Natesa Thevar vs Narayanaswami Padayachi and Others

Chandra Reddi, J.—This second appeal which was referred to a Bench by Satyana-rayana Rao J. raises a question under the Limitation

Act. The facts of the case lie within a narrow compass and are not in dispute, the only controversy being whether it is article 134 or 144 or 148 of

the Limitation Act that applies to this case. In order to appreciate the point involved in the second appeal, it is necessary to refer to the facts briefly

giving rise to this litigation. The suit properties were mortgaged by one Sivanandi Thevar usufructuarily to one Kamakshia Pillai for Rs. 225 on 14-

2-1891 the period fixed for redemption being 25 years. The mortgagee executed a simple mortgage of his othi right over the suit properties to

Periasami Odayar on 5-4-1898 according to the plaintiff, while it is the defendants'' case that it was a mortgage of the properties themselves.

Kamakshia Pillai executed another simple mortgage over the same properties to one Chidambara Aiyar for Rs. 290.

Periasami Odayar filed a suit on his mortgage, obtained a decree and, in execution of the decree brought the properties to sale which were

purchased by one Venkatarama Aiyar at the auction. Chidambara Aiyar also laid an action on his mortgage and in execution of the decree

purchased the properties himself. The auction purchasers obtained the sale certificates under Exs. D-l and D-2 and got into possession of the

properties. They continued to be in possession and enjoyment thereof till they sold them to the predecessors-in-interest of defendants under Ex. P-

4 dated 24-9-1913. The plaintiff who purchased the equity of redemption under two sale deeds Exs. P-5 and P-6 in 1936 and 1943 has filed the

present suit for redemption of the mortgage of 1891 and for possession of the suit properties in the District Munsif''s Court of Mayavaram.

One of the defences to the suit was that as the entire interest in the suit properties was sold in court auctions of 1902 and 1904 and the

mortgagee was dispossessed shortly thereafter by the auction purchasers who continued to be in possession as absolute owners ever since, till the

latter sold them to the predecessors-in-interest of defendants with absolute rights, any right which the original mortgagee had in those properties

was lost by limitation and adverse possession. Another plea was that even if the plaintiff was entitled to redeem the mortgage the defendants should

be paid compensation for the buildings erected by them on the suit properties.

The trial court dismissed the suit holding that the suit was barred by Article 134 of the Limitation Act as it was filed beyond 12 years from the

date of the sale to the predecessors-in-interest of defendants on 24-9-1913. Another finding given by it was that in case the plaintiff was entitled to

redeem the mortgage, he was liable to pay a sum of Rs. 1000 by way of compensation.

On appeal, the Subordinate Judge of Mayavaram confirmed that judgment agreeing with all the conclusions of the trial court, The plaintiff who

was dissatisfied with the decisions of the courts below has preferred the second appeal.

In this second appeal, the correctness of the findings of the courts below is assailed. It is urged by Mr. Gopalaswami Aiyangar in support of the

appeal that Article 134 is not applicable to this case but it is Article 148 that governs it. According to him, the reasons for the non-applicability of

Article 134 are three fold. What was purchased at the court auction in 1902 and 1904 was only the mortgage rights and similarly what was sold by

the auction purchasers in 1913 to the predecessors-in-interest of the defendants was only that right and therefore the provisions of Article 134 are

not attracted by this case. Secondly, the transfer under Ex. P-4 in 1913 was not made by the mortgagee within the meaning of Article 134; thirdly,

a transfer by a sub-mortgagee does not come under Article 134 and lastly on the date on which the transfer was effected in 1913 the right of

action had not accrued to the mortgagor to sue for redemption in view of fixing a period of redemption.

Before we examine the soundness of these contentions, it is necessary to set out the relevant provisions of the Limitation Act. Article 134

prescribes a period of 12 years for recovering possession of immovable property conveyed or bequeathed in trust or mortgaged and afterwards

transferred by the trustee or mortgagee for a valuable consideration from the date when the transfer becomes known to the plaintiff. The third

column ""when the transfer is known to the plaintiff"" was substituted by the Amending Act of 1929 for the words ""the date of the transfer"". As the

transactions in question were effected prior to the amendment of this Article, we are concerned only with the Article as it stood prior to 1929.

