Madras High Court
Nachiyappan vs Periyakaruppan on 20 November, 2020
Author: S.S.Sundar
Bench: S.S.Sundar
Second Appeal(MD)No.520 of 2017
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated : 20.11.2020
CORAM :
THE HONOURABLE MR.JUSTICE S.S.SUNDAR
Second Appeal(MD)No.520 of 2017
and
C.M.P.(MD)No.11246 of 2017
Nachiyappan : Appellant/Respondent/Plaintiff
-Vs-
Periyakaruppan : Respondent/Appellant/Defendant
Prayer: Second Appeal filed under Section 100 of the Code of the Civil
Procedure, praying to set aside the decree and judgment in A.S.No.27 of
2015 on the file of the Subordinate Court, Devakottai, dated 14.09.2017 in
reversing the judgment and decree passed in O.S.No.124 of 2013 on the file
of District Munsif Court, Devakottai, dated 27.03.2015.
For Appellant : Mr.C.Jeyaprakash
For Respondent : Mr.R.Chandrasekar
: Mr.M.Vallinayagam
Senior Counsel and
Mr.J.Bharathan, Advocate
(Amicus curiae)
***
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Second Appeal(MD)No.520 of 2017
JUDGMENT
The plaintiff in the suit in O.S.No.124 of 2013 on the file of the District Munsif Court, Devakottai, is the appellant in this Second Appeal. The appellant filed the suit in O.S.No.124 of 2013 on the file of the District Munsif Court, Devakottai, for redemption of an usufructuary mortgage dated 03.06.1946 and for recovery of possession of the suit property.
2.The case of the appellant in the plaint is that the suit property measuring to an extent of 38 cents in Survey No.173/6 in Iravucheri Group in Devakottai Taluk, originally belonged to the great grand father of the plaintiff by name Murugan, son of Thiru.Nachaan and that the said Murugan and his son by name Thothan executed a othi deed dated 03.06.1946 in favour of the predecessor-in-interest of the defendant by name Meenakshi Ammal. It is further stated that five years period was stipulated in the said mortgage deed for redemption. It is also stated by the appellant that the appellant came to know about the details of the mortgage only on 06.06.2003. It is admitted even in the plaint that the appellant had filed a suit earlier in O.S.No.80 of 2003 before the District Court, Devakottai, for permanent injunction and that the said suit and further appeal preferred by 2/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 the appellant in A.S.No.29 of 2004 on the file of the Sub Court, Devakottai, were dismissed with liberty to the appellant to file a suit for redemption. It is also admitted in the plaint that the appellant thereafter filed another suit for declaration of title and for permanent injunction in O.S.No.89 of 2006 before the District Munsif Court, Devakottai, and the said suit was also dismissed by a judgment and decree dated 28.04.2011. It is further stated in the plaint that the mortgage created in 1946 was redeemed in the year 1955 and that there was an endorsement made in the original mortgage deed even in the year 1955. It is also stated that the endorsement was found to be invalid in the second suit filed by the appellant and that therefore, the present suit for redemption is filed.
3.The suit was contested by the respondent on several grounds. It is to be noted that in the written statement, the ownership of the property in favour of the plaintiff’s great grand father is admitted. Similarly, the creation of equitable mortgage by a document dated 03.06.1946 is also admitted. However, the further allegations in the plaint that the mortgage was redeemed and that there was an endorsement indicating discharge of the mortgage were seriously disputed. It was contended by the respondent that 3/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 the suit is barred by principles of res judicata and under Order 2, Rule 2 of C.P.C. It is further stated in the written statement that the suit for redemption is barred by limitation and that the plaintiff’s right to redeem by filing a suit has been lost by virtue of limitation.
4.The trial Court after framing necessary issues found that the suit is not barred by principles of res judicata or under Order 2, Rule 2 C.P.C. Further, on an erroneous interpretation of Section 30 of the Limitation Act, the trial Court held that the plaintiff/appellant has 66 years of time to redeem the mortgage. So saying, the trial Court decreed the suit by directing the respondent to hand over possession within three months from the date of judgment. Aggrieved by the judgment and decree of the trial Court in O.S.No.124 of 2013, the respondent preferred an appeal in A.S.No.27 of 2015 before the Sub Court, Devakottai. The lower appellate Court allowed the appeal and set aside the judgment and decree of the trial Court. The suit was dismissed by the lower appellate Court.
5.The lower appellate Court though held that the judgment and decree in the earlier suits will not operate as res judicata, concluded that the 4/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 suit is barred under Order 2, Rule 2 of C.P.C.
6.The lower appellate Court then observed that the mortgage deed as per the document Ex.A2 was redeemed by the ancestor of the plaintiff in the year 1955 on the basis of the observations made in the previous judgment in O.S.No.89 of 2006 marked as Ex.A11. Consequently, the lower appellate Court held that the suit for redemption of mortgage dated 03.06.1946 became infructuous as the mortgage was discharged even in the year 1955. However, the lower appellate Court observed that the mortgagor ought to have filed the suit for recovery of possession within 12 years from the year 1955 (when usufructuary mortgage was discharged). Since the mortgage had already been redeemed, the lower appellate Court specifically held that the period of limitation for the relief of recovery of possession is only 12 years and that the suit for recovery of possession ought to have been filed within 7 years from the year 1963. After holding that the suit filed by the appellant is hopelessly barred by limitation, the lower appellate Court further held that the judgment cited by the learned Counsel appearing for the appellant for the proposition that no period of limitation is prescribed for redemption of an usufructuary mortgage where 5/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 no time is prescribed for redemption cannot be applied. Aggrieved by the judgment and decree in A.S.No.27 of 2015, the above appeal has been preferred by the plaintiff.
7.Though several substantial questions of law have been raised in the memorandum of grounds, the learned Counsel appearing for the appellant focused the following substantial questions of law:
(a) Whether the lower appellate Court is right in holding that the suit by the appellant is barred under Order 2, Rule 2 of C.P.C., even though the cause of action and the relief sought for in the earlier suits is distinct and different?
(b) Whether the lower appellate Court is right in holding that the relief of redemption of mortgage became infructuous even though there was no pleading by the defendant that the mortgage had already been redeemed?
(c) Whether the lower appellate Court is right in holding that the suit for recovery of possession ought to have been filed within 12 years from 1955?
(d) Whether the suit filed by the plaintiff for redemption is barred by limitation?6/48
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8.The learned Counsel appearing for the appellant submitted that the earlier suit in O.S.No.80 of 2003 and O.S.No.89 of 2006 were filed for permanent injunction and for declaration of title and consequential injunction on entirely a different cause of action and that the suit for redemption cannot be held to be barred by Order 2, Rule 2 of C.P.C. Order 2, Rule 2 of C.P.C. provides that all relief arising out of same cause of action shall be sought for in one and the same suit and about the consequences which would follow, if the plaintiff omits to do so. It is true that the plaintiff who comes to Court for a relief of a particular cause of action, must include in his suit all claims pertaining to that cause of action. If the plaintiff gives up any portion of the claim without the leave of the Court, he cannot sue in respect of such claim in future on the same cause of action. To apply the principle of Order 2, Rule 2 of C.P.C., it must be established that the second suit is based on the same cause of action as in the earlier suit. The first suit filed by the appellant was for permanent injunction and the second suit was for declaration of title and permanent injunction. The appellant in the first suit denied the mortgage and claimed to be in possession of the property on the basis of the revenue records. The first suit was dismissed mainly on the ground that the usufructuary mortgage 7/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 created by the predecessor-in-interest of the plaintiff in favour of the predecessor-in-interest of the defendant is proved to be subsisting and that the respondent is continuously in possession as a mortgagee. In the second suit, once again the subsistence of mortgage created in the year 1946 was the main reason behind the dismissal of the suit for declaration of title and injunction. The contention of the appellant in the second suit that the earlier mortgage was redeemed was not accepted by the Court and that therefore, the appellant has filed the third suit for redemption of mortgage. Since the suit for redemption of mortgage is on the basis of the subsisting usufructuary mortgage, this Court is unable to agree with the lower appellate Court that the suit is barred by Order 2, Rule 2 of C.P.C.
