :- “ 1 to 3. xx xx xx 4. After hearing the counsel and going through the record, I am of the view that the judgment cited by the counsel for plaintiff in Ram Rakha’s case (supra); the point in issue was not considered. In this case, it is the admitted case of the parties that mortgagee is in possession of the property in dispute and no evidence has been brought on record by the mortgagee to show that mortgage was for a fixed period. Since no time was prescribed for redeeming the land, the mortgagor has the right to get the property redeemed, there being no limitation for redeeming the said mortgage. In this regard, reference be made to judgment in Panchanan Sharma v. Basudeo Prasad Jaganani and others, 1995 HRR 575. Consequently, this appeal being without any merit shall stand dismissed”. 9. In Ram Kishan & Ors. Vs. Sheo Ram & Ors. AIR 2008 Punjab and Haryana 77, the Full Bench in para 43 has held as follows :- “------- 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 Pormal 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 the mortgagor and is wholly inequitable and unjust. The mortgagee remains in possession of the mortgaged property ; enjoys the usufruct thereof and, 7 therefore, not to lose anything by returning the security on receipt of mortgage debt. The Full Bench in para 46 of the report has also held as follows:- “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 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.” 10. The Supreme Court in Panchanan Sharma Vs. Basudeo Prasad Jaganani and others, AIR 1995 SC 1743 in para 2 has held as follows:- “--------- Under Section 58 (d) of the Transfer of Property Act, (for short, ‘the Act’) where the mortgagor delivers possession to the usufructuary mortgagee, the latter is authorized to retain possession of such property until the payment of mortgage money made and to receive the rent and profits accruing from the property or in part of such rents and profits and to appropriate the same in lieu of interest or partly in lieu of payment of the mortgaged money subject to the terms and conditions mentioned in the mortgage deed. Section 76 of the Act enjoins the usufructuary mortgagee, during the continuance of the mortgage to remain in possession of the mortgaged property subject to his managing the same as a person of ordinary prudence would, as if it were of his own, subject to the conditions envisaged therein --------.” In para 3 of the report the Supreme Court has held as follows:- 8 “ -------If the deed gives time for redemption or adjustment of the rent or profits and liabilities in terms of the contract read with the relevant provisions of the Act stood discharged, the limitation for redemption would run from the date fixed in the mortgage deed. Otherwise, there is no limitation for redemption of usufructuary mortgage. The usufructuary mortgagor does not lose his title to the property or right to redemption by lapse of time-------.” 11. The Supreme Court in Hamzabi and others Vs. Syed Karimuddin and others, (2001) 1 SCC 414 has held as follows:- “ 2. The right of the mortgagor to redeem had its origin as an equitable principle for giving relief against forfeiture even after the mortgagor defaulted in making payment under the mortgage deed. It is a right which has been jealously guarded over the years by courts. The maxim of “once a mortgage always a mortgage” and the avoidance of provisions obstructing redemption as “clogs on redemption” are expressions of this judicial protection. (See: Pomal Kanji Govindji Vs. Vrajlal Karsandas Purohit (1989) 1 SCC 458 in this context.) As far as this country is concerned, the right is statutorily recognized in Section 60 of the Transfer of Property Act. The section gives the mortgagor right to redeem the property at any time after the principal money has become due by tendering the mortgage money and claiming possession of the mortgaged property from the mortgagee. The only limit to this right is contained in the proviso to the section which reads: “Provided that the right conferred by this section has not been extinguished by act of the parties or by decree of a court.” 3. While the expression “decree of court” is explicit enough, the phrase “act of parties” has given rise to controversy. One such act may be when the mortgagor sells the equity of redemption to the mortgagee. This Court in Narandas Karsondas Vs. S.A. Kamtam (1977) 3 SCC 247 has said that : (SCC p.254, para 34) “In India it is only on execution of the conveyance and registration of transfer of the mortgagor’s interest by 9 registered instrument that the mortgagor’s right of redemption will be extinguished.” 