Bhandaru Ram (dead) through L.R. Rattan Lal vs Sukh Ram and Others

Deepak Gupta, J.—This Regular Second Appeal is directed against the judgment and decree dated 24.08.1999 passed by the learned District Judge, Bilaspur, whereby he dismissed the appeal filed by the appellant-defendant and upheld the judgment and decree of the learned Sub Judge, Bilaspur, dated 27.04.1992, whereby he decreed the suit of the plaintiff and a decree for possession through redemption of the suit land in favour of the plaintiff was passed.

The appeal was admitted on a number of questions of law attached with the grounds of appeal, but I feel that these questions do not arise in the appeal and the only question of law which arises is whether the suit filed by the plaintiff was within limitation and whether any limitation is prescribed for a suit where possession is sought by redemption of a usufructuary mortgage?

The case of the plaintiff was that the mortgage between the parties was executed sometime on 27.01.1962 and, therefore, the suit instituted on 11.06.1990 was within limitation. The stand of the defendant was that, in fact, the land had been mortgaged on 26.01.1958 and it was only the mutation which was entered and attested at a later stage. The stand of the defendant was that since the suit was instituted more than 30 years after the execution of the mortgage deed, the same was not within limitation.

At the time of hearing of this appeal, the defendant raised a preliminary contention that as per law laid down by this Court, there is no limitation prescribed for filing a suit for redemption of a usufructuary mortgage. I feel that this preliminary objection must be decided first, because if I uphold the same, the suit would be within limitation whether the mortgage deed was executed in 1958 or 1963. If I do not agree with the plaintiff-respondent, then also I cannot decide the matter and it will have to be referred to a larger Bench, since this Court in earlier decisions has taken the view that there is no limitation prescribed for filing a suit in the case of usufructuary mortgage.

The Apex Court in Harbans Vs. Om Prakash and Others, after reviewing the entire law on the subject clearly approved the law laid down in Seth Ganga Dhar Vs. Shankar Lal and Others, and held that the law laid down in State of Punjab and Ors. v. Ram Rakha and Ors. AIR 1997 SCW 2005 was per incuriam. The Court upheld the judgment of the Punjab and Haryana High Court, which had held that in the case of usufructuary mortgage, when no time was fixed for redeeming the same, the mortgagor has a right to get his property redeemed at any time since there is no limitation for the mortgagor. The Apex Court quoted with approval the following passage from Mulla''s The Transfer of Property Act, Ninth Edition, relevant portion of which reads as follows:

The right of redemption is an incident of a subsisting mortgage and subsists so long as the mortgage itself subsists. It can be extinguished as provided in the section and when it is alleged to be extinguished by a decree, the decree should run strictly in accordance with the forum prescribed for the purpose. Dismissal of an earlier suit for redemption whether as abated or as withdrawn or in default would not be barred the mortgagor from filing a second suit for redemption so long as the mortgage subsists and the right of redemption is not extinguished by the efflux of time or by a decree of the court in the prescribed form.

A redemption pre-supposes the existence of a ''mortgage''. As defined in the Act, a mortgage is a transfer of an interest in immovable property for the purpose of securing the payment of a loan. It is created by the act of parties. In an usufructuary mortgage, a transfer is made of the right of possession and enjoyment of the usufruct. The rights of a usufructuary mortgagee forms part of the bundle which constitute ownership. The remainder still remains with the mortgagor and can be transferred by him. The mortgagor''s right is as indicated in Section 60 of the Act i.e. after the principal money has become due, the mortgagor has a right to pay the mortgage money and on such payment, he has the right to require the mortgagee to deliver possession. This right cannot be extinguished except by the act of parties or by a decree of a Court. This right is called the right to redeem and a suit to enforce it is called a suit for redemption. Thus the scope of a suit for redemption is preliminary to enforce the right to make a payment of the mortgage money. A claim to redeem a mortgage actually does not attach to the land, although the decree passed in the suit may ultimately affect possession which is also an interest in land.

Mr. G.D. Verma placed reliance upon a subsequent decision of the Apex Court in Prabhakaran and Others Vs. M. Azhagiri Pillai (Dead) by LRs. and Others, wherein the Apex Court held as follows:

An usufructuary mortgage is a transfer by the owner (mortgagor) of an interest in an immovable property for securing the amount advanced/to be advanced by the creditor (mortgagee), under which possession of the property is delivered to the mortgagee with authority to retain such possession and enjoy the rents and profits therefrom, until the debt is paid (vide Section 58(d) of the Transfer of Property Act, 1882, for short ''T.P. Act''). The owner/mortgagor, who continues to hold the bundle of rights constituting ownership, minus the right to possession, has the right to recover possession of the mortgaged property by paying the mortgage debt. The said right to recover possession (along with the right to receive back the documents relating to the mortgaged property and the right to obtain a deed of reconveyance/retransfer of the mortgaged property) is known as the right of redemption of the mortgagor and is statutorily recognized in Section 60 of T.P. Act. Such right of redemption can be extinguished during the subsistence of the mortgage only by the act of parties or by decree of a court. This Court in Jayasingh Dnyanu Mhoprekar and Another Vs. Krishna Babaji Patil and Another, observed:

It is well-settled that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of 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 who has entered into possession of the mortgaged property under a mortgage will have to give up possession of the property when the suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground. This flows from the legal principle which is applicable to all mortgages, namely, "Once a mortgage, always a mortgage.