9.The learned Counsel appearing for the respondent relied upon a judgment of the Hon’ble Supreme Court in the case of Kunjan Nair Sivaraman Nair vs. Narayanan Nair and others reported in 2004 (1) CTC
628. In the said judgment, the expression “cause of action” has been explained and it is pointed out that the expression “cause of action” in wider sense means necessary conditions for maintenance of suit including not only infraction of right but infraction coupled with right itself. It was further 8/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 observed that every fact which is necessary to be proved as distinguished from every piece of evidence which is necessary to prove each fact, comprises cause of action. The Hon’ble Supreme Court has held as follows:
“6.We shall first deal with the question regarding applicability of Order II Rule 2 of the Code. Said provision lays down the general principle that suit must include whole claim which the plaintiff is entitled to make in respect of a cause of action, and if he does not do so then he is visited with the consequences indicated therein. It provides that all reliefs arising out of the same cause of action shall be set out in one and the same suit, and further prescribes the consequences if the plaintiff omits to do so. In other words Order 2, Rule 2 centers round one and the same cause of action.
7.Order 2, Rule 2 with its sub rules and illustration reads as follows:
"2. Suit to include the whole claim. - (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
(2) Relinquishment of part of claim. - Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.
(3) Omission to sue for one of several reliefs. - A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.
Explanation. - For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action. Illustration A lets a house to B at a yearly rent of Rs.1200. The rent for the whole of the years 1905, 1906 and 1907 is due and 9/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 unpaid. A sues B in 1908 only for the rent due for 1906. A shall not afterwards sue B for the rent due for 1905 or 1907."
8.A mere look at the provisions shows that once the plaintiff comes to a court of law for getting any redress basing his case on an existing cause of action, he must include in his suit the whole claim pertaining to that cause of action. But if he gives up a part of the claim based on the said cause of action or omits to sue in connection with the same, then he cannot subsequently resurrect the said claim based on the same cause of action. So far as sub-rule (3) is concerned, before the second suit of the plaintiff can be held to be barred by the same, it must be shown that the second suit is based on the same cause of action on which the earlier suit was based and if the cause of action is the same in both the suits and if in the earlier suit plaintiff had not sued for any of the reliefs available to it on the basis of that cause of action, the reliefs which it had failed to press into service in that suit cannot be subsequently prayed for except with the leave of the court. It must, therefore, be shown by the defendants for supporting their plea of bar of Order II, Rule 2, sub- rule (3) that the second suit of the plaintiff filed is based on the same cause of action on which its earlier suit was based and that because it had not prayed for any relief and it had not obtained leave of the court in that connection, it cannot sue for that relief in the present second suit.”
10.The present suit filed by the plaintiff is for redemption of mortgage that was stated to have been created by the predecessor-in-interest of the plaintiff in favour of the predecessor-in-interest of the defendant in the year 1946. The two suits filed by the plaintiff earlier was on the basis that the plaintiff/appellant had title to the property and that he was in lawful possession of the suit property. The first suit filed by the plaintiff/appellant 10/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 was dismissed by holding that the respondent herein is in possession of the property as a mortgagee and that the only right available to the plaintiff/appellant is to file a suit for redemption. The second suit earlier was dismissed by holding that the mortgage was subsisting. In the second suit, the plaintiff wanted to prove that the mortgage was discharged. Hence, the present suit filed for redemption of mortgage which is on a different cause of action cannot be held to be barred by Order 2, Rule 2 of C.P.C.
11.The lower appellate Court gave a definite finding that the relief of redemption of mortgage became infructuous after holding that the mortgage had already been redeemed. The lower appellate Court then held that the suit ought to have been filed for recovery of possession within 12 years from the date when the mortgage was discharged. This Court is unable to agree with the finding of the lower appellate Court that the mortgage became infructuous and that the mortgage had already been redeemed. When the second suit was filed by the plaintiff/appellant, the trial Court observed that the mortgage money was paid as per the endorsement. However, the Court went further and held that the endorsement is not legally valid and binding on the parties. Therefore, it 11/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 cannot be assumed that the usufructuary mortgage was redeemed accepting the endorsement as a solid proof for redemption of mortgage. When the trial Court in O.S.No.89 of 2006 has negatived the contention of the plaintiff that the mortgage was already redeemed as per the endorsement, the lower appellate Court ought not to have held that the mortgage was already redeemed and that the prayer for redemption of mortgage became infructuous. Neither the plaintiff nor the defendant has pleaded in the present suit that the mortgage in 1946 was redeemed or discharged. As a matter of fact, the plaintiff has come forward to pay the mortgage money and prayed for redemption upon payment of the mortgage amount. Even in the written statement, it is not pleaded that the suit for redemption is not maintainable on any legally acceptable ground. The only contention raised by the defendant was that the suit is barred by Order 2, Rule 2 of C.P.C and by limitation. Since the lower appellate Court has held that the mortgage was discharged, it was further held that the suit must be one for recovery of possession and that it ought to have been filed within 12 years from the date of discharge of mortgage. Since this Court has specifically held that the mortgage is not yet discharged, there is no question of filing a suit for recovery of possession within a period of 12 years. Therefore, the findings 12/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 of the lower appellate Court that the suit should have been filed for recovery of possession within a period of 12 years is erroneous. In view of the conclusions reached above, the first three substantial questions of law are answered in favour of the plaintiff/appellant.
12.However, the important issue that arise for consideration in this second appeal is whether the suit for redemption is barred by law of limitation?
13.The learned Counsel appearing for the appellant relied upon a judgment of Hon’ble Supreme Court in the case of Singh Ram (D) Thr. L.Rs. v. Sheo Ram and others reported in 2014 (3) TLNJ 463 (Civil). The Hon’ble Supreme Court in the judgment relied upon by the appellant has held that there is no limitation for filing a suit for redemption in the case of usufructuary mortgage, where no time limit is fixed. It is to be noticed that the judgment of the Hon’ble Supreme Court relied upon by the learned Counsel appearing for the appellant is not applicable, as it is admitted in the present case that a period of five years has been fixed for redemption as per the mortgage deed dated 03.06.1946. However, the learned Counsels 13/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 appearing on either side made elaborate submissions by relying upon several judgments for and against the propositions expressed by the Hon’ble Supreme Court in Singh Ram’s case.
