Tara Chand (Dead) through his L.Rs. and Others vs Tilak Raj and Others

Deepak Gupta, J.—This Regular Second Appeal was admitted on the following substantial question of law:

Whether the suit of the Respondents-Plaintiff is barred by limitation?

The brief facts necessary for decision of the case are that one Suba Ram, predecessor in interest of the parties who are his great grand sons, had mortgaged 910 kanals of land with Sh. Dina Nath and Bishan Chand. Half of the land which was mortgaged with Bishan Chand was redeemed whereas the remaining half measuring 405 kanals remained mortgaged with Dina Nath. The Defendants who are the great grand sons of Suba Ram instituted a Civil Suit No. 597/1968 (175/1971) on 21.12.1968 for possession by way of redemption of the remaining 455 kanals of land which remained mortgaged with Dina Nath. A decree for redemption on payment of Rs. 5100/- was passed in favour of the Defendant and on deposit of this amount final decree was passed on 16.12.1974. The Plaintiffs in the present suit were arrayed as Defendants 2&3 in the aforesaid suit and an averment was made in para 10 of the plaint which reads as follows:

The Plaintiffs are entitled to remain in possession of the shares of Defendants No. 2&3 as charge holders till they pay

After passing of the final decree on 16.12.1974 the Defendant Tara Chand took possession of the land and mutation qua the decree of redemption was also sanctioned on 5.5.1976 but it appears that in these proceedings the names of the Defendants were recorded as mortgagees in possession in the revenue record.

The Plaintiffs filed the present suit on 16.6.1987 in which it was alleged that the suit land has been partitioned and allotted exclusively to the Plaintiffs in consolidation proceedings which took place subsequent to the decree dated 16.12.1974. It was also averred that Tara Chand had filed a Civil Suit against the Plaintiffs alleging that they were mortgagees in possession of the land and prayed that a decree for permanent injunction be passed restraining Ram Rattan and Ors. (present Plaintiffs) from interfering in their possession. Therefore, they filed the present suit claiming their half share in the land and claimed that they were entitled to 213 kanals and 14 marlas of land on payment of Rs. 2600/- being their contribution in the mortgage amount.

This suit was resisted on various grounds including the ground that the same was barred by limitation. It was alleged that the Plaintiffs have no right in the suit land since they had failed to pay the mortgage amount in the year 1974.

The learned trial Court came to the conclusion that the suit was within limitation and held that the Plaintiffs were entitled to deduct the period spent in contesting the second suit filed by Defendant Tara Chand. By excluding the period spent in this litigation, the suit was held to be within limitation. He thereafter decreed the suit. The Defendants filed an appeal which was dismissed by the learned Lower Appellate Court on two grounds firstly that the suit was within limitation and secondly that even if the limitation of 12 years is prescribed then the Plaintiffs were entitled to deduct the period spent in contesting the second suit filed by the Defendants in terms of Section 14(2) of the Limitation Act (hereinafter referred to as the Act).

As far as the second contention is concerned there is no doubt in my mind that both the Courts below have committed a legal error. The suit was instituted by Defendants and not by the Plaintiffs. There is nothing on record to show that the present Plaintiffs were restrained in the said suit from taking out legal proceedings and therefore they cannot take benefit of Section 14(2) of the Limitation Act, 1963.

However, that bring us to the very interesting question as to whether any period of limitation is prescribed for filing a suit, in case the mortgage is redeemed by one of the co-mortgagors and all the mortgagers are co-sharers or co-owners of the mortgaged land. In the present case both the sides derive title in the suit land from Suba Ram. There is no material on record to show that any partition took place till the decree of redemption was passed. The question which arises is whether the co-mortgagee who also happens to be a co-sharer redeems and holds the property for the benefit of all the co- sharers/comortgagors or only for his own benefit.

Learned Counsel for the parties have drawn my attention to various judgments. The first case relied upon by the Appellants is Valliamma Champaka Pillai Vs. Sivathanu Pillai and Others, . It would be pertinent to mention that in the said case two brothers M and S executed the mortgage in question. Before the Apex Court it was contended on behalf of the Plaintiff that they were members of a Joint Hindu Family and the mortgaged property was also joint Hindu family property and consequently the redemption by one of the co-mortgagors of the whole property would enure for the benefit of the entire joint family including the Plaintiffs. In the alternative, it was pleaded that even if it be presumed that after mortgage but before redemption the family had divided its status then also after redemption the two branches of the family would be deemed to hold the property as co-owner or tenants in common in defined shares. On this premise it was urged that the possession of one of the redeeming co-mortgagors would be possession on behalf of non-redeeming co-owners also.

