Kandaswami Mudaliar and Others vs Ponnuswami Mudaliar

Aaanthakrishna Aiyar, J.—The plaintiffs sued to redeem a mortgage. It was alleged that the deceased elder brother of the plaintiffs

usufructuarily mortgaged the suit land to the defendant for Rs. 50 on 29th July, 1903, under Ex. I. The defendant while admitting the mortgage

pleaded that he became the absolute owner of the property by purchase on 29th October, 1906, from plaintiffs Nos. 2 and 3 and that his

possession subsequent to 1908, was as an absolute owner, and though the sale-deed, Ex. II of 1906, was unregistered, his possession since 1906,

was as absolute owner and that he had acquired absolute title by adverse possession for more than 12 years. The plaintiffs impugned Ex. II as a

forged document, and the District Munsif found that Ex. II was not genuine and accordingly decreed redemption. On appeal by the defendant the

learned District Judge came to the conclusion on the evidence that Ex. II was genuine, that it was executed by the 2nd plaintiff and attested by the

3rd plaintiff, Holding that Ex. II was genuine he reversed the District Munsif''s decision and dismissed the suit observing as follows:

I cannot bring myself to believe that Ex. II was a forgery. I am satisfied the land was on that date sold to defendant. I find on the 2nd issue that the

sale is true and that though the sale-deed conveyed no title (being unregistered). I find under issue No. 3 that the possession of defendant was

adverse since the date of Ex. II and the suit is, therefore, barred by limitation.

The plaintiffs have preferred this second appeal to the High Court and on their behalf it was contended by Mr. M.S. Venkatarama Aiyar, the

learned Vakil for the appellant, that accepting Ex. II to be genuine, the defendant''s possession haying commenced lawfully as a usufructuary

mortgagee under the plaintiff''s family, and the sale-deed Ex. II being admittedly inadmissible to prove the sale, the defendant''s possession should

all along be considered to be that of a mortgagee, since a mortgagee in possession could not change the nature of his possession as mortgagee nor

convert it into adverse possession against the mortgagor. He relied on the decision of Milley and Sadasiva Aiyar, JJ., in Ariyaputhira Padayachi

and Others Vs. Muthukumarasami and Others, to the effect that the unregistered sale-deed, Ex. II, could not be referred to, to prove that the

defendant''s possession was as vendee. He further contended that the mortgagor was entitled to redeem at any time within 60 years under Article

148 of the Limitation Act and that the plaintiffs ought to have been given a decree for redemption.

On behalf of the respondent Mr. Seshagiri Sastri contended that sale-deed, Ex. II, though unregistered, was admissible to show the nature of

the subsequent possession held by the respondent. The learned Vakil relied on the decision of the Privy Council in N. Varada Pillai Vs.

Jeevarathnammal, and of the decision of the Full Bench of this Court in Rama Sahu (dead) and Others Vs. Gouro Ratho, in support of his position.

He also contended that the decision in Ariyaputhira Padayachi and Others Vs. Muthukumarasami and Others, is no longer law having been

dissented from subsequently in this Court; and he relied on the decision of Sundara Aiyar and Sadasiva Aiyar, JJ., in Umman Khan Vs. Nagalla

Dasanna and Others, followed by Ayling and Odgers, JJ. in Karnam Kandaswamy Pillay Vs. Chinnabha alias Subbaraya Pillay and Others, as

showing that the subsequent sale though invalid may be proved to show the nature of the possession subsequently held by the defendant.

In addition to the cases mentioned above, reference may also be made to the following cases which support the above position Ata Muhammad

v. Shankar Das 88 Ind. Cas. 872 : 6 Lah. 319 : AIR 1925 Lah. 491 : 7 Lah. L.J. 504 (unregistered lease-deed); (Maharani) Janki Kuer Vs. Birj

Bhikhan Ojha and Others, (unregistered lease-deed); Qadar Bakhsh v. Mangha Mal 73 Ind. Cas. 889 : 4 Lah. 249 : 5 Lah. L.J. 175 : AIR 1923

Lah. 495 (unregistered sale-deed); Jhamphu v. Kutramani 42 Ind. Cas. 713 : 39 A. 696 : 15 A.L.J. 761 (unregistered relinquishment deed);