14.This Court, having regard to the importance of the legal issue, is inclined to consider the legal issue with reference to various judgments after inviting Mr.M.Vallinayagam, learned Senior Counsel and Mr.J.Bharathan, learned Advocate to assist the Court as amicus curiae. After hearing the submissions of the learned Senior Counsel assisting the Court and the Counsels appearing on either side, this Court is able to see some conflicting views. Though the legal issue can be ultimately settled by a Larger Bench of Hon’ble Supreme Court, this Court finds fit to discuss the subject with reference to several judgments of the Hon’ble Supreme Court and High Court with an open mind. In the case of C.Beepathumma and others vs. Velasari Shankaranarayana Kadambolithaya and others reported in AIR 1965 SC 241, the Hon’ble Supreme Court considered the question of limitation for redemption of usufructuary mortgage dated 26.04.1862 and for delivery of possession. In the case before the Hon’ble Supreme Court, the suit for redemption of usufructuary mortgage dated 14/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 26.04.1862 and for delivery of possession was filed on 20.04.1944. As per the mortgage deed which was marked as document Ex.P2, the mortgagees were entitled to remain in possession for 40 years till 1902. Since the suit was filed within 60 years (As per Article 148 of Limitation Act, 1908) the suit was held to be in time. Since the position that the mortgagor could not redeem the mortgage for 40 years from the date of mortgage, is admitted, the suit filed in 1944 was held to be within the period of limitation. From this judgment, it can be taken that where specific period is prescribed for redemption, limitation starts running from the date prescribed for redemption. However, this judgment does not lay down any law in favour of the appellant. Indirectly, it helps the respondent's argument that the suit for redemption is barred by limitation as the suit was not filed within the period of limitation prescribed even under the old Act.
15.However, in Panchanan Sharma v. Basudeo Prasad Jaganani and others reported in 1995 Supp (2) SCC 574, it has been held that in absence of stipulation in the mortgage deed regarding time for redemption, there is no limitation for redemption of usufructuary mortgage by the mortgagor.
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16.It was a case where the appellant before Hon'ble Supreme Court executed an usufructuary mortgage on 17.09.1911 for Rs.261/-. One of the terms in the mortgage deed was to the effect that the mortgagee should pay the land revenue. For non-payment of land revenue, the property was brought to sale and the property was purchased by one Ramtahal Singh (D11) on 03.08.1946 in the auction. The suit for redemption was decreed by trial Court. However, the appellate Court dismissed the suit on finding that the appellant had lost his title since the property was sold in auction and the purchaser became the owner of the property.
17.The question arose for consideration was whether the appellant had lost right of redemption because of the sale by auction for non-payment of land revenue by mortgagee. It was held by Hon'ble Supreme Court that by operation of Section 76 (c), the mortgagee is enjoined to pay land revenue to the Government and for default committed by the mortgagee, the mortgagor had not lost his right of redemption by the conduct and actions of the mortgagee.
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18.Though similar issue did not arise for consideration before Supreme Court, it was held as follows:
“If the deed gives time for redemption or adjustment of the rent or profits and liabilities in terms of the contract read with the relevant provisions of the Act stood discharged, the limitation for redemption would run from the date fixed in the mortgage deed. Otherwise, there is no limitation for redemption of usufructuary mortgage.”
19.Except considering the obligations of usufructuary mortgagee under Section 58(d) and 76 of Transfer of Property Act, with reference to the issue raised before Supreme Court, there is no discussion or analysis or consideration of relevant provisions of Limitation Act or the implication of Section 27 of Limitation Act or any other provisions of Transfer of Property Act to justify the conclusion. The decision on the question of limitation is neither warranted nor relevant in this case. Hence, this Court may not be justified to follow the extracted portion as an authoritative pronouncement on this issue.
20.In Prithi Nath Singh and others vs. Suraj Ahir and others reported in AIR 1963 SC 1041, the Hon'ble Supreme Court has held that by payment of mortgage money by mortgagor, usufructuary mortgage comes to an end and the mortgage cannot be said to exist so long as mortgagor's right 17/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 to ask mortgagee to perform acts mentioned in Section 60 continues. It has been held as follows:
“The mortgage as a transfer of an interest in immovable property for the purpose of securing payment of money advanced by way of loan must come to an end on payment of the mortgage money.” It has been further held that if the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgage in full discharge of the mortgage debt, a suit to enforce the return of mortgage deed and to get back possession of the mortgaged property cannot be a suit for redemption.
21.The Hon'ble Supreme Court followed a judgment of Allahabad High Court in Ramprasad v. Bishambhar Singh reported in AIR 1946 ALL 400 where the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. The Allahabad High Court in AIR 1946 ALL 400 has held as follows:
"Now, it is quite obvious that that section (s. 60 of the Transfer of Property Act) can only refer to a case in which a mortgagor under a 18/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 subsisting mortgage approaches the Court to establish his right to redeem and to have that redemption carried out by the process of the various declarations and orders of the Court by which it effects redemption. In other words. S. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of "his property on repayment of what is still due. Section 62, on the other hand, is in marked contract to S. 60. Section 62 says that in the case of an usufructuary mortgage the mortgagor has a right to 'recover possession' of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off.”
22.Another judgment of Allahabad High Court relied upon by Hon'ble Supreme Court was the judgment in Muhammad Mahmud Ali vs. Kalyan Das reported in ILR 18 All 198 wherein it was held that there can be nothing for enforcing the mortgage when the money had been paid up and therefore, the right to redeem ceases on payment of the mortgage money.
23.In the judgment of the Hon’ble Supreme Court in Singh Ram’s case, the Hon’ble Supreme Court mainly relied upon a judgment of Larger Bench of Hon’ble Supreme Court in the case of Seth Ganga Dhar vs. Shankar Lal and others reported in 1958 MLJ (SC) 150. In Seth Ganga Dhar’s case reported in 1958 MLJ (SC) 150 an usufructuary mortgage was created by a document dated 01.08.1899 for a sum of Rs.6,300/- out of which a sum of Rs.5,750/- was to discharge a prior 19/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 mortgage in respect of the mortgaged property and another property. As per the deed of mortgage, the mortgagors cannot redeem the property for a period of 85 years. After expiry of 85 years, the mortgagors should redeem within 6 months. If the property is not redeemed within six months, the mortgagors shall have no claim over the mortgaged property and the mortgagee shall have no claim to get the mortgage money and the deed of mortgage will be deemed to be a sale deed. It is also admitted in that case that the mortgagee redeemed the earlier mortgage and got possession. Similarly, the mortgagors also took possession of the other property as the mortgagee had discharged the prior mortgage in respect of the other property.
24.The appellant before the Hon’ble Supreme Court filed the suit for redemption. The respondent contested the suit on the ground that the suit is premature. The trial Court held that the provision postponing redemption for 85 years was invalid as it amounted to a clog on the equity of redemption and decreed the suit for redemption. However, on appeal, the Judicial Commissioner held that the clause in the mortgage deed postponing redemption for 85 years did not amount to clog on the equity of redemption. 20/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 Hence, the appeal was allowed and the suit was dismissed as the same was premature. The Hon’ble Supreme Court specifically held that the term in the mortgage deed to the effect that on failure of mortgagor to redeem the mortgage within the specified period, the mortgagor will have no claim over the property and the mortgage deed will be deemed to be a deed of sale is invalid and unsustainable. It was further held by the Hon’ble Supreme Court that the term providing 85 years for redemption does not take away the mortgagors’ right to redeem and it is not, therefore, a clog on the equity of redemption. It is in the said context, the Hon’ble Supreme Court observed that the right to redeem does not arise till the principal money becomes due. Since the parties have agreed that the right to redeem will arise 85 years after the mortgage it is held that the principal money will become due only after the expiry of 85 years. The Hon’ble Supreme Court though agreed that the Court has power to relieve a mortgagor from the effects of his bargaining if the mortgage is obtained by taking advantage of any difficulty or embarrassment, held further that the length of period postponing the right of redemption was not an oppressive term, disadvantageous to the mortgagor as the mortgagee had not taken any unfair advantage of his position as a lender. Hence, the appeal before the Hon’ble 21/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 Supreme Court was dismissed confirming the judgment of the lower appellate Court dismissing the suit on the ground that it is premature. Nowhere in the judgment, the Hon’ble Supreme Court has decided an issue or expressed any opinion regarding period of limitation. Except holding that the right to redeem does not arise till the principal money becomes due, the point which was argued by or considered by the Hon’ble Supreme Court is not one whether a suit for redemption can be entertained without any limitation if the mortgage is an usufructuary mortgage without specifying any time for redemption.