Article 148 is in the following words:

Against a mortgagec toredeem or to 60 year''s. When the right toredeem

recover possession of immove-able or to recover possession

property mort-gaged. accrues.

It is not necessary for the purpose of this enquiry to refer to the proviso.

In view of the contentions raised on behalf of the respondents we will set out the provisions of Article 144 also. Article 144 is a residuary article

laying down a period of 12 years for a suit for possession of immovable property or any interest therein not otherwise specially provided for in the

Act, the period of limitation starting from the time when the possession of the defendant becomes adverse to the plaintiff.

We will first deal with the applicability of Article 134. From the provisions of that Article, it is clear that it applies to a conveyance by a

mortgagee of an interest larger than he himself has in the property. This has not been disputed but how the learned counsel for the appellant sought

to get over this was by arguing that what was purchased in the court auctions in 1902 and 1904 and what was sold by them in 1913 was only the

right of the mortgagee and not the full ownership in the property. It looks to us that this is a futile attempt having regard to the terms of the various

documents which fully support the concurrent finding of the courts below that under the Court sales absolute title to the properties passed to the

auction purchasers and they in their turn transferred the full ownership in the properties to their vendees in 1913. It follows that Article 134 will

govern the case if the other requirements of that article are satis-fled.

The next point for consideration therefore is whether there was a transfer by the mortgagee within the meaning of Article 134. We will have first

to decide whether the sales of the properties in execution of the decrees on the mortgages obtained by Periaswami Odayar and Chidambara Aiyar

in 1902 and 1904 amount to a transfer by a mortgagee so as to attract the provisions of Article 134. An answer to this is to be found in -- ''Ahmed

Kutti v. Raman Nambudri'', 25 Mad 99 . It was laid down ''there that a person who purchased the immovable property of the judgment-debtor in

which the latter''s interest was only that of a mortgagee, in court auction could not get the benefit of Article 134 of Schedule II of the Limitation Act

as such an auction purchaser could not be regarded as a purchaser from the mortgagee even if the whole interest in the property was sold at the

auction. The Full Bench observed :

Article 134 is in our opinion intended solely to apply to cases in which the mortgagee disposes of the property voluntarily. But in the case of the

involuntary sale in execution of a decree the purchaser cannot be regarded as a purchaser, from the judgment-debtor.

This ruling of the Full Bench is still good law and its authority has been accepted by the Privy Council in -- ''Sudarsan Dos v. Rama Das'', 1950 1

M. L. J. 243 . On these authorities, there can be no doubt that so far as court sales in this case are concerned, they are not transfers within the

purview of Article 134.

We have next to consider whether the sale of the properties by the auction purchasers by private treaty in 1913 is a transfer within the meaning

of Article 134. If it is a transfer as contemplated by that Article, the period of limitation has to be reckoned from 24-9-1913 and the suit would be

beyond time. The answer to this question depends upon whether the auction purchasers are mortgagees within the purview of Article 134.

For the proposition that the auction purchasers are mortgagees whose transfer to the predecessors-in-interest has the effect of attracting the

provisions of Article 134 reliance is placed by Mr. Bhashyam learned counsel for the respondents on -- ''Kannusami Thanjirayan v. Muthuswami

Pillai'', 5 Mad L W 250. There, one of the questions for consideration was whether Article 134 applied to a transfer of absolute interest by a

person who acquired only the mortgage rights in a court auction. Spencer and Phillips JJ. before whom the matter came up finally, answered it in

the affirmative. The ratio decidendi is contained in the following passage:

Against this it is argued that the purchaser of the mortgagee''s interests is not himself a mortgagee within the meaning of the article. In a similar case

decided by Charmer J. in -- Ghasi Ram v. Mt. Kishna'', 30 Ind Cas 564 , it was held contra that the auction purchaser of the rights of the

mortgagee steps into the shoes of the mortgagee and that the subsequent purchasers by private treaty from the auction purchaser can rely on

Article 134 to defeat a plaintiff seeking to redeem.

It should be observed that this is all the discussion on that question in that case. It was contended by Mr. Bhashyam that the correctness of this

decision had not been doubted by our Court in any subsequent case; on the other hand, it had been followed in two cases in -- ''Sesha Naidu v.

