Madan Lal v. Ram Narain — 1969 DIGILAW 8 (RAJ)

JAGAT NARAYAN, J.—This is a revision application by Madanlal, defendant, against an order of the trial court deciding one of the issues in the suit brought against him by Ram Narain and Ram Chandra plaintiffs and holding that the suit is within limitation. 2. The facts are these. Madan Lal, Parasmal Prakash Chandra were the owners of a plot of land which was surrounded by a boundary wall. Parasmal and Prakash Chandra mortgaged it in favour of Ram Narain and Ram Chandra plaintiffs under a mortgage deed dated 17.10.50 for a sum of Rs. 3,000/-. It was recited in the deed that possession had been transferred to the mortgagees, that the mortgagors will pay interest on the sum of Rs. 3,000/- at annas -/10/- per month monthly, that the property will remain in possession of the mortgagees till the principal amount and interest is paid and that if the whole of the amount due in favour of the mortgagees cannot be recovered by the sale of the mortgaged property the mortgagees will be entitled to recover the balance by the sale of other properties of the mortgagors. The case of the plaintiffs in the plaint is that on the date of the mortgage possession was transferred to them and they continued in possession till they were dispossessed by the Municipal Board of Nagaur on 3.9.54. A childrens park was constructed on the plot by the Municipal Board. The mortgagors as well as Madan Lal filed an application to the Collector for compensation on 9-9-58. Then notices were issued under Secs. 4, 6 and 9 of the Land Acquisition Act and an award was made by the Collector on 10.8.64 awarding a sum of Rs. 22,984/- in favour of Madan Lal, Parasmal and Prakash Chandra. This amount was to be paid by the Municipal Board, Nagaur. A sum of Rs. 5,000/- was paid by the Board on 17-12-64. The present suit was filed on 5-7-65 by the plaintiffs against the mortgagors and Madanlal claiming the amount due on the mortgage out of the compensation already received and to be received in future from the Municipal Board, Nagaur. 3. The suit was instituted against Madanlal, Parasmal and Prakash Chandra who contested it inter alia on the ground that possession was never transferred to the mortgagees and that the suit was barred by limitation. 3. The suit was instituted against Madanlal, Parasmal and Prakash Chandra who contested it inter alia on the ground that possession was never transferred to the mortgagees and that the suit was barred by limitation. A preliminary issue was framed by the trial court as to whether the suit was within limitation and arguments of the parties were heard. The burden of the issue was placed on the plaintiffs. It is recorded in the order of the learned Civil Judge that neither party adduced any evidence on the issue The parties were evidently under the impression that it was not necessary to produce any evidence as to whether possession was transferred to the mortgagees or not. The trial court held that the suit was within limitation. 4. The contention on behalf of the applicants is that the mortgage money was payable on demand and so the suit to recover money became barred by limitation under art. 62 on 17-10-62. It is also argued that the suit is also barred by limitation under Art. 113 from the date on which possession was lost namely 3-9-54. Reliance is placed on the decision of their Lordships of the Supreme Court in Monimala Devi vs. Indu Bala(l). 5. In Monimala Devis case(l) a mortgage was executed on 14-6 22 under which possession, was given over coal-bearing area of village Behaldih. The mortgage contained a personal covenant to pay. The date of payment was 14-4 25. The interest of the original mortgagor in Bahaldih was sold in execution of a decree on 16-1-37. The original mortgagor paid a sum of Rs. 600/- on 1-4-37 towards this mortgage, but as he had already lost his interest in this property this did not extend limitation under sec. 20. On 7-4-37 the mortgagee was dispossessed by the auction-purchaser from Bahaldih property. A suit was brought for enforcement of this mortgage by the sale of the mortgaged property on 12-7-46. Their Lordships of the Supreme Court held that Art. 120 of the old Limitation Act was applicable to a suit to recover compensation from the mortgagor under sec. 68(i (d) of the T. P. Act and as the suit was filed more than six years after the date of dispossession it was barred by limitation. 6. Another mortgage was executed in that case on 27-8*22. Towards this mortgage the original mortgagor paid a sum of Rs. 68(i (d) of the T. P. Act and as the suit was filed more than six years after the date of dispossession it was barred by limitation. 6. Another mortgage was executed in that case on 27-8*22. Towards this mortgage the original mortgagor paid a sum of Rs. 100/- on 16th August 1934, that is within the period of limitation prescribed under old Art. 132 for enforcing the mortgage, the due date for payment being 14-4-25. This payment was made before the original mortgagor lost interest in the property. This payment was held to extend limitation under sec. 20 of the Limitation Act and the suit brought within 12 years from the date of the payment of Rs 100/- was held to be within limitation. 