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1995 DIGILAW 486 (KAR)

GUNDU RAO v. GURRAJACHAR

1995-09-29

G.C.BHARUKA

body1995
G. C. BHARUKA, J. ( 1 ) THIS is the defendants' appeal against a judgment of reversal plaintiff had filed the present suit on /-1-1970 for redemption of the suit schedule property and for recovery of possession. ( 2 ) ADMITTEDLY, plaintiff as owner had created an usuf ructuary mortgage over the suit property in favour of gundu rao-defendant 1 to secure a loan of Rs. 100/- taken by him which is evidenced by a mortgage deed dated 2-8-1935 (exhibit p-1 ). As a consequence of this transaction defendant 1 as mortgagee came into possession of the said property. One of the conditions embodied in the said deed was that if the loan is not paid on expiry of eight years from the date of transaction, the said document will be treated as an absolute deed of sale (shuddha kraya patra ). It is not in dispute that the plaintiffs could not redeem the property as per the stipulations in the mortgage deed. Consequently, the mortgagee sold the property to late gujar mallaiah, father of defendants 2 to 8 under a registered sale deed dated 15-9-1947 (exhibit d-7 ). The said defendants are presently in possession of the property. ( 3 ) PLAINTIFF in the plaint asserted his right of redemption by pleading that keeping in view the terms of mortgage the right of redemption accrued to him on expiry of 8 years from the date of mortgage i. e. 2-8-1943, and since the mortgagee in the meantime has conveyed the property to defendants 2 to 8 through their father, he is entitled to the relief claimed. Defendants resisted the suit inter alia pleading that their father had purchased the suit property as bona fide purchaser keeping in view the term of the mortgage deed which conferred an absolute title on their vendor (defendant 1) on expiry of 8 years from the date of mortgage. Their further case was that since the plaintiff had the knowledge about the transfer of title in their favour right from the date of execution of the sale deed dated 15-9-1947, the suit is barred by limitation as prescribed under Article 61 (b) of the schedule to the limitation Act, 1963. The trial court accepting the plea of the defendants dismissed the suit. The trial court accepting the plea of the defendants dismissed the suit. ( 4 ) THE first appellate court has held that the condition that if the amount is not paid within eight years from the date of creating the mortgage, the mortgage deed will be treated as an absolute sale deed, is a clog on the right of redemption and accordingly is void conferring no title on the original mortgagee. The court below has also on the basis of cogent evidence on record found that mallaiah the purchaser under exhibit d-7 had full knowledge of the fact that the property which was purchased by him was a mortgaged property, and, at the time of sale to him he was handed over with the original mortgage deed by defendant 1. Therefore, as held by the first appellate court, he very well knew that he was purchasing the interest of his vendor only to the extent it was conferred on him under exhibit p-1, the mortgage deed. ( 5 ) THE lower appellate court has further found that as per the evidence on record, plaintiff had learnt about the alienation of his property by defendant 1 in favour of mallaiah only in 1968, i. e. two years prior to the institution of the suit, and, as such, rejected the plea of limitation raised by the defendants in terms of the Article 61 (b) which provided 12 years period of limitation to recover possession of immovable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration from the point of time the transfer became known to the plaintiff. ( 6 ) THIS appeal was admitted for hearing on the question of law as to "whether the lower appellate court was justified in applying Article 61 (a) of the schedule to the limitation ACT as against Article 61 (b) on the facts of the case". ( 7 ) THE recitals in the mortgage deed exhibit p-1 executed by the plaintiff are to the following effect:"today I have received a sum of Rs. 100/- (rupees one hundred only) from you to clear debts (loan) of my father madvacharya a sum of Rs. 40/- (rupees forty only) from your father Sri Achchanna and a sum of Rs. 50a (rupees fifty only) from school master Sri Sheshagiriraya in lieu of the said sum of Rs. 100/- (rupees one hundred only) from you to clear debts (loan) of my father madvacharya a sum of Rs. 40/- (rupees forty only) from your father Sri Achchanna and a sum of Rs. 50a (rupees fifty only) from school master Sri Sheshagiriraya in lieu of the said sum of Rs. 100/- (rupees one hundred only) I have mortgaged a schedule mentioned house, hereinafter called schedule mentioned house for a period of 8 years and the mortgage money Rs. 100/- will not carry any interest and you can possess the mortgaged schedule house and enjoy the same in future until the agreed period i. e. 8 years from the date of this agreement, if I failed to pay a sum of Rs. 100/- (rupees one hundred only) within the stipulated period i. e. after expiry of the said mortgage deed as agreed above, you can treat this as absolute sale deed and I am ready to pay the minor expenses like whitewash and to pull up the fallen one side wall". the contents of the mortgage deed clearly bear out that the plaintiff had created an usufructuary mortgage in favour of defendant 1 for a period of 8 years from the date of its execution i. e. 2-8-1935 