It would be pertinent to mention that the Apex Court did not decide this question on the ground that the learned single Judge of the High Court had clearly found that the two branches of ''M'' and ''S'' were divided at all material times and these findings were no longer the subject of controversy. The Apex Court also found that when Letters Patent Appeal was heard by a Full Bench of the High Court both these pleas were not urged. The Apex Court held as follows:

For the aforesaid reasons we do not permit the Appellant to reagitate this plea which in any of its aspects was not pressed into argument in the courts below.

The Apex Court thereafter went on to hold that as far as co-mortgagors were concerned the limitation for filing a suit against the co-mortgagors who had redeemed the mortgaged property would either be the limitation originally prescribed for redemption of mortgage or a period of 12 years from the date when the co-owner redeemed the land.

On the aforesaid basis it is urged by Sh.N.K. Thakur that the limitation for redemption is 12 years in terms of Article 61 (b) of the Limitation Act, 1963. I am afraid that this contention cannot be accepted because the Apex court did not consider the question as to what would be the effect if the co-mortgagors also happened to be co-owners or co-sharers. As observed above the Apex court did not permit such plea to be raised before it.

The Apex Court in Ganeshi Lal Vs. Joti Pershad, , held as follows:

The redeeming co-mortgagor being only a surety for the other co-mortgagors, his right is, strictly speaking, a right of reimbursement or contribution, and in law, when we have regard to the principles of equity and justice, there should be no difference between a case where he discharges an unsecured debt and a case where he discharges a secured debt. It is unnecessary for us to decide in this appeal whether S. 92, T. P, Act, was intended to strike a departure from this position when it states that the co-mortgagor shall have the same rights as the mortgagor whose mortgage he redeems, and whether it was intended to abrogate the rule of equity as between co-debtor and provide for the enforcement of the liability on the basis of the amount due under the mortgage and this is because, as has been already stated, we are governed not by the statute but by general principles of equity and justice. If it is equitable that the redeeming co-mortgagor should be substituted in the mortgagee''s place, it is equally equitable that the other co-mortgagors should not be called upon to pay more than he paid in discharge of the encumbrance.

It would be pertinent to mention that the property which was subject matter of the dispute in Ganeshi Lal''s case (supra) was part of the erstwhile State of Punjab like in the present case. The provisions of the Transfer of Property Act were not applicable at the relevant time but the doctrine of subrogation which has also been enshrined in Section 92 of the Transfer of Property Act was recognized as an equitable doctrine. The result is that when one co-mortgagor redeems the entire land on payment of the mortgaged amount he is entitled in equity to insist that the co-mortgagors should pay their share of the amount of the redemption to him and only on payment of this share can he be asked to give possession of the land to the co-mortgagors. The redeeming co-mortgagors is only a surety for the other co-mortgagors and he has a right of reimbursement of his contribution. In Valliama''s case (supra) the Apex Court reiterated the said principle in the following terms:

...A redeeming co-mortgagor discharging the entire mortgage debt, which was the joint and several liability of himself and his co-mortgagor, was, in equity, entitled to be subrogated to the rights of the mortgagee redeemed and to treat the non-redeeming co-mortgagor as his mortgagor to the extent of the latter''s portion or share in the hypotheca and to hold that portion or share as security for the excess payment made by him. This equitable right of the redeeming co-mortgagor stems from the doctrine that he was a principal debtor in respect of his own share only. and his liability in respect his co-debtor''s share of the mortgage debt was only that of a surety and when the surety had discharged the entire mortgage debt, he was entitled to be subrogated to the securities held by the creditor, to the extent of getting himself reimbursed for the amount paid by him over and above his share to discharge the common mortgage debt....

...Firstly, to be subrogated to the rights of the mortgagee discharged, vis-a-vis the non-redeeming co-mortgagor, including the right to get into possession of the latter''s portion or share of the hypotheca. Secondly, to recover contribution towards the excess paid by him on the security of that portion or share of the hypotheca which belonged not to him but to the other co-mortgagor. It follows that where one co- mortgagor gets the right to contribution against the other co-mortgagor by paying off the entire mortgage debt, a correlated right also accrues to the latter to redeem his share of the property and get its possession on payment of his share of the liability to the former. This corresponding right of the ''non-redeeming'' co-mortgagor, to pay his share of the liability and get possession of his property from the redeeming co-mortgagor, subsists as long as the latter''s right to contribution subsists....

