Soni Lalji Jetha vs Sonl Kalidag Derchand and Others

Chhatpar, J.—The facts In brief leading to the meal are as under. On 12-12-1907 one Soni ViMi Sundarji as ''Karta'' of try; joint family consisted of himself and other coparceners, mort. gaged with possession two shops situate at Jamnagar to Jehta Ranchhod, the father of the present Appellant and Respondent 3 i.e. Kalji and, sons of Jetha. The mortgage was for Rs 800/- and was redeemable after eight, years. No interest was; to be charged and no accounting of the rent was to he made by the mortgagee. In possession Both the mortgagor and the mortgagee are dead.

On 25-8-1930, the surviving coparceners and, representatives of Soni Virji Sundcrji entered an agreement to sell these two shops along with three other properties to the Respondents 1 and 2, but no conveyance deed was executed. On 10-9-1930, same persons executed a stile deed in respect of the two shops mortgaged with Jehta Ranchhod in favour of his two sons Lalji and Kanji, the Appellant and Respondent 3, This sale deed was duly rot.

Thereafter on 1-10-1930, Respondents 1 and 2 filed a suit being Suit No. 263 of Samvat Vear 1987 for .specific performance against the vendors and (n that suit only Respondent 3 Kanji Jehta was added no party. Lalji the present Appellant was not made a party. The suit was dismissed but on appeal the decision was reversed. A decree for specific performance was passed in 1943 in favour of Respondents 1 and 2 against the venders.

Kanji Jehta''s defence, inter that he was n bona fide purchaser for value was negatived. However as he was the mortgag, and no prayer in that suit was made for redemption of the mortgage and for wresting possession from him, the appellate Court said that the decree for specific performance was subject to Kanji Jehta''s rights to continue in possession of the two shops till the Plaintiffs redeemed the mortgage of 1907. This decision was given on 16-8-1943.

On 28-10-1947. the present suit which gives rise to the present appeal was filed by the first two Respondents against the Appellant and Respondent 3 for redemption of the mortgage of 1907. The trial Court decreed the suit for redemption to the extent of half share of Kanji in the mortgage rights as the decree of the appellate Court In the prior suit only bound Kanji jehta Lalji being not a early to the suit.

From this decree, the Plaintiffs, the first two Respondents filed an appeal an3 Lalji Jehta the present Appellant filed cross-objections as he had sot up a plea that he had purchased the share of Kanji in the mortise rights which was negative. The lower Appellate Court, accepted the appeal of the first two Respondents and held that they were entitled to redeem the whole interest of the two brOrs. in the mortgage, while the cross-objections of Lalji were dismissed.

Lalji has filed the present appeal making his brother Kanji Respondent 3. Of the two brOrs. , Kanji is the elder one. It appears that their dither had other sons as well who had separated during his life time. So the question under consideration is as regards his two sons Kanji and Lalji.

Various interesting points arise in the present tlitigation. Mr. O.H. Ooshi, the learned advocate for the Appellant, has first tried to show that there was a partition between the two bro-tintra Knnji and Lnljl and they were (separate did Mint. the half share of Kanji in the mortgage was transferred to Lalji no that the latter alone was possessed of the mortgage rights.

Laiji also contended that the decree in the was not binding on him: Mh WIM hot a party to the suit. The lower appellate Court held that there was or partition between the bro. there, nor any relinquishment of the share of Kanji In favour of Lalji in the mortgage rights. The two brOrs. continue to be the members of a joint Hindu family of which the ''karta was Kanji and he sufficiently represented the interest of Lalji the younger brother in the prior suit.

Now the question whether there-was a partition between the two brOrs. or whether there in any conveyance of the half hero of Kanji in favour of Lalji, is one of loot, and camion-be its-field in a Court of second appeal. So it must be accepted that the two or Ors. were members of a Joint Hindu family of which Kanji being the elder, was the manager; and it must also be held that that it was not necessary to join Lalji in the prior suit, although the conveyance on 10-9-1930 was passed ay toe descendants of the original mortgagor in favour of both Kanji and Lalji.

It is not necessary to show in the, plaint the representative character of the manager of a joint family. If in fact, he did represent the family. It would suffice to bind the decree on all the members of the joint family. So we start with these conclusions that the sale deed in respect of the two shops executed in. favour of Lalji and Kanji on 10-9-1930 was void against the first two Respondents as held by the decree for specific performance passed in the prior suit to which Kanji was ft'' party.

The next question that arises is of considerable legal importance and it relates to the question of adverse possession. Kanji and Lalji had obtained a regular duly registered sale deed in their favour in September, 1930. Before that they were already in possession as mortgagees and up-till now they .have continued in possession.

The question of adverse possession resolves into two parts, first, whether the possession of; Kanji and Lalji became adverse, from September, 1930 by virtue of the sale deed which in effect meant the transfer of the equity of redemption in the mortgage already held by them. The second point relates to the effect of the decree in the prior suit to which Kanji was a party.