Jagannath Marwari v. Chandni Bibi 67 Ind. Cas. 31 : 34 Cri.L.J. 432 : 26 C.W.N. 65 Mookerjee and Buckland, JJ., (unregistered deed of gift);

Thakore Fatesingji Dipsangji v. Bamanji Ardeshir Dalal 27 B. 515: 543 : 5 Bom. L.R. 274 (unregistered lease); Venkatachari v. Rangaswami

Iyengar 3 Ind. Cas. 223 : 6 M.L.T. 192; Musigadu v. Maneam Gopalu Reddy 63 Ind. Cas. 215 : 13 L.W. 400 : (1921) M.W.N. 251 and

Ahobilachariar and Others Vs. Thulasi Ammal and Others, .

Mookerjee, J., at page 436 of 34 C.L.J. while holding that a deed of gift if unregistered could not be received as evidence of any transaction

affecting Immovable property, observed as follows:

It was, however, admissible in evidence for a collateral purpose, namely, to explain the reason why Lakshmi Bibi received the income.

In his commentary on the Registration Act Mr. Mulla remarks as follows:

The decision of the Privy Council in Jeevarathammal''s case 53 Ind. Cas. 901: (1919) M.W.N. 724 : 10 L.W. 679 : 24 C.W.N. 346 : 38 M.L.J.

313 : 18 A.L.J. 274 : 2 U.P.L.R. (P.C.) 64 : 1919 22 Bom. L.R. 444 : 46 I.A. 285 is an authority for the proposition that a document which

requires registration under the Transfer of Property Act, but is not registered is nevertheless admissible to prove the character of the transferee''s

possession. Though Section 49 was cited in argument in that case, there is no reference to it in the judgment of their Lordships.

On the first question I feel pressed by these decisions and I think, therefore, that I am bound to hold that the unregistered sale-deed, Ex. II, is

admissible to prove the nature of the subsequent possession of the defendant. This is what the Privy Council say in Varada Pillai v.

Jeevarathnammal 53 Ind. Cas. 901 : 43 M. 244 : (1919) M.W.N. 724 : 10 L.W. 679 : 24 C.W.N. 346 : 38 M.L.J. 313 : 18 A.L.J. 274 : 2

U.P.L.R. (P.C.) 64 : 22 Bom. L.R. 444 : 46 I.A. 285 (P.C.):

Although the petition of 1895 and the change of names made in the register in consequence of those petitions are not admissible to prove a gift,

they may nevertheless be referred to as explaining the nature and character of the possession thenceforth held by Doraisami. In other words,

although the petitions and order do not amount to a gift of the land, they lead to the inference that the subsequent receipt of the rents by Doraisami

was a receipt in the character of donee and owner of the land and, therefore, in her own right and not as trustee or manager for her mother and

aunt.

Similarly in Rama Sahu (dead) and Others Vs. Gouro Ratho, the Full Bench held that an unregistered lease is admissible in evidence to prove

the, nature of the possession under that instrument. The first point has accordingly to be decided against the appellant.

Coming to the second point, no doubt, under ordinary circumstances a mortgagor has a period of 60 years within which he could sue to

redeem. As observed by the Privy Council in Khiarajmal v. Daim 32 C. 296 : 1 CRI.L.J. 584 : 32 I.A. 23 : 8 Sar. P.C.J. 734 : 9 C.W.N. 201 : 2

A.L.J. 71 : 7 Bom. L.R. 1:

The question at issue is exclusively one between mortgagor and mortgagee. As between them neither exclusive possession by the mortgagee for

any length of time short of the statutory period of 60 years, nor any acquiescence by the mortgagor not amounting to a release of the equity of

redemption will be a bar or defence to a suit for redemption if the parties are otherwise entitled to redeem.

It is clear that no unilateral declaration by the mortgagee alone that he is the owner of the properties would be effective to convert the character

of the mortgagee''s possession from that of a mortgagee to that of an absolute owner. But it does not follow that the equity of redemption could not

be lost to the mortgagors by reason of subsequent acts on their p Article The Privy Council expressly say that while mere acquiescence by the

mortgagors would not be enough, acts amounting to a release of the equity of redemption would be a bar or defence to a suit for redemption.

