R.S.A.No.3398 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No.3398 of 2008 Date of Decision : 11.5.2009 Mohammadin and others ....Appellants Versus Safeda and others ...Respondents CORAM : HON'BLE MR.JUSTICE MAHESH GROVER .... Present : Mr.Sudhir Aggarwal, Advocate for the appellants. ... MAHESH GROVER, J. This is plaintiffs' appeal directed against the judgment of the first appellate Court dated 4.6.2008. The plaintiffs/appellants filed a suit for declaration with consequential relief of permanent injunction to the effect that they have become owners in possession of 5/6 share of the land measuring 11 kanals 14 marlas described in the plaint as a result of expiry of period for redemption of mortgage and further that they were already owners in possession of 1/6 share and, therefore, in this manner they have now become owners of the entire suit property. It was further prayed that the respondents are bent upon to interfere in their R.S.A.No.3398 of 2008 -2- possession and injunction be granted to them to that extent. The respondents, who were arrayed as defendants, contested the suit and pleaded that their predecessors-in-interest were recorded in possession of the suit property and after them they have been recorded as such. It was pleaded that the plaintiffs/appellants are mortgagees with possession to the extent of 5/6 share and that of 1/6 remaining share as co-sharer and there is pucca boundary wall and a room constructed by them for the last about 25/26 years. It was pleaded that the entries regarding possession in favour of the appellants are not correct. The parties went to trial on the following issues :- 1. Whether plaintiffs themselves and through their ancestors had been coming in possession of 5/6th share in the land mentioned in para No.1 of the plaint as mortgagees for the last more than 30 years?OPP 2. Whether plaintiffs themselves and through their ancestors had been coming in possession of 1/6th share in the land mentioned in the plaint as co-sharers?OPP 3. Whether plaintiffs have become owners in possession by way of principle of foreclosure to the extent of 5/6th share in the suit land?OPP 4. Whether plaintiffs are also owners in possession of 1/6th share in the land mentioned in plaint?OPP 5. Whether plaintiffs have suppressed material facts from the courts?OPD 6. Whether suit is barred under Section 11 CPC and U/O R.S.A.No.3398 of 2008 -3- 2 Rule 2 CPC?OPD 7. Whether plaintiffs are estopped to seek the relief due to their past act and conduct?OPD 8. Whether present suit is not maintainable in the present form?OPD 9. Relief. The learned trial Court decreed the suit of the plaintiffs/appellants while in appeal preferred by the respondents/defendants the findings were upset, which has resulted in the present regular second appeal. While reversing the findings of the learned trial Court the learned first appellate Court held that according to the case of the plaintiffs/appellants the land was under mortgage with possession with them and no time limit was prescribed for redemption of such mortgage (usufructuary mortgage) and by placing reliance on a Full Bench judgment of this Court reported as Ram Kishan and others v. Sheo Ram and others 2008(1) P.L.R. 1 accepted the plea of the respondents. It has been contended by the learned counsel for the appellants that the findings recorded by the first appellate Court are erroneous as the mortgage had not been redeemed within a period of 30 years of its creation and therefore they have become owners in possession of the suit property. I have heard the learned counsel for the appellants and have perused the impugned judgments. Undeniably the land was under mortgage with the appellants. The revenue entries which have been placed on record as R.S.A.No.3398 of 2008 -4- Exs.P1 to P9 show that the appellants and their predecessors-in- interest were recorded as mortgagees ever since 1962-63. If that be so, then, the only prayer that has been made by the learned counsel for the appellants is that they should be declared owners for the reason that the land has not been redeemed. There is no dispute that the mortgage was usufructuary in nature. I am afraid the contention of the learned counsel for the appellants is unacceptable for the reason that the matter has now been conclusively determined by the Full Bench in Ram Kishan's case (supra) on which reliance has been placed by the first appellate Court. In the said judgment 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 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 R.S.A.No.3398 of 2008 -5- 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 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 R.S.A.No.3398 of 2008 -6- 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 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 R.S.A.No.3398 of 2008 -7- 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 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 R.S.A.No.3398 of 2008 -8- 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.” In this view of the matter, when the nature of the mortgage is not in dispute, the old adage that 'once a mortgage always a mortgage' aptly sums up the present case in view of the observations of the Full Bench reproduced above. The question of law that arises is “whether there is any time prescribed for redeeming an usufructuary mortgage and if such a mortgage is there, does it confer ownership rights on the mortgagor? For the reasons which have been stated above, the question of law has been answered by the Full Bench to state that there is no time limit for usufructuary mortgage and the right of the mortgagor to redeem the usufructuary mortgage cannot be extinguished by the efflux of time. For the reasons stated above, the appeal being devoid of any merit is dismissed. 11.5.2009 (MAHESH GROVER) JUDGE dss