25.It is apposite to refer to the following paragraphs in the said judgment to understand the issue that arose for consideration before Hon'ble Supreme Court.
“It is admitted that the case is governed by the Transfer of Property Act. Under S. 60 of that Act, at any time after the principal money has become due, the mortgagor has a right on payment or tender of the mortgage money to require the mortgagee to reconvey the mortgage property to him. The right conferred by this section has been called the right to redeem and the appellant sought to enforce this right by his suit. Under this section, however, that right can be exercised only after the mortgage money has become due. In Bakhtawai- Begum v. HusainiKhanam (1), also the same view was expressed in these words:
"Ordinarily, and in the absence of a special condition entitling 22/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 the mortgagor to redeem during the term for which the mortgage is created, the right of redemption can only arise on the expiration of the specified period. " Now, in the present case the term of the mortgage is eighty- five years and there is no' stipulation entitling the mortgagor to redeem during that term. That term has not yet expired. The respondents, therefore, contend that the suit is premature and liable to be dismissed.” The appellant's answer to this contention is that the covenant creating the long term of eighty five years for the mortgage, taken along with the provision that the mortgagor must redeem within a period of six months thereafter or not at all and the other terms of the mortgage and also the circumstances of the case, is really a clog on the equity of redemption and is therefore invalid. He contends that, in the result the mortgage money had been due all along and the suit was not premature.”
26.In yet another judgment of the Hon’ble Supreme Court in Harbans vs. Om Prakash and others reported in (2006) 1 SCC 129, the Hon’ble Supreme Court had an occasion to consider the scope of limitation in a suit for redemption of usufrucutary mortgage where no time limit is prescribed for redemption. This is a case where the appellant before the Hon’ble Supreme Court filed a suit for declaration that the plaintiff had become the owner in possession of ½ share and defendants 2 and 3 have become owners in possession of balance on the ground of foreclosure since period of limitation had expired.
27.Suit was decreed by trial Court. However, first appellate 23/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 Court held that there was no period of limitation to redeem the usufructuary mortgage. Since the plaintiff and defendants 2 and 3 were in possession of the land in dispute a decree for injunction restraining first defendant from interfering with the peaceful possession of the plaintiff and defendants 2 and 3 except by due course of law was granted. The second appeal was also dismissed holding that there was no limitation for redemption of mortgage when no period is fixed for redemption.
28.It was contended by appellants before Supreme Court that right to redeem or recover possession starts from the date of mortgage and has to be exercised within 30 years, relying upon (1997) 10 SCC 172 (State of Punjab v. Ram Rekha). The Hon'ble Supreme Court though observed that State of Punjab can prima facie supports the stand of the appellant held that the decision rendered by a three – Judge Bench of Supreme Court in Ganga Dhar case reported in AIR 1958 SC 770 had dealt with the legal position deliberately and that the same lays down the correct position in law which is applicable. The Hon'ble Supreme Court has extracted several portions of statements under different heads from Mullah's Transfer of Property Act (9th Edn.). The details of the mortgage are not available from 24/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 the whole judgment. No independent discussion or statement of law with reference to any provision of Transfer of Property Act or limitation Act. The logical conclusion one can derive from the judgment is that the Hon'ble Supreme Court has held that the decision in State of Punjab case reported in (1997) 10 SCC 172 cannot be followed in view of the decision of Larger Bench in Ganga Dhar case reported in AIR 1958 SC 770.
29.The Hon'ble Supreme Court, in Prabhakaran and others vs. M.Azhagiri Pillai (dead) by L.Rs. And others, reported in AIR 2006 SC 1567, can be usefully referred to. In a case of usufructuary mortgage where no time limit is fixed for repayment of mortgage money, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of the mortgage. Paragraphs 10 and 11 of the judgment runs as follows:
“10. An usufructuary mortgage is a transfer by the owner (mortgagor) of an interest in an immovable property for securing the amount advanced/to be advanced by the creditor (mortgagee), under which possession of the property is delivered to the mortgagee with authority to retain such possession and enjoy the rents and profits therefrom, until the debt is paid (vide Section 58(d) of the Transfer of Property Act, 1882, for short 'T.P. Act'). The owner/mortgagor, who continues to hold the bundle of rights constituting ownership, minus the right to possession, has the right to recover possession of 25/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 the mortgaged property by paying the mortgage debt. The said right to recover possession (along with the right to receive back the documents relating to the mortgaged property and the right to obtain a deed of reconveyance/retransfer of the mortgaged property) is known as the right of redemption of the mortgagor and is statutorily recognized in section 60 of T.P. Act. Such right of redemption can be extinguished during the subsistence of the mortgage only by the act of parties or by decree of a court. This Court in Jayasingh D. Mhoprekar vs. Krishna B. Patil [1985 (4) SCC 162] observed :
"It is well-settled that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee who has entered into possession of the mortgaged property under a mortgage will have to give up possession of the property when the suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground. This flows from the legal principle which is applicable to all mortgages, namely, "Once a mortgage, always a mortgage"."
11. Article 148 of the Limitation Act, 1908 (referred to as 'old Act') provided a limitation of 60 years for a suit against a mortgagee, to redeem or to recover possession of immovable property mortgaged. The corresponding provision in the Limitation Act, 1963 ('new Act' or 'Limitation Act' for short), is Article 61(a) which provides that the period of limitation for a suit by a mortgagor to redeem or recover possession of the immovable property mortgaged is 30 years. The period of limitation begins to run when the right to redeem or to recover possession accrues. In the case of an usufructuary mortgage which does not fix any date for repayment of the mortgage money, but merely stipulates that the mortgagee is entitled to be in possession till redemption, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of the mortgage. Section 27 of the Limitation Act provides that "at the determination of the period hereby limited to any person for 26/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 instituting a suit for possession of any property, his right to such property shall be extinguished". This would mean that on the expiry of the period of limitation prescribed under the Act, the mortgagor would lose his right to redeem and the mortgagee would become entitled to continue in possession as the full owner.” However, the Hon'ble Supreme Court has further held that a deed of assignment of mortgage executed by the mortgagee will operate as an acknowledgement and that a fresh period of limitation will start from the deed of assignment for redemption of mortgage.