Section 60 of the Transfer of Property Act expressly enacts that mortgagors have got the right to redeem unless such right had been extinguished

by act of the parties, or by order of a Court. It is thus clear that such a right could be extinguished by act of the parties subsequent to the mortgage.

If the subsequent acts are evidenced by proper documents, then the equity of redemption would be affected directly on the execution of these

documents. If, however, the documents are inadmissible, for want of registration, or in case the subsequent transaction between the mortgagor and

the mortgagee be not evidenced by any writing at all but simply be oral then the result would be that the mortgagor''s equity of redemption would

not be put an end to at once but the subsequent possession on the part of the mortgagee would not be that of a mortgagee but that of an absolute

owner. As against parties entering into such transactions the mortgagee would acquire an absolute title to the property after the expiry of 12 years

from the date of these transactions. This position has been clearly laid down by Sundara Aiyar and Sadasiva Aiyar, JJ., in Umman Khan Vs.

Nagalla Dasanna and Others, . That ease is practically on all fours with the present in so far as the present contention is concerned. At page 547

Page of 37 M.--[Ed] the learned Judges say as follows: ""We shall assume that possession so taken would be held by him as mortgagee. But

assuming all this, what was there to prevent both the mortgagor and the mortgagee from agreeing that the mortgagee should, from a certain date,

hold possession as owner? Such an agreement may not be valid to confer immediate title on the mortgagee but as far as we are aware there is no

principle of law which prevents both parties from agreeing what the character of the possession to be held by the mortgagee should be from a

certain date. It is quite true that a mortgagee cannot by a mere assertion of his own or by any unilateral act of his convert his possession as

mortgagee into possession as absolute owner. That is a principle in favour of the mortgagor which prevents the mortgagee from altering the legal

character of his possession by his own act or assertion. That has been laid down in several cases, one of the carliest of which is Ali Muhammad v.

Lalta Bakhsh 1 A. 655 : 1 Ind. Dec.457. But they have no bearing on the question of the effect of an agreement between both parties that the

mortgagee should hold possession as owner and not as mortgagee."" Justice Sadasiva Aiyar, was a party to that decision. No doubt, the decision in

Ariyaputhira Padayachi and Others Vs. Muthukumarasami and Others, was by Mr. Justice Sadasiva Aiyar also and by Mr. Justice Miller and that

case Ariyaputhira Padayachi and Others Vs. Muthukumarasami and Others, is in favour of the appellant''s contention but the same has been

dissented from in Karnam Kandaswamy Pillay Vs. Chinnabha alias Subbaraya Pillay and Others, by Ayling and Odgers, JJ., who expressly

followed the decision in Umman Khan Vs. Nagalla Dasanna and Others, . The decision in Letters Patent Appeal No. 207 of 1915 (unreported) is

also relied on by the learned Judges in Karnam Kandaswamy Pillay Vs. Chinnabha alias Subbaraya Pillay and Others, as supporting the view

taken by them. The question also is discussed fully by Napier and Krishnan, JJ., in Musigadu v. Maneam Gopalu Reddy 63 Ind. Cas. 215 : 13

L.W. 400 : (1921) M.W.N. 251 where it was held that a usufructuary mortgagee to whom the property had been sold without a registered

instrument and who held possession of the property for over 12 years from the date of the sale, acquired a title to the property by adverse

possession even if the sale failed. Having regard to the decision in Ariyaputhira Padayachi and Others Vs. Muthukumarasami and Others, and to

the decision in an unreported, case (Appeal No. 40 of 1913) it seems to have been suggested to the learned Judges that the question should be

referred for decision by a Full Bench. With reference to this question Justice Krishnan observed at page 218 of 63 Indian Cases as follows:

I am inclined at one stage to have the question settled by a Full Bench. But in view of the Letters Patent Appeal which was decided by a Bench of

three Judges of this Court, I think it unnecessary to do so as we are bound to follow that ruling in preference to the other decision.

This is the view that has been adopted by the Allahabad High Court in Khedu Rai v. Sheoparson Rai 40 Ind. Cas. 121 : 39 A. 423 : 15 A.L.J.

366 and this view would seem also to receive support from the decision of the Privy Council in Mohomed Musa v. Aghore Kumar Ganguli 28 Ind.