Periasami Odayar'', 44 Mad 951 and -- ''Muthaya Shetti v. Kanthappa Shetti''. 34 M.L.J. 431. An examination of the decision in -- ''Sesha Naidu

v. Periasami Odayar''. 44 Mad 951 shows that -- ''Kannusami Thanjirayan v. Muthuswami Pillai'', 5 M. L. W. 250 was not referred to with

approval by Spencer J. for the position now contended for by the learned counsel for the respondents.

In this context the observations of Spencer J. at page 952 are apposite:

-- ''Kannusami Thanjirayan v. Muthuswami Pillai'', 5 M. L. W. 250 was an instance of a conflict between Article 134 and Article 144. I then

observed that it was clear that the plaintiff could not have resort to Article 144 unless he first showed that Article 134 was inapplicable, the reason

being that Article 144 is the residuary article for suits for the possession of immovable property as is indicated by the words ''not hereby otherwise

specially provided for.

-- ''Muthaya Shetti v. Kanthappa Shetti'', 34 M.L.J. 431 has nothing to do with the question before us. Even in this case -- ''Kannusami

Thanjirayan v. Muthuswami Pillai'', 5 M.L.W. 250 has been referred to only with reference to the question of good faith. Mr. Bhashyam also drew

our attention to a ruling of a single Judge of the Allahabad High Court in -- Abdul Aziz Vs. Munni Lal , which followed the ruling of Chamier J. in -

- ''Ghasi Ram v. Mt. Kishna'', 30 Ind Cas 564 . It may be remarked that there also there is no discussion on the question beyond merely citing --

''Ghasiram v. Mt Kishna'', 30 Ind Cas 564 .

Mr. Gopalaswami Aiyangar the appel-lant''s counsel argued that -- ''Kannuswami Thanjirayan v. Muthuswami Pillai'', 5 Mad L W 250 was

not correctly decided and is opposed to the principle enunciated in -- ''Ahmed Kutti v. Raman Nambudri'', 25 Mad 99 and some decisions of

Allahabad High Court and requires reconsideration. He also urged that the interpretation placed by the learned Judges on the word ""mortgagee'' in

Article 134 of the Limitation Act is not borne out by the provisions of the Transfer of Property Act. It was maintained by him that if as decided in -

-''Ahmed Kutti v. Raman Nambudri'', 25 Mad 99 a sale of the mortgaged properties in execution of a decree against the mortgagee is not a

transfer which means that a purchaser at a court auction is not a transferee from the mortgagee, such a purchaser cannot be described as a

mortgagee within the meaning of that article. He referred us to the following statement of the Full Bench in the above mentioned case and

contended that a court auction purchaser could not be termed a mortgagee for the purpose of Article 134:

The decision in -- ''Muthu v. Kambalinga''. 12 Mad 316 proceeds we think on the erroneous assumption that the court in selling the judgment-

debtor''s property in which his interest is that of a mortgagee for the discharge of the debt due, by him under the decree is exercising the power of

sale which the judgment-debtor ''qua'' mortgagee possesses. Assuming he has power of sale, the court may be regarded as exercising that power

in a suit which the mortgagee may bring against the mortgagor for the recovery of the mortgage debt. Such power of sale cannot be exercised for

the benefit of the mortgagee to enable him to discharge a debt due by him to a third party.

According to the learned counsel these observations lend support to his argument. It has to be noted that it is the creditor of the mortgagee

who brings the properties to sale and gets the properties sold through the intervention of the court and this circumstance, so argues the learned

counsel, shows that the buyer of the properties at the court auction is not a mortgagee. It is further maintained by him that a mortgage can be

created only by contractual relations between the parties and not by operation of law and as substantiating this argument he invited our attention to

Section 5 of the Transfer of Property Act which lays down as follows:

In the following sections ''transfer of property'' means an act by which a living person conveys property, in present or in future to one or more

other living persons or to himself or to himself and one or more other living persons; and ''to transfer property'' is to perform such act.

In this section ""living person"" includes a company or association or body of individuals whether incorporated or not, but nothing herein contained

shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.