The Apex Court in Variavan Saraswathi and Another Vs. Eachampi Thevi and Others, again had the occasion to deal with a case concerning the rights of a co-mortgagor redeeming the mortgaged property. The Apex court negatived the contention that he steps into the shoe of the mortgagee. In the case before the Apex Court a mortgage was executed in the year 1870 with respect to Tarwad (akin to joint family) property. The property was mortgaged by the karta or Karnavan of the property. In the year 1886 two junior members of the Tarwad got the property redeemed and obtained possession of the same by paying the mortgaged money. They alone and thereafter their descendants alone continued to be in possession of the property. A suit was filed for partition of the land in the year 1967 i.e. 81 years after the redemption. The suit was contested on various grounds including the ground that the two members of the Tarwad and their heirs had acquired tenancy rights under the provisions of the Land Reforms Act. The Apex Court after making reference to various legal provisions and decisions held as follow:

Since the transfer in a mortgage is, only, of interest and not of the entire right and title, as takes place in sale, the mortgagor and the mortgagee can transfer or assign their interest. A mortgagor may assign or transfer the equity of redemption or may even create second mortgage. Similarly a mortgagee may assign his interest or create another mortgage. What happens when a mortgagee assigns his interest in favour of another person? Since an assignor can pass on interest that he has, the assignee becomes holder of the same interest that a mortgagee has. In other words, he steps into the shoes of the mortgagee. Can the same be said where a co-mortgagor or anyone on behalf of mortgagor authorised under law, pays the amount and brings to an end the interest the mortgagee had? Mortgage is creation of an interest in the property for payment of debt. Once the mortgage debt is discharged by a person beneficially interested in equity of redemption the mortgage comes to an end by operation of law. Consequently the relationship of mortgagor and mortgagee cannot subsist. What then is the status of a person paying off debt to secure the property either with consent of others or on own volition? In law he becomes the owner, entitled to hold and possess the property. But in equity the right is to hold the property till he is reimbursed.

After referring to the observations made in cases of Ganeshi Lal and Valliama Champaka Pillai (Supra), the learned Judges further interpreted the expression ''right as the mortgagee'' in the following words:

A plain reading of the section does not warrant a construction that the substitute becomes a mortgagee. The expression is, ''right as the mortgagee'' and not right of mortgagee. The legislative purpose was statutory recognition of the equitable right to hold the property till the co-mortgagor was reimbursed. And not to create relationship of mortgagor and mortgagee. The section confers certain rights on co-mortgagor and provides for the manner of its exercise as well. The rights are of redemption, foreclosure and sale. And the manner of exercise is as mortgagee. The word, ''as'' according to Black''s Law Dictionary means ''in the manner prescribed''. Thus a co-mortgagor in possession, of excess share redeemed by him, can enforce his claim against non-redeeming mortgagor by exercising rights of foreclosure or sale as is exercised by mortgagee u/s 67 of the Transfer of Property Act. But that does not make him mortgagee...

Two learned Judges of this Court in Rattan Singh alias Rattna v. Hirda Ram and Anr. 1994(2) S.L.J. 1553 and Gian Chand v. Sohan Singh and others, 1994(3) S.L.J. 2524, have held that once a mortgage is redeemed it comes to an end and thereafter the redeeming mortgagor has a right to claim his share of the mortgaged money from the co-mortgagors and the non-redeeming mortgagors have a right to claim possession/share of the land but only on payment of their share of the mortgaged amount.

The question in the present case is different. If the co-mortgagors are not co-sharers then the limitation of 12 years would apply but when the co mortgagors are co-sharers then in my humble opinion no limitation would be applicable. It is well settled law that the possession of one co-sharer enures for the benefit of all the co-sharers. Possession of one co-sharer is possession of all. Even those co-sharers were not in actual possession are deemed to be in possession.

In the present case, a perusal of para 10 of the plaint filed by the Defendants for redemption in which the present Plaintiffs were arrayed as Defendants 2&3 shows that even the redeeming co-mortgagor had clearly understood that he was filing the suit for the benefit of the non-redeeming co-mortgagors. He held the land as surety for payment of the amount. Since he was not only a co-mortgagor but also a co-sharer (as they were all direct descendents of the original mortgagor) he can neither claim adverse possession nor claim that his possession is exclusive and ousts the rights of the other co-sharers. Therefore, I am of the view that in such a case any co-sharer can apply for partition/his share in the property. Therefore, no period of limitation is prescribed for such a suit. Therefore the question framed is answered in favour of the PlaintiffRespondent.

In view of the above discussion the appeal is dismissed. No costs.