Case: Prithi Nath Singh And Others Vs. Suraj Ahir And Others

mortgagee, at the date of decree for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption.9. What Subba Raos case, 1949 FCR 484: (AIR 1950 FC 1) referred to by learned counsel for the respondents, lays down is simply this that right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist. The following observations at p. 498 (of FCR): (at p. 7 of AIR) support, by implication, the view taken by us:"The document passed in favour of the wife of the mortgagor can be described as a reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption. The mortgagor was not even a party to that document. The second document executed by the mortgagor is an agreement to convey the lands after three months. There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein. This was only an agreement to convey the lands after three months, and if at all the question of extinction of the equity of redemption could arise on the conveyance being executed but not before."10. There are other cases also which throw a light on this question and go against the contention of the respondents.11. In Samar Ali v. Karim-ul-lah, ILR 8 All 402 at p. 405 it was said:"Now, as I have said, the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve per cent interest had been realised by the mortgagee from the profits of the property".12. In Muhammad Mahmud Ali v. Kalyan Das, ILR 18 All 189 at p. 192 it was said:"It cannot be disputed that the right of redemption presupposes the existence of a mortgage on certain property which at the time of redemption is security for the money due to the mortgagee. It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemption can be exercised in respect of such property only as is subject to a mortgage capable of enforcement."There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money.13. In Balkrishna v. Rangnath, ILR (1950) Nag 613 at p. 621: (AIR 1951 Nag 171 at p. 173) it was said:"Now the right to redeem can only be extinguished by act of parties or by a decree of a Court. (See the proviso to S. 60 of the Transfer of Property Act.) But when it is by act of parties the act must take the shape and observe the formalities which the law prescribes. One method is by payment in cash. In that event nothing is necessary beyond the payment."14. In Ramprasad v. Bishambhar Singh AIR 1946 All 400 the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. Braund 1., said, at p. 402:"Now, it is quite obvious that section (S. 60 of the Transfer of Property Act) can only refer to a case in which a mortgagor under a subsisting mortgage approaches the Court to establish his right to redeem and to have that redemption carried out by the process of the various declarations and orders of the Court by which it effects redemption. In other words, S. 60 contemplates a case in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due. Section 52 on the other hand, is in marked contrast to S. 60. Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (in a case in which the mortgagee is authorized to pay himself the mortgage money out of the rents and profits of the property) the principal money is paid off. As we see it, that is not a case of redemption at all. At the moment when the rents and profits of the mortgaged property sufficed to discharge the principal secured by the mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. The framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off."15. We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943, and that the respondents cannot get the advantage of S. 6 (1) (c) of the Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]When the mortgage money is paid by the mortgagor to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an interest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immovable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money.5. Further, the definition of usufructuary mortgage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up.The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise.It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to anright entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property; (ii) to deliver possession to the mortgagor if the mortgagee is in possession; and (iii) to retransfer the mortgaged property in accordance with the desire of the mortgagor. If the mortgagee receives the money and does not perform any of the three acts required of him to be done, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue. If the mortgagee is not to perform these acts the mortgagor is not to pay the amount. If, however the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court. A new right to get his demands enforced through the Court thus arises as a result of the provisions of S. 60 of the Act.8. If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right to redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.This is also clear from the decree for redemption. Order XXXIV, R. 7. C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of decree for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit forWe therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943, and that the respondents cannot get the advantage of S. 6 (1) (c) of the Act.