It is unnecessary to state that transfer of property includes a mortgage. It is urged on behalf of the appellant that it is manifest from the section that

there can be no transfer of property within the meaning of the Transfer of Property Act by involuntary sales such as sales in execution of a decree

and a mortgage being a transfer of property it cannot be created by an executing court bringing the properties to sale in execution against the

mortgagee.

There seems to be considerable force in the contention of Mr. Gopalaswami Aiyangar and this is supported by some of the decisions of the

Allahabad High Court.

In -- Mt. Ram Piari v. Budh Sen'', 43 All 164 it was laid down that Article 134 was excluded by the fact that the vendors from the court

auction purchasers had not purchased from the mortgagee but that they had acquired rights by virtue of an involuntary sale. In support of this

conclusion the learned Judges relied on -- ''Ahmed Kutti v. Raman Nambudri'', 25 Mad 99 and -- ''Bhagwan Sahai v. Bhagwan Din'', 9 All. 97

which took the same view as in -- ''Ahmed Kutti v. Raman Nambudri'', 25 Mad 99 and another case. This ruling was followed by a single Judge

of that court in -- Munawar Ali Vs. Jagmilan Ram and Others, . However, it is not necessary for us to consider whether -- ''Kannusami

Thanjirayan v. Muthuswami Pillai'', 5 M. L.W. 250 is correctly decided or not having regard to the fact that the present case is distinguishable from

the facts of that case. It has to be observed that in -- ''Kannusami Thanjirayan v. Muthuswami Pillai'', 5 M.L.W. 250, what was acquired by the

auction purchasers was only the mortgage rights and not the absolute title to the properties mortgaged.

Whatever justification there might be for characterising the auction purchaser in such a case as one stepping into the shoes of the mortgagee, none

exists in a case, as in the present one where the auction purchasers acquired full ownership in the suit properties and not a limited mortgage right

and therefore could not be called mortgagees within the meaning of Article 134. They never occupied such a position with reference to the suit

pro-perties, they having purported to have pur-chased not the limited mortgage interest but the whole interest in the property. The expression

mortgagee cannot include a person who has acquired full interest in the property and not the limited mortgage light. This, in our opinion, is sufficient

to dispose of that question.

In this view of the matter it is unnecessary to consider the soundness of the contention that Article 134 is not applicable to the case as at the

time of the sale in 1913, cause of action had not accrued to the mortgagor to institute a suit for redemption and lor possession by reason of the

fixation of a period of 25 years for redemption, or to refer to the decisions which take the view that a suit for redemption has to be filed within 12

years of the transfer by the mortgagee of the properties in excess of the interest he has therein even if the cause of action had not accrued to the

mortgagor or to the cases which take a contrary view.

But this does not dispose of the appeal. It is argued by the learned counsel for the respondents that even if Article 134 is inapplicable, the suit

should be held to be barred by limitation under Article 144 of the Limitation Act and that in no event does Article 148 apply to this case. His

argument is that in view of the finding that it was not the mere mortgage right but full ownership in the properly that was sold both at the court

auctions in 1902 and 1904 and by the auction purchaser by private treaty in 1913 and there was dispossession of the mortgagee from the suit

properties which were enjoyed ever since by the predecessors-in-interest and subsequently by the defendants as full owners the suit should be held

to be barred under Article 144 of the Limitation Act,

We will have no hesitation in accepting the argument that the sale of both the mortgagee''s and the mortgagor''s interest in execution of the

decree against the mortgagee and the dispossession of the mortgagee from the mortgaged properties will be adverse to the mortgagor also

provided it is proved that the mortgagor had knowledge of the hostile acts or of the adverse possession. There is abundant authority for the

proposition that Article 144 is applicable to cases where the mortgaged properties are sold as absolute properties of the mortgagee without any

limitation on the interests thus sold and subsequently the vendee enjoys the properties in his own right and to the knowledge of the mortgagor. It is

not necessary to refer to the various cases cited in this regard. -- ''Mt. Ram Piari v. Budh Sen'', 43 All 164 which has already been referred to

itself illustrates this principle.

