C. Balakrishnan vs M. Bhaskaran

Radhakrishna Menon, J.—The judgment debtor is the revision Petitioner. Respondent is the decree holder. The suit was one for redemption and recovery of possession of the plaint schedule properties with mesne profits. The suit was decreed on 15th day of July, 1980. The decree reads:

That it is hereby declared that the amount due to the Defendant on the mortgage mentioned in the plaint calculated up to the 4th day of October, 1978 is the sum of Rs. 3,000.

That the mortgage amount having been deposited in Court on 20th June 1978.

That the suit be and the same is hereby decreed for redemption and recovery of possession and the Defendant do surrender possession of the plaint schedule property on or before 14th September 1980 with mesne profits at the rate of Rs. 450 per year from 20th June 1978 till delivery of possession of the plaint schedule property to the Plaintiff.

And that the Defendant do pay the Plaintiff interest at the rate of 6 per cent per annum on the arrears of mesne profits....

Essential facts relevant for the disposal of the issues arising in the revision petition, lie in a narrow compass. During the pendency of the suit, the learned Munsiff referred the question, whether the Petitioner is a kudikidappukaran, to the Land Tribunal under Sub-section (3) of Section 125 of the Kerala Land Reforms Act. The Land Tribunal in its turn, found that the Petitioner was not a kudikidappukaran within the meaning of Section 2(25) of the K.L.R. Act and consequently the suit was decreed as prayed for. Since the Petitioner refused to deliver the property pursuant to the directions contained in the decree, the Respondent-decree holder filed the petition, E.P. 13/84, for executing the decree. The Petitioner filed E.A. 27/84 containing the prayer that the question whether the Petitioner is a kudikidappukaran be referred to the land Tribunal for a de novo enquiry u/s 125(3) K.L.R. Act. This application was opposed by the decree holder. His argument that the earlier order of the Land Tribunal that the Petitioner-judgment debtor was not a kudikidappukaran within the meaning of Section 2(25) of the K.L.R. Act on a reference to it u/s 125(3) during the pendency of the suit, would operate as res judicata, was accepted by the executing Court and as a result of it the above E.A. was dismissed by the order under challenge in the C.R.P.

A learned Single Judge of this Court in Ratnamma v. Kamalamma Pillai 1983 KLT 227 in similar circumstances has held that an earlier order would not operate as res judicata and as such the application for reference made by a judgment debtor in the execution proceeding, is sustainable. The correctness of the decision was doubted and accordingly the case was adjourned u/s 3 of the Kerala High Court Act for being heard by a Division Bench by the learned Judge who admitted the C.R.P. The reference order reads.:

Advocate Sri R.D. Shenoi takes notice on behalf of the Respondent. He challenges the correctness of the decision of a learned Single Judg of this Court reported in 1983 K.L.T 227. The learned Judge in the said decision has held that an earlier order inter parties which has become final is not binding at the execution stage. The question involved requires consideration by a Division Bench. I therefore refer this case to a Division Bench....

That is how the matter is before us.

That the order of the Land Tribunal disposing of the reference u/s 125(3) K.L.R. Act made by the trial Court during the pendency of the suit had found that the Petitioner was not a kudikidappukaran within the meaning of Section 2(25) K.L.R. Act, is beyond dispute. The counsel for the Petitioner however, submits that the said order will not operate as res judicata because the said order was made at a time when the decree for redemption had not been passed although the suit for redemption was pending consideration. Where a mortgagee with possession erects for his residence a homestead, or resides in a hut already in existence, on the land which is the subject-matter of the mortgage, he shall, the redemption of the mortgage not withstanding, be deemed to be a kudikidappukaran in respect of such homestead or hut provided that at the time of the redemption he has no other kudikidappu or residential building belonging to him, or any land exceeding three cents in any city or major municipality or five cents in any other municipality or ten cents in any panchayat area or township, in possession either as owner or as tenant, on which he could erect a homestead and his annual income does not exceed two thousand rupees. Section 2(25) Explanation IV. So ''at the time of the redemption'' if the usufructuary mortgagee is a kudikidappukaran within the meaning of Explanation IV of Section 2(25), he cannot be evicted, the learned Counsel submits. Whether or not the Petitioner was a kudikidappukaran within the meaning of Explanation IV to Section 2(25) "at the time of the redemption of the mortgage" could not have been considered by the Court during the pendency of the suit for redemption because its fate was still uncertain, and, therefore, the order disposing of the reference u/s 125(3) by the Land Tribunal would not prevent the Petitioner from seeking a reference u/s 125(3) of the question to the Land Tribunal in the execution proceedings afresh, the learned Counsel submits. It is in support of this contention he has pressed into service the principle enunciated by this Court in Retnamma''s case 1983 KLT 227.

