RSA No. 1676 of 2009 (O&M) 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH R.S.A. No. 1676 of 2009 (O&M) Date of Decision: September 03, 2009 Bachni Devi and others ...........Appellants Versus Hans Raj and others ..........Respondents Coram: Hon'ble Mrs. Justice Sabina Present: Mr.Robin Dutt, Advocate for the appellants. ** Sabina, J. Plaintiffs filed a suit for declaration. The suit of the plaintiffs was dismissed by the Civil Judge (Junior Division) Jagadhri vide judgment and decree dated 2.1.2006. Aggrieved by the same, the plaintiffs filed an appeal which was dismissed by the Additional District Judge, Yamuna Nagar vide judgment and decree dated 4.3.2008. Hence, the present appeal by the plaintiffs. The facts of the case, as noticed by the Additional District Judge in paras 2 to 4 of its judgment, read as under:- “ 2. The brief facts leading to filing of the present appeal are that the plaintiffs had filed a suit seeking decree of declaration regarding their title over the suit property, fully detailed and described in the head note of the plaint with consequential relief RSA No. 1676 of 2009 (O&M) 2 of permanent injunction restraining the defendants inter-alia on the averments that the suit property was mortgaged vide mutation no.333 dated 10.10.1954 with possession by Hans Raj and Gainda in favour of Teja, Narata and Karta against a sum of Rs.500/- . The suit land has not been got redeemed within the stipulated period of 30 years, thus, the equity of redemption stands extinguished by efflux of time and as such plaintiff no.1 Teja, Narata, predecessor-in-interest of plaintiffs no. 2 to 6 along with defendant no.9 have become owners in possession of the suit land. However, the defendants without any right, title or interest are intending to alienate the suit property and are causing interference in the ownership rights of the plaintiffs over the suit property. Hence, they have sought a decree for declaration regarding their title over the suit property. Further relief of permanent injunction restraining the defendants no.1 to 8 from interfering the ownership rights of the plaintiffs and defendant no.9 over the suit property and also from alienating the suit property in any manner has been prayed for. 3. On notice, defendants no.1 to 8 have contested the suit. While admitting the factum of mortgage, it is pleaded that the mortgage was a simple mortgage and the possession of the suit property was delivered. While denying the claim put forth by the plaintiffs qua their ownership right over the disputed property, it is pleaded that the answering defendants have already filed application before the Collector, Yamuna Nagar for redemption of the mortgage. It is further added that the mortgage money has RSA No. 1676 of 2009 (O&M) 3 already been given to the mortgagees. While denying all the other averments made in the plaint, the maintainability of the suit has been challenged and dismissal of the suit was prayed for. 4. Defendant No. 9 in his separate written statement had admitted the claim of the plaintiffs in toto. 5. The plaintiffs had filed their replication against the written statement filed by the defendants no. 1 to 8 wherein while controverting the averments made in the written statement, the stand as taken in the plaint was reiterated. On the pleadings of the parties, the following issues were framed by the trial Court:- “1. Whether the plaintiffs and defendant no.9 are liable to be declared as owner in possession of the suit land by efflux of time?OPP 2. Whether the plaintiffs are entitled for injunction as prayed for?OPP 3. Whether the suit of the plaintiffs is not maintainable?OPD 4. Whether the defendants are entitled for special costs under Section 35-A CPC?OPD 5. Relief." After hearing the learned counsel for the appellants, I am of the opinion that the present appeal deserves to be dismissed. The case of the appellants is that the suit property was mortgaged vide mutation No.333 on 10.10.1954 with possession by Hans Raj and Gainda Ram in favour of Teja, Naurata and Karta Ram against a sum of Rs.500/-. But the same had not been got redeemed within the RSA No. 1676 of 2009 (O&M) 4 stipulated period of 30 years. Hence, the plaintiffs-appellants had become owner of the suit property by efflux of time. The case of the defendants, on the other hand, is that it was a case of simple oral mortgage. The possession of the land had not been delivered to the mortgagee. Defendants had applied to the Collector, Yamuna Nagar for redemption of the land in dispute. Learned Additional District Judge in the judgment has observed that Mutation (Exhibit P1) was sanctioned on 12.1.1955. In the remarks column, it has been mentioned that the suit land had been mortgaged with possession for a sum of Rs.500/- on 10.10.1954 and Gainda Ram was described as mortgagor. Learned Additional District Judge further observed that DW3 Mam Chand, son of Gainda Ram, mortgagor, also admitted that his father Gainda Ram and Hans Raj had mortgaged the suit land with possession in the year 1954 in favour of Teja Ram, Naurata and Karta Ram and since then they were in possession of the suit land. He further stated that Rs.500/- were paid by the uncle of Teja Ram but no receipt was issued. The said factual observations have not been controverted during the course of arguments. In these circumstances, the learned Additional District Judge rightly held that it was a case of mortgage with possession. In the instant case, no time limit has been prescribed to redeem mortgage. The present mortgage in question is,thus, usufructuary mortgage. As per Article 61 of the Limitation Act, 1963, a suit can be filed by the mortgagor to redeem or recover possession of the immovable property mortgaged within 30 years when the right to redeem or recover the possession accrues. Thus, the right RSA No. 1676 of 2009 (O&M) 5 to seek redemption will arise on the date when mortgagor pays or tenders or deposits in the Court the mortgaged money or balance thereof. The contesting defendants had deposited the mortgaged amount of Rs.500/- on 22.3.2000. Thus, the contesting defendants have already exercised their right to seek redemption of mortgage. It has been held by the Full Bench of this Court in Ram Kishan and others Vs. Sheo Ram and others, 2008 (1) PLR 14 which is 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 Sections 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 conscience. 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 RSA No. 1676 of 2009 (O&M) 6 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, 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 mortgages 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 RSA No. 1676 of 2009 (O&M) 7 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) beings 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 accrues 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 RSA No. 1676 of 2009 (O&M) 8 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 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 RSA No. 1676 of 2009 (O&M) 9 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." In these circumstances, both the Courts below rightly held that Teja Singh or his legal representatives had failed to establish that they had acquired ownership rights qua the suit property by efflux of time. No substantial question of law arises in this regular second appeal which would warrant interference by this Court. Accordingly, this appeal is dismissed. ( Sabina ) Judge September 03, 2009 arya