30.A Full Bench of Himachal Pradesh High Court in Bhandaru Ram (Deceased) through his L.R. Rattan Lal v. Sukh Ram and others reported in AIR 2012 Himachal Pradesh 1 (FB) held that in case of usufructuary mortgage where no period is prescribed, the mortgagor has every right to redeem or recover possession from the moment he execute the deed and that at the determination of the period of limitation to any person for instituting a suit for possession, his right to such property is extinguished. The Full Bench of Himachal Pradesh considered several precedents on settled principles and discussed the scope and applicability of several statutory provisions in the light of interpretation accepted by High Courts and Hon'ble Supreme Court particularly with reference to Sections 27/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 60 and 62 of Transfer of Property Act, Section 3 and 27 of Limitation Act. The question posed for reference before the Full Bench is whether any period of limitation is prescribed for filing a suit for possession of immovable property by redemption of an usufructuary mortgage which does not fix any time for repayment of mortgage money?
31.After referring to the propositions and provisions under Section 60 of the Transfer of Property Act, Article 61 of Schedule to the Limitation Act and several judgments including the judgment of the Hon’ble Supreme Court reported in 1958 MLJ (SC) 150 in Seth Ganga Dhar v. Shankar Lal and others, the Full Bench of the Himachal Pradesh has held as follows:
“21.Sampuran Singh and others v. Niranjan Kaur and others, reported in AIR 1999 SC 1047, is a case directly on the point as to what is the starting point of period of limitation in an usufructuary mortgage which has not fixed a period in the deed but when there is an acknowledgment by way of assignment during the subsistence of the original mortgage. The mortgage in that case was executed in the year 1893 and in 1960, the original mortgagee sold his right by a registered deed to a third party. The suit for redemption was filed in the year 1980. The defendants, the assignees took up the defence that the suit was barred by limitation, among other defences. While holding on facts that the time would run for the mortgagor from the date of accrual of his right to redeem the mortgage, it was held as follows :--
“12. Learned counsel also referred to the language of Article 28/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 61(a) of part V of the Schedule to the Limitation Act, which is quoted hereunder :
61. By a mortgagor--
13. It is not in dispute at the relevant time period of limitation under this was 60 years and not 30 years
14. Submission was as aforesaid, right to redeem only accrue when either mortgagors tender the amount of mortgage or the mortgagees communicate satisfaction of the mortgage amount through the usufruct from the land. This submission is misconceived, as aforesaid, if this interpretation is accepted, then till this happens the period of limitation never start running and it could go on for an infinite period. We have no hesitation to reject this submission. The language recorded above makes it clear that right of redemption accrues from the very first day unless restricted under the mortgage deed. When there is no restriction mortgagors have a right to redeem the mortgage from that very date when the mortgage was executed.
Right accruing means, right either existing or coming into play thereafter. Where no period in the mortgage is specified, there exist a right to a mortgagor to redeem the mortgage by paying the amount that very day in case he receives the desired money for which he has mortgaged his land or any day thereafter. This right could only be restricted through law or in terms of a valid mortgage deed. There is no such restriction shown or pointed out. Hence, in our considered opinion the period of limitation would start from the very date the valid mortgage is said to have been executed hence the period of limitation of 60 years would start from the very date of oral mortgage that would be from March. 1893.”
22. Prabhakaran and others v. M. Azhagiri Pillai (dead) by Lrs. and others reported in AIR 2006 SC 1567, (already referred at the beginning) again is a case directly on the point: the only difference is that in this case it was held by the Apex Court that the acknowledgment having been made with the intention of admitting the jural relationship, the period of limitation would start from that date. In other words, in the peculiar facts of the case, it was held that the acknowledgment had the effect of extension of limitation under Section 18 of the Limitation Act. The principle on 29/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 limitation has been clearly explained and dealt with at paragraph 11, which reads as follows :--
“11. Article 148 of the Limitation Act, 1908 (referred to as 'old Act') provided a limitation of 60 years for a suit against a mortgagee, to redeem or to recover possession of immovable property mortgaged. The corresponding provision in the Limitation Act, 1963 ('new Act' or 'Limitation Act' for short), is Article 61(a) which provides that the period of limitation for a suit by a mortgagor to redeem or recover possession of the immovable property mortgaged is 30 years The period of limitation begins to run when the right to redeem or to recover possession accrues. In the case of an usufructuary mortgage which does not fix any date for repayment of the mortgage money, but merely stipulates that the mortgagee is entitled to be in possession till redemption, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of the mortgage. Section 27 of the Limitation Act provides that "at the determination of the period hereby limited to any person for instituting a suit for possession of any property his right to such property shall be extinguished". This would mean that on the expiry of the period of limitation prescribed under the Act, the mortgagor would lose his right to redeem and the mortgagee would become entitled to continue in possession as the full owner.”
23. Having thus dealt with two direct decisions on the point dealing with the issue on the first principle of law of limitation, we shall also refer to two decisions of the Apex Court, which have taken a contrary view. At the outset, it has to be noted that both the decisions have not analyzed or dealt with the question in the history and background of principles of law of limitation. Panchanan Sharma v. Basudeo Prasad Jaganani and others, reported in AIR 1995 SC 1743, is a case wherein the mortgagee was bound to pay the land revenue in respect of the mortgaged property and on his default, the same was sold in auction. It was held by a two Judges Bench that the mortgagor has not lost his right of redemption by the conduct and action of the mortgagee, to quote:
30/48
http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 “...If the deed gives time for redemption or adjustment of the rent or profits and liabilities in terms of the contract read with the relevant provisions of the Act stood discharged, the limitation for redemption would run from the date fixed in the mortgage deed. Otherwise, there is no limitation for redemption of usufructuary mortgage. The usufructuary mortgagor does not lose his title to the property or right to redemption by lapse of time. By operation of the last para of S. 76, the mortgagor is entitled to the accounting of the loss occasioned to it. At best the auction-purchaser, on redemption, would look to the mortgagee who had committed default in terms of the mortgage and the Court would give suitable direction in that behalf. The possession of the purchaser must be on behalf of the mortgagee and becomes liable to accounting etc...”
24. In that case neither was there any reference as to the defence of limitation or was there any contention at any stage or was the ground of limitation raised by any party. It has to be specifically seen from the facts that the suit was one instituted within the period of limitation of 60 years (usufructuary mortgage was dated 10-7-1911, the revenue sale was on 3-8-1946 and the first appeal number is No. 8 of 1971). Therefore, necessarily, the suit would have been the one instituted within 60 years, as per the permissible period of 60 years under Article 148 of Limitation Act, 1908.
25. Harbans v. Om Prakash and others, is yet another decision by a two Judges Coram of the Apex Court, reported in AIR 2006 SC 686. Referring to Ganga Dhar v. Shankar Lal and others (AIR 1958 SC
770), which we have referred to above while dealing with the principle on clog on redemption in contra-distinction to law of limitation, and also referring to the principle 'once a mortgage always a mortgage', it was held that the suit was not barred by limitation. Reference to Ganga Dhar's decision is made at paragraph 7 of the judgment to hold that a mortgage shall always be redeemable and that mortgagor's right to redeem shall neither be taken away nor be limited by any contract between the parties. As we have already held above, the right of redemption cannot be taken away by a contract between the parties creating a clog on equity of redemption. A mortgage is always redeemable, subject, of course, as held by the 31/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 Constitution Bench in Murari Lal's case (supra), to the law of limitation. The principle that 'once a mortgage always a mortgage' only means that any subsequent events or transactions in respect of the mortgage do not change the essential characteristics of the original conveyance as mortgage. Therefore, it is now well settled that once a mortgage, it is always a mortgage and nothing but a mortgage and hence despite any intervening transactions like lease, assignment etc., the original mortgagor has always a right to redeem the mortgage, subject only to the law of limitation. It is also to be seen that at paragraph 10 of the said judgment, commentary in Mulla's Transfer of property Act has also been discussed and according to the author of the text book also, to quote:
“.....The right of redemption is an incident of a subsisting mortgage and subsists so lone as the mortgage itself subsists. It can be extinguished as provided in the section and when it is alleged to be extinguished by a decree, the decree should run strictly in accordance with the forum prescribed for the purpose. Dismissal of an earlier suit for redemption whether as abated or as withdrawn or in default would not be barred (sic. debar) the mortgagor from filing a second suit for redemption so long as the mortgage subsists and the right of redemption is not extinguished by the efflux of time or by a decree of the Court in the prescribed form. .........