The counsel for the Respondent on the other hand contents that the right of redemption vested in the Respondent u/s 60 Transfer of Property Act must be deemed to have been extinguished on the Respondent depositing the mortgage money u/s 83 of the T.P. Act. In any event, the learned Counsel submits that the said right of redemption must be deemed to have been extinguished with effect from 20th June 1978, the date on which the mortgage money was deposited in the trial Courts after the filing of the suit. He has in this connection, made particular reference to the directions in the decree that the Petitioner shall surrender possession of the plaint schedule property on or before 14th September 1980 with mesne profits at the rate of Rs. 450 per year from 20th June 1978, the date on which the mortgage money was deposited in Court, till delivery of possession of the plaint schedule property to the Plaintiff. That there is no direction in the decree to deposit the mortgage money is more than sufficient to hold that the right of redemption got extinguished with effect from 20th June 1978. This argument at first blush is attractive; but on a deep probe into the controversy it is clear that the same is without substance. Right of redemption vested in the mortgagor u/s 60 T.P. Act can be extinguished only either by act of parties or by decree of Court. This is a well established principle. A reference in this connection to the principle discernible from the decision of the Madras High Court in Kunhothi v. Koya AIR 1949 Mad. 443 is profitable. That the right of redemption in the case on hand was not extinguished by act of parties, is beyond dispute. The said right therefore could be extinguished only by a decree of Court.

As there was no possibility of getting this right extinguished by act of parties, the Respondent decree holder first sought relief u/s 83 T.P. Act and accordingly deposited the amount remaining due on the mortgage as on that date and sought an order directing notice to the Petitioner. The Petitioner herein, instead of receiving the money, disputed the correctness of the same, it is argued on behalf of the Petitioner-whatever that be-and consequently the petition was dismissed. It is by now well established that the making of a deposit of the mortgage money u/s 83 does not ipso facto extinguish the mortgage where the mortgagee has refused to accept the deposit. To put it differently if the deposit is not accepted, the mortgage does not get extinguished; that means the parties continue to have the relationship of mortgagor and mortgagee. The mortgagee in such circumstances, holds the property as a kind of trustee for the mortgagor and as such accountable to the latter for profits. In other words the mortgagee continues to be a mortgagee with the statutory liability to account for the profits received by him from that date. In such circumstances it is for the mortgagor, if he wants to redeem the mortgage, to bring a suit for the enforcement of his legal rights and unless and until he does so successfully, the mortgage continues to subsist. See Rukminibai v. Venkatesh ILR 31 Bomb. 527 and Harbans Narain Singh Vs. Ramdhari Mahton and Others, .