and it was redeemable on expiry of the said period. But there is a further stipulation in the said deed that if the mortgage money is not repaid on expiry of the said period, the mortgage deed will be treated as 'absolute sale deed'. The obvious purpose of incorporating the said stipulation was to take away the right of redemption on expiry of 8 years. Any such insertion in a mortgage to prevent redemption on repayment has been statutorily forbidden under Section 60 of the transfer of property Act, 1882. In the case of Ganga Dhar v. Shankar Lal and others (para 7), it has been held thus:"7. The right of redemption, therefore, cannot be taken away. The courts will ignore any contract the effect of which is to deprive the mortgagor of his right to redeem the mortgage. In the case of Ganga Dhar v. Shankar Lal and others (para 7), it has been held thus:"7. The right of redemption, therefore, cannot be taken away. The courts will ignore any contract the effect of which is to deprive the mortgagor of his right to redeem the mortgage. One thing, therefore, is clear, namely, that the term in the mortgage contract, that on the failure of the mortgagor to redeem the mortgage within the specified period of six months the mortgagor will have no claim over the mortgaged property, and the mortgage deed will be deemed to be a deed of sale in favour of the mortgagee, cannot be sustained. It plainly takes away altogether, the mortgagor's right to redeem the mortgage after the specified period. This is not permissible, for "once a mortgage always a mortgage" and therefore always redeemable. The same result also follows from Section 60 of the Transfer of Property Act. So it was said in Mohammad Sher Khan v. Raja Seth Swami Dayal ". therefore it can unhesitantly be held that the stipulation in exhibit p-1 providing for treating the said document as an absolute sale deed on expiry of 8 years on non-payment of debt was clearly void and of no effect. Accordingly, it has to be held that despite the fact that the appellant failed to repay the loan amount, on expiry of 8 years the defendant 1-mortgagee did not acquire any absolute title over the suit schedule property and his right in the property remained to be only that of a mortgagee. ( 8 ) DESPITE the said legal position, it remains a fact that the mortgagee defendant 1 on the basis of the stipulation in the mortgage deed ex. P-l had, on a representation that he had acquired full title over the suit property, sold the same to the father of defendants 2 to 8 under a registered sale deed dated 15-9-1947 exhibit d-7 thereby purporting to vest an interest larger than that of the mortgagee. It is a matter of record that after so acquiring the property the purchaser mallaiah had constructed the house thereon by investing rs. 13. 000/ -. It is a matter of record that after so acquiring the property the purchaser mallaiah had constructed the house thereon by investing rs. 13. 000/ -. ( 9 ) IN the case of Motilal Fulchand and another v. Gita Rama and Another (para 14), it has been held thus:"the true principle, therefore is that if an alienee or a transferee from the mortgagee is in a position to establish that he took the mortgaged property for valuable consideration and without notice of the fact that what the mortgagee was conveying to him was merely the mortgagee's right, title and interest therein, but that the transfer or conveyance to him of the property was under circumstances which would lead to the conclusion that the mortgagee was transferring to him not merely the mortgagee's rights but a larger interest than that given by the mortgage or at any rate an interest unencumbered by the mortgage he (the transferee or alienee) would be protected, and he would be entitled to the benefit of Article 134, Limitation Act". (article 134 of the limitation Act, 1908 corresponds to Article 61 (b) of the limitation Act, 1963 ). ( 10 ) BEARING the said principles in mind even if it is held that defendants 2 to 8 through their father had purchased an interest larger than the mortgagee's interest from defendant 1, still the plaintiff in the present suit has to succeed if it is found that the suit was instituted within 12 years from the date of knowledge of transfer in their favour. In the present case the lower appellate court on appreciation of evidence has held that the plaintiff had acquired knowledge of transfer only in 1968. The present suit was instituted on 7-1-1970. Therefore it was within 12 years from the date of the said knowledge, and, as such, it cannot be held that suit is barred by limitation either for redemption or for recovery of possession as provided under Article 61 (a) and (b), limitation act. The present suit was instituted on 7-1-1970. Therefore it was within 12 years from the date of the said knowledge, and, as such, it cannot be held that suit is barred by limitation either for redemption or for recovery of possession as provided under Article 61 (a) and (b), limitation act. Since the present suit had been filed for redemption as also for recovery of possession against the original mortgagee defendant 1 and his alienees defendants 2 to 8, the suit was required to be well within the time prescribed under both clauses (a) and (b) of Article 61 of the schedule to the Limitation Act; and since the suit was filed within the period prescribed, the lower appellate court has rightly decreed the suit. ( 11 ) THE appeal is accordingly dismissed with costs. --- *** --- .