But before Article 144 is applied it should be established that to the knowledge of the mortgagor the possession of the purchasers was adverse to

the former. It was laid down in -- ''Peria Aiya Ambalam v. Shanmugasundaram'', 38 Mad 903 that when a transferee dispossesses a mortgagee in

possession and continues in possession of the property setting up a title adverse not only to the mortgagee but also to the mortgagor such a

dispossession will become adverse to the mortgagor from the date of the latter''s knowledge of such hostile acts. At page 913 of the report it is

remarked by Sankaran Nair J. who delivered the judgment of the Full Bench thus:

If the mortgagee in possession is dispossessed on grounds affecting only his right, as for instance, his right as heir to represent the original

mortgagee, or his eight as in --''Purmananddas Jiwandas v. Jamna Bai'', 10 Bom 49 to possession in spite of a third party''s lien on the property

then the dispossession of the mortgagee obviously does not imperil or call in question any right of the mortgagor and the mortgagor is not

concerned or entitled to insist on being immediately restored to possession; and the possession taken is not adverse to him and cannot cause time

to run against him. To give the mortgagor a right to insist on immediate possession, there must be art unequivocal ouster preventing the possession

of the mortgagor from continuing altogether by leaving no room for doubt that the person taking possession does not profess to represent the

mortgagor but to hold in spite of him. In such a case, the mortgagor is as effectually and unmistakably displaced as if there had been no mortgage

at all. When an ouster takes place in that manner the mortgagor knows that no one is in possession who can represent or continue his possession,

or who is entitled preferentially to possession and, therefore, he becomes entitled and it is necessary and his duty, if he does not want his right to be

barred to claim possession immediately.

On these authorities, it is clear that if the mortgagor had knowledge of the fact that the properties as such were sold in the court auctions and

subsequently by the court auction purchasers to the predecessors-in-interest of the defendants the plaintiff''s suit for redemption will be barred. If

the suit is barred under Article 144 of the Limitation Act, there will be no scope for the applicability of Article 148 of the Limitation Act.

In these circumstances, we have to consider whether either the plaintiff or his predecessors-in-interest the mortgagor had knowledge of these

facts. Dealing with the question of adverse possession, the trial court stated as follows:

It is conceded by Mr. Rajaram Aiyar for the defendants that he could not in any sense urge adverse possession in his clients with any effect. He

conceded that he could succeed on this point only if he could show that the possession of Chidambara Aiyar and Venkatarama Aiyar was adverse

both to the mortgagee and the mortgagors to the knowledge of the mortgagors. There was no attempt to show any such thing. My finding on this

issue is in the negative.

Mr. Gopalaswami Aiyangar calls in aid this finding in support of his contention that the suit is not barred under Art, 144 and invites us to hold that

he is still in time having regard to the provisions of Article 148. He also relies on the following statement of the lower appellate court:

There is no question of adverse possession here since even in the trial court the learned pleader for the defendants conceded that he could

succeed on that point only if he could show that the possession of Chidambara Aiyar and Venkatarama Aiyar was adverse both to the mortgagee

and to the mortgagors to the knowledge of the mortgagors and that there was no attempt to show any such thing.

But unfortunately further down the learned Subordinate Judge states something which is contradictory. In the same paragraph the Subordinate

Judge remarks that he could not believe that the plaintiff who is no other than the brother''s son of Sivanandi Thevar the mortgagor under Ex. P-2

did not know about the transfer or the persons who had been in possession of the properties ever since the year 1891 & that he would not believe

that the plaintiff had been ignorant of what was being done in respect of the properties which his uncle Si-vanandi had mortgaged to Kamakshia

Pillai in the year 1891.

He further remarked:

Surely in the circumstances of this case he must be deemed to have known not only the simple mortgages executed by Kamakshia Pillai, Exs. P-2

and P-3, but also the subsequent court auction sales Exs. D-1 and D-2 and the private sales under Exs. D-3, D-4, D-5 and D-6. Now he feigns

ignorance of all these things and having obtained two sale deeds from the heirs of Sivanandi Thevar, tries a chance of obtaining the properties

which are now said to be very valuable on the doubtful non-applicability of Article 134 to the facts of this case.

Having regard to the contradictory statements made by the learned Subordinate Judge, we are obliged to call for a clear finding from him as to

whether the plaintiff was aware of the adverse possession of the defendants and their predecessors-in-interest. The Subordinate Judge is

accordingly directed to submit a finding on that question within six weeks from the date of the receipt of the records in his court. Two weeks

thereafter for objections if any.