Chitaley and Rao in their Commentary oni the. Indian Limitation Act, 3rd Edn. at page 2208,"says:

A mortgagee entitled to possession of the mortgaged property under the terms of his mortgage, cannot, during the subsistence of the mortgage, convert his possession, by assertion or unilateral act, into one adverse to the mortgagor. The reason is that his possession is only derivative one and not hostile to the mortgagor.

A number of rulings are cited to which I peed not refer as this principle is settled law. But a further question that arises is and which has been dealt with by the learned authors at page 2212, where the mortgagor sells the equity of redemption to the mortgagee who is already in possession under his mortgage, but the sale is found to be invalid Does the possession of the mortgagee from the date of the sale become adverse to the mortgagor? They say, in some cases it has been held, that it could not be adverse on the general principle that a mortgagee cannot, by assorting possession as owner, convert his possession as mortgagee into one as owner.

On the other hand, there are numerous authorities and the general trend of opinion is that from the date of the sale the possession of the mort-gages would become adverse to the mortgagor. Various reasons have been advanced in support of this latter view. One reason is that though the possession of the mortgage be referred to, the title which her has, an ouster be presumed from the date of the sale, and that consequently the possession of the mortgagee would be adverse to the mortgagor. ;

The second reason Is that since the parties could, by common consent, put an end to the mortgagee�s estate, the sale would operate as such agreement to put an end to the mortgagee''s estate as such, and that therefore, the mortgagor would'' at once be entitled to possession with the consequence that the possession of the mortgagee thereafter would be adverse to the mortgagor. The third reason advanced is that where a change in the character of possession is brought about W an-agreement between the parties or with their expressed consent as distinguished tam acquiescence, the possession will become adverse from that date.

I agree with the majority view of the judgments of the High Courts that the possession of the mortgagees would be adverse to the mortgagor .from the date of the sale deed which in the present close, would be September 1930. The latest case before me is that of the Patna High Court in Markanda Mahapatra v. Varada Kames-war Rao. AIR 1049 Pat 197 (A). It was held:

A mortgagee cannot, by a mere assertion of his own or by a unilateral act on his own part, Convert his possession as mortgagee into that of absolute owner, where path the mortgagor and the mortgagee agree by a transaction, to which they are parties, that the character of possession as mortgagee should change into that of possession as absolute owner in spite of the invalidity of transaction to convey title at once, the possession so given can operate on the expiry of the statutory period to create title by adverse possession.

This conclusion was arrived at by a review of the case law on the subject. An earlier decision of the same Court in Santokhi Misser and Another Vs. Siro Jha and Others, , has also been relied upon by Mr. Doshi, wherein it was held that the principle that so long as mortgage subsists mortgagee cannot acquire, as against the mortgagor, any title by adverse possession in the mortgaged property does not apply to a case where the relation of mortgagor and mortgagee has ceased, as for example by oral sale of the mortgaged property to the mortgagee.

A decision of the Madras High Court in Karnam Kandaswamy Pillay Vs. Chinnabha alias Subbaraya Pillay and Others, was relied upon. Several other rulings have been cited on the general principle that a possession under an invalid title must be regarded as adverse. I need n6t refer to the authorities cited.

Chitaley & Rao have summarised the above principles with which I agree.. So I must hold that the possession of Kanji and Lalji of the two shops in question was converted from that of the mortgagees-in-possession into that of owners by reason of the sale deed executed in their favour in September, 1930 and from this date their possession was adverse against all those persons who Questioned their title under this conveyance deed.

It was undoubtedly adverse against the mortgagors and it would be equally adverse against their assignees. The first two Respondents were the assignees from the mortgagors and the possession would be adverse to them from September, 1930 the present suit has been filed In 1947 for redemption of the mortgage and possession of the two shops. It would be barred by limitation.

We have however to consider the question of the effect of the prior decree obtained by them against the mortgagors to which Kanji was a party. The important question in the present suit would be whether this decree had the effect of stopping the running of the period of limitation which ripened the adverse possession of Kanji and Lalji into ownership, or a fresh period of adverse possession from the date of the appellate decree in 1943 would be needed to perfect their title.

The subject has been dealt with in the Commentary of Chitaley and Rao on the Indian Limitation Act at page 2303, and it has been pointed out that neither the filing of the suit nor obtaining a decree would prevent the interruption of adverse possession. It must be remembered that in the prior suit the first two Respondents had not claimed redemption of the mortgage in favour of Kanji and Lalji''s father.

Kanji was merely made a party as the conveyance deed was passed in his and his brother''s favour under which they were claiming full title to, the property and not merely as mortgages in-possession. It was held in that suit that this trans. action was collusive and void against the prior con. tract for sale of the two shops along with three other properties in favour of the first two Respondents.

The decree on the contrary emphasises the void character of the transaction; so it gave a taster emphasis on the fact that their possession claimed as full owners of the two shops was adverse. In support Of decision Privy Council which has-been referred to anted in several other cases. -In A, S, S. Subbaiya Pandaram v. Mohammad Mustafa Maracayar, Mil 1" 23 PJ 175 (D) Urieaanio case reported in 46 Mad 751 wherein the facts ore mentioned), the facts were that the Appellant was a trustee under a registered deed executed fey his grand-father in 1890 endowing ''Chhatram'' of immovable property, In 1898, the first Respondent Mohmniiuul Mustafa Mnrucuynr purchased a part of the property at a sale In execution of a decree against the Appellant''s father, the then trustee, for debts incurred by him. The purchaser and the other Respondents who claimed under him had. been in possession since that date.