The Supreme Court has held that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of the right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee in possession of the property will have to deliver possession to the mortgagor when a suit of redemption is filed unless he is able to show that the right of redemption has come to an end or that a suit is liable to be dismissed on some other valid ground. The mortgagor's right of redemption is exercised by the payment or tender to the mortgagee at the proper time and the proper place, of the mortgage money. When it is extinguished by the act of parties, the act must take the shape and observe the formalities which the law prescribes. The expression 'act of the parties' refers to 32/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 some transaction subsequent to the mortgage and standing apart from the mortgage transaction. an usufructuary mortgagee cannot by mere assertion of his own or by a unilateral action on his part, convert his position on moiety of the property as mortgagee into that of an absolute owner...” Though the decision in State of Punjab and others v. Ram Rakha and others, reported in AIR 1997 SC 2151, was canvassed to the contra position, there is no detailed discussion on the issue. However, it is significant to note that the said decision in Ram Rakha's case (supra) has also not dealt with the principle in law, though it has been held that after 60 years, the mortgage has become irredeemable and consequently, the mortgagee has become the owner of the property, in a suit filed to that effect. However, it is crucially relevant that the direct ruling in Sampuran Singh's case (supra) decided in the year 1999 on the point and the decision of the Constitution Bench in Murari Lal's case (supra) rendered in the year 1965 regarding the application of law of limitation on the redemption of mortgage had not been brought to the notice of the Court in this case and of course, Prabhakaran's case (supra) again a direct ruling on the point, was not available to the Court, being rendered later in point of time. In this context, we may also refer to another decision of the Apex Court relevant to the context in Jayasingh Dnyanu Mhoprekar and another v. Krishna Babaji Patil and another, reported in (1985) 4 SCC 162 : (AIR 1985 SC 1646), wherein at paragraph 6 it has been held as follows :-
“...It is well-settled that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage. A mortgagee who has entered into possession of the mortgaged property under a mortgage will have to give up possession of the property when the suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground. This flaws from the legal principle which is applicable 33/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 to all mortgages, namely "Once a mortgage, always a mortgage.
26. Now we shall deal with the Full Bench decision of the Punjab & Haryana High Court in Ram Kishan & others v. Sheo Ram & others, reported in AIR 2008 P&H 77. The Court has extensively dealt with the various legal aspects of the issue and some of the decisions referred to above. The baseline principles are available at paragraph 16 of the judgment which reads as follows:--
“...It is thus evident that very conception of mortgage involves three principles. First, there is the maxim: Once a mortgage, always a mortgage' that is to say, a mortgage is always redeemable and if a contrary provision is made, it is invalid. And this is an exception to the aphorism, modus et convention vincunt legem (custom and agreement overrule law). Secondly, the mortgagee cannot reserve to himself any collateral advantage outside the mortgage agreement. Thirdly, as a corollary from the first another principle may be deduced, namely, "once a mortgage, always a mortgage, and nothing but a mortgage'. In other words, any stipulation which prevents a mortgagor from getting back the property mortgaged is void. That is, a mortgage is always redeemable.”
27. We have no dispute with the principles as stated above. As we have already held above, there cannot be a provision in the mortgage deed which makes the mortgage irredeemable and that the mortgagee cannot have any collateral advantage outside the mortgage agreement and still further, once a mortgage it is always a mortgage and nothing but a mortgage. But the mortgage being a mode of transfer of property, it is subject to Section 60 of the Transfer of Property Act and in the case of usufructuary mortgage, Section 62 of the Act and it is governed by the prescribed period of limitation for instituting a suit for recovery or redemption and foreclosure of a mortgage. A provision in a mortgage making it irredeemable is certainly antithetic to the principle of once a mortgage always a mortgage and nothing but a mortgage and hence redeemable as a mortgage. But a mortgage is a transfer of property and can be only made in terms of the Transfer of Property Act, 1882 and recovery and redemption and foreclosure of the transfer thus made as per the mortgage is subject 34/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 to the law of limitation.
28. Originally, there was no limitation for redemption or recovery of possession of a mortgaged property. The concept of limitation was introduced for the first time only in the year 1859. These crucial aspects, unfortunately, have missed the notice of the Punjab and Haryana High Court in Ram Kishan's case (supra).
29. All that apart, we respectfully disagree with the stand of the Full Bench of the Punjab and Haryana High Court with respect to the approach in distinguishing the two direct rulings of the Apex Court in Sampuran Singh's case and Prabhakaran's case (supra). The Full Bench at paragraphs 41 & 42 has taken the view as follows:
“41. In Sampuran Singh's case (supra), the primary question revolved around acknowledgment of the mortgage. Although the said judgment supports the argument raised by learned counsel for the mortgagee but the judgment of the larger Bench including that of Seth Ganga Dhar's case (supra) were not noticed. The said judgment is on the lines of another judgment of Hon'ble Supreme Court in Ram Rakha's case (supra) which was noticed in Harbans's case (supra) and it was held that the said decision does not lay down correct position in law.
42. In Prabhakaran's case (supra), the primary question again was in respect of acknowledgment. Though in Para No. 13 of the judgment it has been observed that in case of an usufructuary mortgage which does not fix any date for repayment of the mortgage money, the right to redeem would accrue immediately on execution of the mortgage deed. But said observation is obiter inasmuch as Hon'ble Supreme Court has allowed the appeal of the mortgagor for redemption while holding that there is acknowledgment. Therefore, the said judgment provides little assistance to the mortgagees.”
30. With great respect, as far as Sampuran Singh's case is concerned (Sampuran Singh and others v. Niranjan Kaur and others, reported in AIR 1999 SC 1047), we are not persuaded and we cannot accept the view taken by the Punjab and Haryana High Court. For one thing it has to be noted that Ram Rakha's case (State of Punjab and others v. Ram Rakha 35/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 and others, AIR 1997 SC 2151), was not even referred to in Sampuran Singh's case and as we have already noted above, it is a case directly dealing with the issue of limitation in the matter of redemption or recovery of possession of an usufructuary mortgage whereas Ganga Dhar v.