12. In Harbans Vs. Om Prakash & Ors. AIR 2006 SC 686, the facts were that a suit was instituted by the appellant against the defendants in that case seeking decree of declaration to the effect that the plaintiff had become the owner in possession to the extent of ½ share and defendants 2 and 3 have become owners in possession of the balance suit property, on the ground of foreclosure since limitation for redemption of the land had expired. The specific stand of the plaintiff was that forefathers of the plaintiff along with forefathers of Prem and Lakhpat sons of Banswari took the land in suit as mortgagees from the ancestors of Bhira about more than 100 years ago, and since then they have continued to be in possession of the suit land as mortgagees. Therefore, the plaintiff and defendants No.2 and 3 are in cultivating possession of the suit land since Smt. Patori daughter of Nanha has not been seen and heard by the plaintiff since he attained majority. The suit land has not been redeemed yet and period of limitation of sixty years had already expired. Therefore, the plaintiff and defendants No. 2 and 3 have become owners in possession of the suit land. The trial Court held that suit was to succeed and, therefore, decreed the same in favour of the plaintiff and defendants No. 2 and 3. It held them to be owner in possession of the suit land. The first appeal was allowed and it was held that plaintiff and defendants No. 2 and 3 have not become owners as there was no period of limitation to redeem the usufructuary mortgage. The second appeal filed by the 10 plaintiff was dismissed by the learned Single Judge holding that there was no evidence brought on record to show that the mortgage was for a fixed period. Since no time was fixed for redeeming the land the mortgagor has right to get the property redeemed, there being no limitation for the mortgagor. The Supreme Court noticed Mulla’s The Transfer of Property Act, Ninth Edition :- “The Supreme Court has held that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of the right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee in possession of the property will have to deliver possession to the mortgagor when a suit of redemption is filed unless he is able to show that the right of redemption has come to an end or that a suit is liable to be dismissed on some other valid ground. The mortgagor’s right of redemption is exercised by the payment or tender to the mortgagee at the proper time and the proper place, of the mortgage money. When it is extinguished by the act of parties, the act must take the shape and observe the formalities which the law prescribes. The expression ‘act of the parties’ refers to some transaction subsequent to the mortgage and standing apart from the mortgage transaction. A usufructuary mortgagee cannot by mere assertion of his own or by a unilateral action on his part, convert his position on moiety of the property as mortgagee into that of an absolute owner.” The Supreme Court ultimately dismissed the appeal of the plaintiff. 13. The present suit was filed by Jagdish Ram predecessor of respondents 1(a) to 1(j) on the ground that the mortgage was not redeemed within the period of limitation, the mortgagors have lost their right to redeem and he had become owner of the suit land by efflux of time and foreclosure. PW-3 Jagdish Ram has stated that 11 land in dispute was mortgaged with him with possession, it was never redeemed and he had become owner of the disputed land. There is nothing on record to show that any time was fixed for redemption of the mortgage or liabilities stood discharged. The facts of the case projected by Jagdish Ram predecessor of respondents No. 1(a) to 1(j) are very close to the facts in Harbans Vs. Om Prakash & Ors. AIR 2006 SC 686, where Supreme Court has not accepted the contention of the appellant that he and defendants No.2 and 3 have become owners in possession of balance suit property on the ground of foreclosure since limitation for redemption of the land had expired. 14. The learned counsel for the respondents has submitted that the mortgage was not usufructuary mortgage. The usufructuary mortgage has been defined in Section 58 (d) of the Transfer of Property Act, 1882. The plaint and the statement of PW-3 Jagdish Ram predecessor of respondents No.1 (a) to 1(j) clearly indicate that the mortgage in question was nothing but usufructuary mortgage inasmuch as Jagdish Ram had claimed that he was in possession of the suit land under the mortgage. It is reasonable to infer that Jagdish Ram during his life time and thereafter respondents 1(a) to 1(j) utilized the usufruct of the mortgage land for their benefit. There is no limitation for redemption of usufructuary mortgage. The Additional District Judge has not properly appreciated the nature of the suit and has erred in decreeing the suit on the ground that Jagdish Ram had become owner of the suit land after efflux of time. He has ignored the principle ‘once a mortgage always a mortgage’. 12 15. The Additional District Judge has recorded a finding of fact that there is no clear cut evidence / recital in the sale deed Ex.DW-2/A that mortgage money was paid to the mortgagee and whole of the mortgage stood redeemed. The Additional District Judge has further held that mortgagor had not been paid mortgage amount. This being the position, the mortgage was not redeemed but it does not in any way come to the rescue of respondents No.1 (a) to 1(j) for decreeing the suit in their favour on the ground of efflux of time. There is no limitation for redeeming usufructuary mortgage. The impugned judgment and decree are not sustainable and are liable to be set-aside. The substantial questions of law No.1 to 6 are accordingly decided in favour of the appellants. 16. No other point was urged. 17. The result of the above discussion, the appeal is allowed. The judgment, decree dated 11.9.1998 passed by the Additional District Judge, Una in Civil Appeal No. 23/91, 47/91 RBT No. 198/94 are set-aside and the suit dismissed with no order as to costs. ( Kuldip Singh ), June 3, 2009, Judge. (GR)