Article 148 of the Limitation Act, 1908 (referred to as ''old Act'') provided a limitation of 60 years for a suit against a mortgagee, to redeem or to recover possession of immovable property mortgaged. The corresponding provision in the Limitation Act, 1963 (''new Act'' or ''Limitation Act'' for short), is Article 61(a) which provides that the period of limitation for a suit by a mortgagor to redeem or recover possession of the immovable property mortgaged is 30 years. The period of limitation begins to run when the right to redeem or to recover possession accrues. In the case of a usufructuary mortgage which does not fix any date for repayment of the mortgage money, but merely stipulates that the mortgagee is entitled to be in possession till redemption, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of the mortgage. Section 27 of the Limitation Act provides that "at the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished". This would mean that on the expiry of the period of limitation prescribed under the Act, the mortgagor would lose his right to redeem and the mortgagee would become entitled to continue in possession as the full owner.

(emphasis supplied)

It is submitted by Mr. G.D. Verma that the judgment in Harbans''s case supra does not specifically deal with the question of applicability of Limitation Act to usufructuary mortgages, whereas the second judgment in Prabhakaran''s case clearly lays down that a suit for possession by redemption of a usufructuary mortgage is governed by Article 61 (a) and the limitation would start immediately on execution of mortgage deed and the mortgagor has to file a suit for redemption within thirty years.

Mr. Deepak Bhasin, learned Counsel appearing on behalf of the respondents has relief upon a Division Bench Judgment of this Court in Jaimal and Others Vs. State of H.P. and Others, which was authored by me, wherein after referring to Ram Kishan and Others Vs. Sheo Ram and Others, this Court held as follows:

The right to redeem the mortgage arises only on payment of mortgage money or the balance thereof after adjusting the profits and benefits of the usufruct of the property against the interest, if any, prescribed. If no interest is prescribed, then the usufruct itself is treated equivalent to the interest. The mortgagee, therefore, adjusts the usufruct of the land and the profits thereof towards the interest on the mortgage amount. There is a well known principle of law that once a mortgage always a mortgage. If this principle is applied, then there is obviously no limitation prescribed unless the parties had agreed that the mortgage is only for a particular period in which event the limitation will start after the expiry of the said period. We may make it clear that this discussion is only in respect of usufructuary mortgages.

In view of the law laid down by the Apex Court and the ratio of the Full Bench of the Punjab and Haryana High Court with which we are in respectful agreement, we are of the considered view that no limitation was prescribed for redemption of the usufructuary mortgage and the application could not be held to be time-barred. As such, the respondents Nos. 3 to 5 were entitled to redeem the mortgage. Therefore, we dismiss the appeal though for totally different reasons. No order as to costs.

It would be pertinent to mention that this view has also been taken by Hon''ble Mr. Justice V.K. Sharma in, titled Parkash Chand and Ors. v. Amar Singh and Anr. RSA No. 378 of 2008, decided on 15.07.2010, wherein relying upon the judgment of the Apex Court and Harbans''s case supra, it was held that no limitation is applicable in the case where the mortgagor seems to redeem the property.

Hon''ble Mr. Justice Surjit Singh in Tula Ram and Anr. v. Shanti RSA No. 271 of 2002, decided on 07.09.2010, held as follows:

As the possession was with the mortgagees, the presumption is that the usufruct of the property was being appropriated by the mortgagees towards the interest on the mortgage money. There is no limitation for redemption of usufruct mortgage, especially such usufruct mortgage, which does not fix any period of mortgage and also does not stipulate that the usufruct of the mortgaged property, in full or part, is to be appropriated towards the principal debt or say the mortgage money.

The learned Judge, while passing the judgment, relied upon the judgment in Jaimal and Others Vs. State of H.P. and Others, Full Bench Judgment of the Punjab and Haryana High Court and the judgment of the Apex Court in Harbans''s case supra.

There is no manner of doubt that this Court, in all the judgments of this Court including the one delivered by me, had taken the view that in the case of usufructuary mortgage, no limitation is applicable. Unfortunately, subsequent judgment of the Apex Court in Prabhakaran''s case was never brought to the notice of any of the Judges of this Court. None of the Judges has taken note of the judgment of the Apex Court in Prabhakaran''s case. Prabhakaran''s case was decided later in time and I am, therefore, of the considered view that what is the effect of this judgment must also be considered. Therefore, without expressing any opinion on the merits of the contention as to whether limitation is applicable in such a case or not, in view of the fact that the judgment of the Apex Court in Prabhakaran''s case has not been considered by any of the Judges of this Court, I feel that this is a fit case where the matter should be referred to a larger Bench to decide the following question of law:

Whether any period of limitation is prescribed for filing a suit for possession of immovable property by redemption of a usufructuary mortgage which does not fix any time for repayment of mortgage money?

The papers of this case be placed before the Hon''ble Chief Justice for passing appropriate orders and constituting an appropriate larger Bench.