Shankar and others, reported in AIR 1958 SC 770, is not on the point of limitation but on clog on the equity of redemption. Limitation was not even an issue in that case. As far as Prabhakaran's case (AIR 2006 SC 1567) is concerned, again with great respect, the point that the right to redeem would accrue immediately on the execution of the mortgage deed settled in that decision is not an obiter but the ratio in that decision. A simple test to distinguish between ratio decidendi and obiter dicta in a judgment is, just take away the ratio and if the decision does not stand, it is nothing but the ratio in the case. In case of obiter dicta, even if the same is just taken away from the judgment, the decision would still stand. As far as the Prabhakaran's case is concerned, the whole decision is based on the question of limitation as to what is the date on which the limitation starts to run. The position under law with reference to the provisions under the Transfer of Property Act and the Limitation Act have been directly dealt with in the above mentioned two decisions in (Sampuran Singh and others v. Niranjan Kaur and others, AIR 1999 SC 1047) and Prabhakaran and others v. M. Azhagiri Pillai (dead) by Lrs. and others, reported in AIR 2006 SC 1567. The Constitution. Bench decision in Murarilal (since deceased through his Lrs. Umedi Lal & Ors. v. Devkaran (since deceased through his Lrs. Jagan Prasad & Ors. ), also has not been, with great respect, appreciated from the point of view of the law of limitation, by the Full Bench of the Punjab and Haryana High Court.
31. In this context, we may refer to a decision of the Apex Court on ratio decidendi in Union of India and others v. Dhanwanti Devi and others, reported in (1996) 6 SCC 44 : (1996 AIR SCW 4020), wherein it has been held as follows :
“It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basis postulates - (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal 36/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generally of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observation found therein. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent. The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of 'the judgment in relation to the subject-matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution. A deliberate judicial decision arrived at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent no matter for what reason, and the precedent by long recognition may mature into rule of stare decisis. It is the rule deductible from the application of law to the facts and circumstances of the case which constitutes its ratio decidendi.”
32. Yet another binding guidance by the Apex Court in this context is in Oriental Insurance Co. Ltd. v. Meena Variyal, reported in (2007) 5 SCC 428 : (AIR 2007 SC 1609), wherein it has been held at paragraph 26 as follows :
“...An obiter dictum of this Court may be binding only on the High Courts in the absence of a direct pronouncement on that question elsewhere by this Court. But as far as this Court is concerned, though not binding, it does have clear persuasive authority ...”
33. As far as the principle of limitation for recovery of possession or redemption of a mortgage is concerned, the direct pronouncements on the 37/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 question are available in three decisions :
(1) Murarilal (since deceased through his Lrs. Umedi Lal & Ors. ) v.
Devkaran (since deceased through his Lrs. Jagan Prasad & Ors. ), AIR 1965 SC 225; (2) Sampuran Singh and others v. Niranjan Kaur and others, AIR 1999 SC 1047 and (3) Prabhakaran and others v. M. Azhagiri Pillai (dead) by LRs and others, reported in AIR 2006 SC 1567. Panchanan Sharma v. Basudeo Prasad Jaganani and others, reported in AIR 1995 SC 1743 and Harbans v. Om Prakash and others, AIR 2006 SC 686, (Coram in both cases in two only) have not dealt with the issue in the history and background of the Transfer of Property Act and the Limitation Act on the issue. Therefore, once the binding principle is available in a direct pronouncement on the question in a decision of the Apex Court, it is that principle which is to be followed as a precedent. The decisions which have not directly dealt with the questions are to be distinguished as obiter.
34. Having dealt with the decisions of the Apex Court, we may also seek assistance on the principles as enunciated in the basic textbook - Salmond on Jurisprudence, Twelfth edition as edited by P. J. Fitzgerald, dealing with circumstances disturbing or weakening the binding force of precedent (Twelfth Edition, Chapter 5, page 151). Having referred to various English decisions, it is stated thus :
“(5) Inconsistency between earlier decisions of the same rank. A court is not bound by its own previous decisions that are in conflict with one another. This rule has been laid down in the Court of Appeal, Court of Criminal Appeal and Divisional Court, and it obviously applies also to the House of Lords. There may at first sight seem to be a difficulty here: how can a situation of conflict occur, if the court is bound by its own decisions? At least two answers may he given. First, the conflicting decisions may come from a time before the binding force of precedent was recognized. Secondly, and more commonly, the conflict may have arisen through inadvertence, because the earlier case was not cited in the later. Owing to the vast number of precedents, and the heterogeneous ways in which they are reported or are not reported it is only too easy for counsel to miss a relevant authority. Whenever a relevant prior decision is not cited before the Court, or mentioned in the judgments, it must be assumed 38/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 that the Court acts in ignorance or forgetfulness of it. If the new decision is in conflict with the old, it is given per incuriam and is not binding on a later Court.
Although the later Court is not bound by the decision so given per incuriam, this does not mean that it is bound by the first case. Perhaps in strict logic the first case should be binding, since it should never have been departed from, and was only departed from per incuriam. However, this is not the rule. The rule is that where there are previous inconsistent decisions of its own, the Court is free to follow either. It can follow the earlier, but equally, if it thinks fit, it can-follow the later. This rule has been laid down for the Court of Appeal, and it is submitted that it applies also to other Courts. It will be seen, therefore, that this exception to the binding force of precedent belongs both to the category of abrogation by subsequent facts and to the category of what is here called inherent vice. The earlier case can be disregarded because of the subsequent inconsistent decision on the same level of authority and the later case can be disregarded because of its inherent vice of ignoring the earlier case .
Where authorities of equal standing are irreconcilably in conflict a lower Court has the same freedom to pick and choose between them as the schizophrenic Court itself. The lower Court may refuse to follow the later decision on the ground that it was arrived at per incuriam. or it may follow such decision on the ground that it is the latest authority. Which of these two courses the Court adopts depends, or should depend, upon its own view of what the law ought to be. However, it takes a somewhat bold Judge to disregard a precedent handed down by a Court of higher standing on the ground that the decision was per incuriam.”
35. For all the above reasons, with great respect, we are unable to be persuaded by the Full Bench Decision of the Punjab & Haryana High Court in Ram Kishan & Ors. v. Sheo Ram & Ors. , reported in AIR 2008 P&H 77. To conclude, the Division Bench decision of this Court in Jaimal & others v. State of H. P. & others, AIR 2010 HP 7, the un-reported decisions in RSA No. 378 of 2008 titled Prakash Chand and others v. Amar Singh and another, (reported in AIR 2011 HP 21), and Tula Ram & another v. Shanti RSA No. 271 of 2002, which have taken the view that 39/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 there is no period of limitation for filing a suit for redemption or recovery of possession of usufructuary mortgage which has not fixed any time for repayment of mortgaged money do not reflect the correct position of law and hence they are overruled. Reference is answered as follows:
“The period of limitation for filing a suit for recovery of possession of immovable property or redemption of usufructuary mortgages which have not fixed any time for repayment of mortgage money is 30 years as prescribed under Article 61 to the Schedule to the Limitation Act, 1963 (60 years under Article 148 as per Indian Limitation Act, 1908).”
32.However, the statement of law of the Hon’ble Supreme Court found in Singh Ram’s case reported in 2014 TLNJ 463 is quiet contrary to the view expressed by the Hon’ble Supreme Court in several other judgments, particularly, the judgment in State of Punjab and others v.
Ram Rakha and others, reported in AIR 1997 SC 2151 and the judgment of the Hon'ble Supreme Court in Sampuran Singh and others v. Niranjan Kaur and others reported in AIR 1999 SC 1047 and in the case of Prabhakaran and others v. M.Azhagiri Pillai (Dead) by L.Rs. and others reported in AIR 2006 SC 1567.