Cas. 930 : 42 C. 801 : 17 Bom. L.R. 420 : 21 Cri.L.J. 231 : 1915 28 M.L.J. 548 : 19 C.W.W. 250 : 13 A.L.J. 229 : 17 M.L.T. 143 : 2 L.W.

258 : (1915) M.W.N. 621 : 42 I.A. 1.

Having regard to the decisions of this Court, noticed above, it seems to me that the second contention raised by the learned Vakil for the

appellant is unsustainable. In Letters Patent Appeal No. 207 of 1915 the learned Judges (Abdur Rahim, Offg. C.J., Seshagiri Aiyar and Burn, JJ.),

remarked as follows:

It is argued that since the oral sale is found to be invalid the value of the property being more than Rs. 100 the possession of the mortgagee should

not be held to be adverse. But the question whether possession is adverse or not depends upon the intention or animus of the parties. In the

circumstances of this case whether the defendants entered upon the possession of the property at first under the clause in the deed of mortgage or

not, their possession certainly since the date of the alleged oral sale was in their own absolute title. The principle of law that a mortgagee who

enters into possession in his capacity as such cannot acquire any right by adverse possession against his mortgagor is not applicable to a case

where the possession of the mortgagee was treated by the mortgagor himself as being in absolute right and not as mortgagee.

The learned Judges differed from the opinion of Spencer, J., and agreed with Phillips, J.

But on the special facts of this case, I think the finding of the learned District Judge already quoted, namely: ""That the possession of the

defendant was adverse since the date of Ex. II and, therefore, the suit is barred by limitation"" could not be accepted in its entirety. Exhibit II could

be taken to evidence the acts of the second plaintiff who executed it and of the third plaintiff who attested it. Prima facie it could not affect the

rights of the first plaintiff, whether plaintiffs Nos. 2 and 3 were entitled to represent the first plaintiff also or whether the first plaintiff was divided

from the other plaintiffs at the date of Ex. II are matters that would be relevant to the question. In the absence of a specific finding that the

possession of the defendant was adverse to the first plaintiff also, if the defendant could show sufficient evidence to that effect, we should hold that

the rights of the first plaintiff could not be barred by limitation. In this connection I may refer to the decision in Byari v. Puttanna 14 M. 38 : 5 Ind.

Dec. 27 and to the observations in Umman Khan Vs. Nagalla Dasanna and Others, . It was there pointed out by the learned Judges that if the

persons who executed the conveyance and those who consented to it had severable interest in the mortgaged property, the interests of such

persons would be bound and would pass to the mortgagee as the result of adverse possession by him. In the case of property belonging to a

Malabar tarwad or Aliyansantana family, the members have no several interest and consequently no legal right passes to the mortgagee by reason

of a transfer effected by some members only of a tarwad. In the case of a Mitakshara Hindu family in Madras coparceners have severable interests

and so the mortgagee would acquire the shares of the transferors. The lower Appellate Court will accordingly consider the question of adverse

possession raised in issue No. 3 in the light of the above observations so far as the first plaintiff''s rights are concerned; and in case the Court

should come to the conclusion, that the first plaintiff''s rights are not barred, it should give him appropriate relief that he may be entitled to. Section

60, para. 4 of the Transfer of Property Act may also be referred to, if necessary.

The case is, therefore, remitted to the lower Appellate Court for fresh consideration and decision so far as the first plaintiff''s rights are

concerned. As the appellants have substantially failed in their contention, we direct that they should pay half the costs of the respondent in the

second appeal. The costs of the re-hearing before the District Judge will be provided for by him. The decree of the lower Appellate Court is

reversed so far as the first plaintiff is concerned, and the appeal remanded to the lower Appellate Court for disposal in the light of the observations

contained in this judgment.

Jackson, J.

I agree.

I should not have considered Ex. II by itself evidence of a change in possession; but as one of the incidents of the events relied upon to use the

language of Walsh, J. in Jhamplu v. Kutramani 42 Ind. Cas. 713 : 39 A. 696 : 15 A.L.J. 761 as collateral evidence and in my opinion collateral

evidence of hardly any significance, it may be read with sworn testimony of the defendant, and with Ex. IV; and then, on this question of fact I

cannot positively say that the lower Appellate Court has erred.