In 1904, in a suit in which Respondent 1 was Defendant the Appellant obtained a decree declaring the validity of the trust, and thereafter in 1913, the Appellant sued the Respondents for possession of the purchased property, it was held that the decree of 1904 did not operate as res judicata mm to preclude the Respondents from asserting that the property was now theirs, and the Plaintiffs'' suit was barred under either Article 134 or Article 144, Limitation Act, Sch 1, The decree merely the fact that the purchaser''s possession was ad. verse. During the course of the judgment, their Lordships observed:

Now the real argument in favour of the Appellant was that In the presence of the purchaser it was declared that the trust had been validly created and that the property was, in fact, trust property, and it is suggested that this effects resjudicata as against the Respondents and prevents them from now asserting that the property is their own.

Their Lordships do not think that the decree had that effect. At the moment when it was passed, the possession of the purchaser was adverse, and the declaration that the property had been property made subject to a trust disposition, and therefore ought not to have been seized, did not disturb or effect the quality of -his possession; it, merely emphasized the fact that it was adverse. No further step was taken in consequence of that declaration until the present proceedings were instituted, when it was too late.

The Bombay High Court in Akbarali Mir Im-ayatalli v. Abdul Ajiz Mirsaheb Jahangirdar, AIR 1920 Bom 61 (E), had laid down a contrary proposition. It was held:

The period of adverse possession is calculated for the benefit of the party setting up adverse possession, and if a decree is passed against him then there is an end of that period, and he must, if he wishes to acquire a good title by adverse possession, start afresh after the decree.

This decision must now be considered as overruled by the Privy Council decision and it has been so considered by later decision of the samo Court. I first refer to a decision of the Bombay T Iigh Court in Narayan Jivaji Patil Vs. Gurunathgouda Khandappagouda Patil, where the Privy Council case was followed and it was held that the pendercy of a prior suit did not prevent adverse possession which had already started, from running further. I would next refer to a decision of the same Court in Bhogilal Kripashankar Vs. Ratilal Balkrishna, . It was held:

Where the widow of a deceased member of an undivided Hindu family, governed by Mlta-kshara who is entitled to maintenance out of the Joint family estate and to residence in the portion of the family house, trespasses upon certain property of the family and claims it in her own right to the widow of her deceased husband, her possession an its inception is adverse to the survivor In the coparcenaries unless it is the result of an arrangement between her and the surviving coparcener; and the latter who obtains a decree for immediate possession but fails to execute the same until it is barred u/s 48, fresh suit on the same cause of action against the transferee of the widow is barred by Sections 11 and 47. Nor can it be converted Into an application for execution u/s 48; and the mere declaration of Plaintiff''s title does not deprive her of her possession nor alter its character, but on the other hand emphasises the fact of its adverse quality and the inaction of the coparcener in not. enforcing the decree in time defeated his right against the widow or any person claiming three per.

It was pointed out that the decision in AIR 1920 Bom 61 (E) was no longer good law. Reference was made to the above cited Privy Council and various other rulings of other High Courts. In Vishu Janardan v. Mahadev Keshav AIR 1942 Bom 44 (H), it was similarly pointed out that this Bombay decision in Akbarali Mir Imayatalli v. Abdul Ajiz Mirsaheb Jahangirdar (E), was no longer good law in view of the Privy Council ruling.

It was held that when a trespasser was In and the Court makes a declaration showing Unit his possession was wrongful that did not effect the quality of his possession but merely advertised the fact that it was adverse. The Privy Council case as also the above cited earlier Bombay case in AIR 1039 Bom 2C1 (G), were followed. And lastly I may refer to a decision of the same Court in Dagdabai Fakirmahomed v. Sakliaram Gavaji, AIR 1948 Bom 149 (I). The same principles are laid down.

Applying the above principles I am constrained to hold that the possession of Kanji and Lalji, by virtue of the sale deed in their favour in September, 1930, became adverse to the mortgagors and therefore against their assignees, the Plaintiffs in the present suit.

The passing of the decree for specific performance in favour of the assignees against the mortgagor, in a suit to which Kanji was a party had not the effect of interrupting or wiping out the adverse possession, and consequently the present suit filed for redemption and possession in 1947 barred by limitation;

The result is that the appeal is allowed and the suit of the first two Respondents is dismissed. As regards costs, the conduct of the Appellant and his brother Kanji has been anything but honest and fair. They got the conveyance of the two shops with notice of the prior contract of sale in favour of the Plaintiffs as held in the prior suit.

The Plaintiffs have failed on the technical adored of limitation and adverse possession. While they were fighting the milt for specific performance Mw limitation was running; against them. That suit, and the appeal took Inordinately long time, as a result of which adverse possession of the Appellant and Respondent 3 ripened into ownership

Under these peculiar circumstances, I order that parties should bear their own costs throughout.