Going by this principle it is clear that the attempt on the part of the Respondent mortgagor to get the mortgage extinguished by moving the Court u/s 83, got foiled. Presumably thereupon he filed the suit for redemption and recovery of possession of the property with mesne profits. A suit for redemption is governed by Order 34 Code of Civil Procedure. In a decree for redemption the Court declares the amount due to the Defendant at the date of such decree for the principal and interest on the mortgage, the costs of suit, if any, awarded to him, and other costs, charges and expenses properly incurred by him upto that date in respect of his mortgage-security, together with interest thereon; and if the Plaintiff pays into Court the amount so found or declared within the stipulated period the Defendant is bound to deliver upto the Plaintiff etc...all documents in his possession or power relating to the mortgaged property and also retransfer the property to the Plaintiff at his cost free from the mortgage and all encumbrances created by him or any person claiming under him. Only on the passing of such a decree and on the mortgagor depositing in Court the price of redemption as directed by the decree, it can be said that the right of redemption got extinguished by decree of Court. (See Prithi Nath Singh and Others Vs. Suraj Ahir and Others, and Varkey Paily v. Kurian Augusthy 1967 KLT 189 (F.B.). Unless and until such a decree is passed and the price of redemption as determined by the Court is deposited, it cannot be said that the right of redemption is extinguished; and that is why the principle that a mortgagor can bring successive suits for redemption of the same mortgage has been recognised by judicial pronouncements.

Reverting to the facts of the case: could the earlier decision of the Tribunal on the question whether the Petitioner is a kudikidappukaran operate as res judicata, disentitling the Petitioner from raising it in the execution proceedings afresh? In this connection it certainly is relevant to bear in mind the principle firmly established by judicial pronouncements that unless the matter was substantially in issue in the previous proceedings, the same will not operate as res judicata though the same was directly in issue at that stage having been raised in the said proceedings. To understand the matter covered by the question, we should first ascertain the meaning of the words "at the time of the redemption". The words "at the time of the redemption" are not synonymous with the words "at the time for redemption", enabling the mortgagor either to initiate proceedings u/s 83 T.P. Act or to institute a suit for redemption and recovery of possession. The time for redemption is, any time after the money payable in respect of mortgage has become due and before the suit for redemption of the mortgage property is barred. The institution of such a suit however, does not ipso facto extinguish the mortgage. The mortgage comes to an end or the right of redemption would get extinguished only on the mortgagor depositing the price of redemption pursuant to the directions contained in the mortgage decree. The time at which the deposit aforementioned is made, is "the time of redemption" of a mortgage under law. It is thus clear that ''this time'' could arise only after the passing of the decree. If the judgment debtor refuses to hand over the documents and also deliver back the property to the decree holder on his depositing the price of redemption pursuant to the directions contained in the decree, the decree holder necessarily has to initiate execution proceedings for recovery of possession of the property. That is the stage at which the question whether a mortgagee with possession is a kudikidappukaran falls for consideration. The matter will be substantially in issue only at this stage. If that be the position in law, the application, the Petitioner had filed in the execution proceedings seeking reference of the above question to the Land Tribunal u/s 125(3) K.L.R. Act was maintainable notwithstanding the order, entering the finding that the Petitioner is not a kudikidappukaran, disposing of the reference u/s 125(3) on an earlier occasion bus during the pendency of the suit. We have already found that the kudikidappu claim falling under Explanation IV of Section 2(25) could not have been agitated by the Defendant during the pendency of the suit and therefore the question whether the earlier order of the Land Tribunal would operate as res judicata really does not arise. The ruling of this Court in Retnamma v. Kamalamma Pillai 1983 KLT 227 according to us, lays down the correct law.

Yet another aspect that should be borne in mind while interpreting provisions like explanation IV to Section 2(25) K.L.R. Act is this: The Act being a welfare legislation, ameliorative in nature, the conditions for its applicability and the exceptions to its operation have to be searched in the legislation itself, construing the same strictly and giving the benefit of doubt if any to the tenants for whose benefit it is designed. In other words if the provision is capable of having two meanings, the meaning which would preserve the benefit should be adopted. Assuming that the interpretation suggested by the counsel for the decree holder is possible, the said interpretation suggests only one of the two meanings that could be attributed to the provision. The meaning highlighted by us in the discussions above however, should be adopted as the same would preserve the benefit sought to be given to the tenant by the provision.

For the reasons stated above the C.R.P. requires to be allowed. We accordingly allow the petition and set aside the order under challenge. We direct the executing Court to refer the question whether the Petitioner is entitled to the benefit of Explanation IV to Section 2(25) K.L.R. Act to the Land Tribunal u/s 125(3) of the K.L.R. Act.