R.S.A.No.1375 of 2007 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No.1375 of 2007 (O&M) Date of Decision : 15.5.2009 Smt.Leela ....Appellant Versus Smt.Lehni and others ...Respondents CORAM : HON'BLE MR.JUSTICE MAHESH GROVER .... Present : Mr.Vinod S. Bhardwaj, Advocate for the appellant. Mr.N.S.Panwar, Advocate for respondents No.1 to 5. None for respondents No.6 to 9. Mr.Karan Sharma, Advocate for respondents No.10 to 13. ... MAHESH GROVER, J. This is defendant's second appeal directed against the judgments of the learned trial Court dated 27.3.2006 and that of the first appellate Court dated 30.11.2006. The plaintiffs/respondents filed a suit by pleading that they were successors-in-interest of deceased Ram Singh whereas the defendants/appellant are successors-in-interest of deceased Bhola, R.S.A.No.1375 of 2007 (O&M) -2- who was the son of original mortgagor Ruldhu. It was the case of the plaintiffs/respondents that the suit property, which has been detailed in para 1 of the plaint, was owned by deceased Raldhu and during his life time he mortgaged the same with possession in favour of Asha Ram son of Solhu, Sunehra son of Ami Lal and Zia Lal son of Shiv Lal on 16.3.1930 for a consideration of Rs.1,055/- It was further pleaded that the original mortgagees Asha Ram, etc. mortgaged the suit property with possession in favour of Ram Singh, the predecessor-in-interest of the plaintiffs/respondents vide oral mortgage deed dated 9.4.1951 for a sum of Rs.1,055/- and in this respect mutation No.1823 was sanctioned by the then Asstt. Collector IInd Grade, Gohana. It was further pleaded that ever since the plaintiffs are mortgagees in possession whereas the defendants/appellant are mortgagors. It was pleaded that Ram Singh died about 25/26 years back leaving behind the plaintiffs/respondents to be his legal heirs and they succeeded to the property after his death. Vide suit No.2 dated 27.2.1979, titled Smt. Kalawati and others v. Smt. Parwari and others, the defendants/appellant filed an application for redemption of the suit property against the plaintiffs/respondents, which was dismissed on 26.11.1979 by the Collector, Gohana and the aforesaid order has attained finality as no appeal or revision was filed against the said order. It was thus pleaded that by efflux of time they have become owners of the suit property as the defendants/appellant have failed to redeem the same within the period of limitation, i.e. 30 years. Upon notice, defendants No.1 to 4 (appellant and R.S.A.No.1375 of 2007 (O&M) -3- respondents No.6 to 8 in the present appeal) contested the suit and filed a joint written statement in which the factum of mortgage was admitted. However, it was stated that the mortgage was for an unlimited period. However, it was denied that the plaintiffs/respondents have become owners of the suit property, as the answering defendants have already paid them the mortgage money. It was then pleaded that the possession of the suit property was delivered back to the defendant/appellant who in turn sold the same to Umed Singh son of Surat Singh on 26.3.2003 for a consideration of Rs.5,20,000/- and possession had been delivered to him and now he is owner in possession of the same, and since he has not been impleaded as a party, hence the suit is bad for mis-joinder of necessary parties. The parties went to trial on the following issues :- 1. Whether the plaintiffs be declared owners of the suit property measuring 34 kanals 6 marlas?OPP 2. If issue No.1 is proved, whether the plaintiffs are entitled for relief of permanent injunction as prayed for?OPP 3. Whether the suit of the plaintiff is not maintainable in the present form?OPD 4. Whether the suit of the plaintiffs is bad for non- joinder of necessary parties?OPD 5. Whether the plaintiffs have no cause of action and locus-standi to file the present suit?OPD 6. Whether the plaintiffs have suppressed the material R.S.A.No.1375 of 2007 (O&M) -4- facts from the Court?OPD 7. Relief. Both the Courts below concluded amongst the other facts that the suit was barred by limitation as the mortgage was not redeemed within 30 years and consequently decreed the suit of the plaintiffs which has resulted in filing of the present regular second appeal in which learned counsel for the appellant contended that the matter has now conclusively been settled by the judgment of the Full Bench in Ram Kishan and others v. Sheo Ram and others 2008(1) P.L.R. 1 wherein the following observations have been made :- “31. After considering the aforesaid judgments, we respectfully agree with 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 R.S.A.No.1375 of 2007 (O&M) -5- 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 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 R.S.A.No.1375 of 2007 (O&M) -6- 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 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 R.S.A.No.1375 of 2007 (O&M) -7- 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 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 R.S.A.No.1375 of 2007 (O&M) -8- 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.” It is thus the case of the appellant that once the Full Bench has concluded the matter by observing as above, the appeal has to be accepted and the judgments of the learned trial Court and that of the first appellate Court have to be set aside and the right of the appellant to redeem the mortgage has to be protected. On the other hand, learned counsel for the respondents contended that the judgments of the learned trial Court and the first appellate Court are perfectly in order as the suit is clearly barred by limitation. Both the Courts have conclusively held that the plaintiffs/respondents have become the owners of the suit property by efflux of time. After hearing the learned counsel for the parties, I am of the opinion that the question of law which arises for the consideration of this Court is “whether the right of a mortgagor to redeem the usufructuary mortgage can be extinguished with the efflux of time?” R.S.A.No.1375 of 2007 (O&M) -9- Since the matter has now been settled by the Full Bench in Ram Kishan's case (supra), with the observations expressed above, I hold that the right of the mortgagor to redeem the usufructuary mortgage cannot be extinguished by efflux of time. Consequently, the appeal is allowed and as a consequence thereof the findings recorded by the Courts below are set aside and the appellant shall be entitled to redeem the mortgage. The suit of the respondents is dismissed. 15.5.2009 (MAHESH GROVER) JUDGE dss