33.The legal implication of Section 3 and Section 27 of Limitation Act has been considered in several precedents. In Punjab 40/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 National Bank and others v. Surendra Prasad Sinha reported in 1993 Supp (1) SCC 499 it has been held as follows:
“The rules of limitation are not meant to destroy the rights of the parties. Section 3 of the Limitation Act 36 of 1963, for short "the Act" only bars the remedy, but does not destroy the right which the remedy relates to. The right to the debt continues to exist notwithstanding the remedy is barred by the limitation. Only exception in which the remedy also becomes barred by limitation is that right itself is destroyed. For example under S.27 of the Act a suit for possession of any property becoming barred by limitation, the right to property itself is destroyed. Except in such cases which are specially provided under the right to which remedy relates in other case the right subsists. Though the right to enforce the debt by judicial process is barred under s.3 read with the relevant Article in the schedule, the right to debt remains. The time barred debt does not cease to exist by reasons of s.3. That right can be exercised in any other manner than by means of a suit. The debt is not extinguished, but the remedy to enforce the liability is destroyed. What s.3 refers is only to the remedy but not to the right of the creditors. Such debt continues to subsists so long as it is not paid. It is not obligatory to file a suit to recover the debt. It is settled law that the creditor would be entitled to adjust, from the payment of a sum by a debtor, towards the time barred debt. It is also equally settled law that the creditor when he is in possession of an adequate security, the debt due could be adjusted from the security in his possession and custody.”
34.Section 27 of the Limitation Act reads as follows:
“27. Extinguishment of right to property.—At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished."
Article 61(a) of Schedule to the Limitation Act, 1963 prescribe the period of limitation for any mortgage to redeem or recover possession of immovable property and the period of limitation is thirty years from the date 41/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 on which the right to redeem or to recover possession accrues. If Section 60 of the Transfer of Property Act is interpreted to mean that the right to redeem the mortgage accrues only on payment of or by tendering the mortgage money, that will lead to several anomalies and there will be no limitation, irrespective of position whether time for redemption is specified or not.
35.It is to be noted that originally no time limit was prescribed under the law of limitation either for redemption or for foreclosure of the mortgage. A time limit of 60 years was prescribed in the year 1859 by Act No.XIV of 1859. The period of 60 years was repealed under Act 15 of 1877 and then under the Indian Limitation Act, 1908. However, the period of limitation is reduced to 30 years both for redemption or for recovery of possession and for foreclosure of usufructuary mortgage in the Indian Limitation Act, 1963. Article 61 of 1963 Act provides that the time would begin to run when the right to redeem or to recover possession accrues. It is to be noted that Section 60 of the Transfer of Property Act was amended in the year 1929 and the word “payable” was substituted by “due”. Prior to 1929, the right of mortgagor to redeem the mortgage was available only 42/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 after the principal amount became payable. After the amendment in 1929, the mortgagor has right to redeem the mortgage or recovery of possession after the money has become due. Article 61 of the Limitation Act provides that the time would start running for the mortgagor when the right to redeem or to recover the possession accrues. Reading Article 61 of the Schedule to the Limitation Act with Section 60 of the Transfer of Property Act, a mortgagor has to institute a suit for redemption or recovery of possession within 30 years of mortgage, since his right to redeem or recover possession accrues to him the moment the parties enter into the jural relationship of mortgagor or mortgagee. Considering the scope of Section 3 and Section 27 of the Limitation Act and the plain language employed in Section 60 of the Transfer of Property Act and Article 61 of the Schedule to the Limitation Act, this Court is of the view that the view expressed by the Hon’ble Supreme Court in Singh Ram’s case reported in 2014 (3) TLNJ 463 appears to be contrary to the judgment of the Hon’ble Supreme Court in several other judgments and the principles reiterated by the Hon’ble Supreme Court in different contexts while interpreting the provisions particularly Article 61, Sections 3 and 27 of Limitation Act and Section 60 of Transfer of Property Act. This Court hope that the judgment of the 43/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 Supreme Court in Singh Ram’s case will be reconsidered in an appropriate case by a Larger Bench of the Hon’ble Supreme Court.
36.Though this Court has gone beyond the scope of this litigation, having regard to the importance of the legal issue and the conflicting judgments, this Court has no hesitation to hold that the suit is hopelessly barred by limitation in this case. This Court has to necessarily hold that the judgment of the Hon’ble Supreme Court in Singh Ram’s case is not applicable to the present case as a period of five years is prescribed for redemption in the present case and it is admitted by both parties in the pleadings. As per the mortgage deed dated 03.06.1946, the period for redemption expires in the year 1951. The cause of action for redemption arose in the year 1951. As per the Limitation Act, 1908, the limitation for redemption of mortgage is 60 years. As per the Limitation Act, 1963, the period of limitation is 30 years. As per Article 61 of the schedule to the Limitation Act, 1963, since the mortgage is prior to the commencement of Limitation Act, 1963, the period of limitation has to be worked out having regard to Section 30 of the Limitation Act, 1963. As per Section 30 of the Limitation Act, 1963, the suit has to be filed within seven years from the 44/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 date of commencement of 1963 Act or as per the old Limitation Act, 1908 whichever is earlier, provided if the seven years period expires earlier than the period under the 1908 Act and the said period of seven years together with so much of the period of limitation in respect of such suit under the Indian Limitation Act, 1908 as has already expired before the commencement of this Act is shorter than the period prescribed under the Limitation Act, 1963, then the suit may be instituted within the period of limitation prescribed under the Limitation Act, 1963. In the present case, 12 years had gone under the old Act before the commencement of 1963 Act. Adding seven years, the total number of years (19) is shorter than the period fixed under the Limitation Act, 1963. Hence, the appellant has to institute the suit for redemption within 30 years from 1951. Therefore, the suit filed in the year 2013 is hopelessly barred by limitation. Though the trial Court has applied different provisions of the Limitation Act, the decision of the Lower Appellate Court dismissing the suit on the ground of limitation is sustained not for the reasons stated by the lower appellate Court but for the reasons stated in this judgment.
37.As a result, there is no scope for giving any relief to the 45/48 http://www.judis.nic.in Second Appeal(MD)No.520 of 2017 appellant in the suit. Though the first three substantial questions of law are answered in favour of the appellant, the last question of law has to be answered against the plaintiff/appellant and this Court has no other option but to dismiss the Second Appeal.
38.Accordingly, the judgment and decree in A.S.No.27 of 2015 on the file of the Sub Court, Devakottai, dated 14.09.2017 reversing the judgment and decree in O.S.No.124 of 2013 on the file of the District Munsif Court, Devakottai, dated 27.03.2015 is confirmed. The suit in O.S.No.124 of 2013 on the file of the District Munsif Court, Devakottai, stands dismissed. However, no order as to costs. Consequently, the connected miscellaneous petition is closed.
Index : Yes/No 20.11.2020
SRM
46/48
http://www.judis.nic.in
Second Appeal(MD)No.520 of 2017
To
1.The Subordinate Court, Devakottai.
2.The District Munsif Court, Devakottai.
3.The Section Officer,
Vernacular Records,
Madurai Bench of Madras High Court,
Madurai.
47/48
http://www.judis.nic.in
Second Appeal(MD)No.520 of 2017
S.S.SUNDAR, J.
SRM
Judgment made in
Second Appeal(MD)No.520 of 2017
20.11.2020
48/48
http://www.judis.nic.in