7. The argument on behalf of the applicant is that it makes no difference whether the mortgagee is dispossessed by a third party or the property is acquired from his possession under the Land Acquisition Act and the mortgagee having been dispossessed (assuming that he was in possession) on 3 9-54 he could have only brought a suit to recover compensation within 6 years of that date under old Art. 120 Limitation Act. 8. On behalf of the mortgagees on the other hand it is contended that so long as the mortgagees remained in possession it was not necessary for them to bring a suit for recovery of the mortgage money and their claim could not be barred so long as they continued in possession. If the mortgaged property is acquired from the possession of the mortgagee under some law for the acquisition of property then a fresh cause of action arises u/s. 73(2) of the Transfer of Property Act to the mort-gagee when compensation is received by the mortgagor for the acquired property. 9. The main question for determination in this case is whether sec. 68(l)(d) applies to a case where property is acquired from the possession of the mortgage under some law for the acquisition of property. I am of the opinion that sec. 68(1)(d) is not applicable to such a case. Such a case is governed by sec. 73(2). In cases under sec. 68(1)(d) the encumbrance on the property remains in tact But where it is acquired under some law for the acquisition of land it is acquired free from encumbrance. I am of the opinion that sec. 68(1)(d) is not applicable to such a case. Such a case is governed by sec. 73(2). In cases under sec. 68(1)(d) the encumbrance on the property remains in tact But where it is acquired under some law for the acquisition of land it is acquired free from encumbrance. The mortgagee cannot bring a suit for sale after the property has been acquired. So long as compensation is not awarded for the land acquired the mortgagee cannot prosecute any remedy. He can prosecute his remedy under sec. 73(2) only when compensation is awarded to the mortgagor. If the compensation is awarded to the mortgagee then no question of his resorting to any remedy against the mortgagor arises. 10. On behalf of the applicant the decision of a Full Bench of the Allahabad High Court in Girdharlal vs. Alay Hasan (2) was referred to. That case is distinguishable as it was a case of a simple mortgage. In the case of a simple mortgage the mortgagee has to avail of his remedy within 12 years of the date of payment. That is not so in the case of a mortgagee who is in possession of the mortgaged property. He need not bring any suit so long as he continues in possession of the mortgaged property. My attention was also drawn to the decision in Kamala Kant Sen vs. Abul Barkat(3). That case also is distinguishable. The mortgagor was in possession. The mortage was executed on 10.4.1885. One year was allowed for repayment. The property was sold on 5th March, 1891 for arrears of land revenue and the surplus sale proceeds were obtained by the mortgagor. The suit was brought by the mortgagee to recover the surplus sale proceeds on 5-8T895. It was contended on behalf of the mortgagor that Art. 62 or 97 of the old Limitation Act was applicable and the suit was barred by limitation. It was held that Art. 132 of the old Limitation Act applied and the suit brought on 5-8-1895 was within limitation. The question which arises in the present suit did not arise in that suit. 11. In the present case I am of the opinion that Art. 24 of the new Limitation Act which corresponds to Art. 62 of the old Limitation Act is applicable. Money to which the mortgagees are entitled under sec. The question which arises in the present suit did not arise in that suit. 11. In the present case I am of the opinion that Art. 24 of the new Limitation Act which corresponds to Art. 62 of the old Limitation Act is applicable. Money to which the mortgagees are entitled under sec. 73(2) of the Transfer of Property Act, was taken away by the mortgagors. The money was taken away on 17-12-64. The present suit which was brought on 5-7-65 is thus within limitation provided the mortgagees were in possession on the date when possession was taken by the Municipal Board, Nagaur. 12. It is not open to the defendants in the present proceedings to contend that the award of compensation was not strictly in accordance with the provisions of the Land Acquisition Act. No such plea was taken by them in the written statement. 13. The trial court shall frame an issue as to whether possession was delivered to the mortgagees under the mortage-deed and they continued in possession till 3 9-54 when the Municipal Board, Nagaur took possession over the mortgaged property. If the trial court holds that the mortgagees were in possession then the suit will be within limitation. If on the other hand the trial court comes to the finding that possession was not transferred to the mortgagees under the mortgage then the present suit would be barred by limitation as Art. 24 of the new Limitation Act would apply and time will begin to run from the date of the original mortgage. 14. The revision application is decided as indicated above. In the circumstances of the case, I leave the parties to bear their own costs.