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Karnataka High Court · body

2007 DIGILAW 778 (KAR)

Gowramma v. M. Sachidananda Murthy

2007-11-29

AJIT J.GUNJAL

body2007
Judgment :- The appeal is admitted to consider the following substantial questions of law: 1). Whether the Lower Appellate Court was justified in reversing the judgment and decree of the learned Trial Judge ignoring the orders passed on I.A.No.7, wherein the right of the vendor of plaintiff was adjudicated? 2). Whether the suit for redemption by the plaintiff, as a purchaser is maintainable? 2. Most of the facts are admitted. The matrix of the case can be summarised as follows: The property in question originally belonged to one M.Rajasekhariah and his mother Chennamma. Both of them mortgaged the suit property in favour of the defendant pursuant to a registered mortgage deed dated 27.04.1960 for a sum of Rs.500/-. The said mortgage is with possession i.e., a usufructuary mortgage. Since the date of mortgage, the defendant is in possession of the suit property as a mortgagee. The plaintiff purchased the suit schedule property from its owner M.Rajasekhariah pursuant to a registered sale deed dated 01.05.1988. It is his case that co-owner Smt.Chennamma is not heard for over a period of 15 years prior to the filing of the suit. After he purchased the suit property, plaintiff asked the defendant to accept the mortgage amount and deliver possession of the suit premises to the plaintiff. In this regard, a notice was also issued to the defendant on 26.05.1988, but the defendant however did not respond. Hence, the plaintiff exercised his right to redeem the property and filed a suit on 13.11.1988. The plaintiff also deposited the mortgage money of Rs.500/-. 3. The defendant, on appearance has contested the proceedings inter alia contending that the plaintiff’s vendor M.Rajasekhariah did not have exclusive right to alienate the suit property, as such the plaintiff does not acquire a valid title over the suit property. He further pleaded that the suit premise belonged to the Joint family of M.Rajasekhariah, his father and uncle. There is no actual division by metes and bounds in respect of the suit schedule property. 4. During the course of trial, plaintiff and two witnesses were examined as P.W.1 to P.W.3 and Ex.P1 to Ex.P4 are marked. Defendant’s son as well as defendant’s Power of Attorney was examined as D.W.1 and Ex.D1 to Ex.D4 were marked. 5. There is no actual division by metes and bounds in respect of the suit schedule property. 4. During the course of trial, plaintiff and two witnesses were examined as P.W.1 to P.W.3 and Ex.P1 to Ex.P4 are marked. Defendant’s son as well as defendant’s Power of Attorney was examined as D.W.1 and Ex.D1 to Ex.D4 were marked. 5. The learned Trial Judge has recorded a finding that the plaintiff is not entitled to redeem the suit schedule property from the defendant and further he is also not entitled for consequential relief of mesne profits. Incidentally, it is to be noticed that two more additional issues were framed on the question of res judicata under Section 11 of the Code of Civil Procedure and regarding adverse possession of the defendants. On these two additional issues, the learned Trial Judge has recorded a finding that the defendant has failed to prove that the suit of the plaintiff is not maintainable and further that she has not perfected her title by adverse possession. Aggrieved by the said judgment and decree, the plaintiff preferred an appeal. In the appeal, the learned Appellate Judge has reversed the finding holding that the learned Trial Judge was not justified in non-suiting the plaintiff on the ground that he did not derive any title in respect of the suit schedule property and further decreed the suit. 6. Mr.Vishwanatha Reddy, learned counsel appearing for the defendants, in support of the substantial questions of law submits that the plaintiff, his brothers and their mother Chennamma had filed suit for partition and separate possession in respect of the suit schedule property along with the other properties against their father and his brothers in O.S.No.590/50-51. (Incidentally, it is to be noticed that the subject matter of the suit was only the non-agricultural properties.) The said suit was decreed on 13.09.1953 and a preliminary decree was drawn up. He further submits that an application I.A.VIII was filed under Order 26 Rule 13 of the Code of Civil Procedure to divide the property and in the said proceedings a contention was set up by the original mortgagee stating that the suit property, which was item No.10 in the proceedings was allotted to the share of M.Rajasekhaiah and Chennamma in family arrangement. This was negatived by the Court. This was negatived by the Court. Hence, the right to redeem the property was taken away pursuant to the order passed on the application under Order 26 Rule 13 of the Code of Civil Procedure which was numbered as I.A.No.7. He further submits that since the properties were not divided by metes and bounds, the plaintiff does not get title to the entire suit property, but only to a fraction of a share i.e., 13/58. Hence, he submits that the suit for redemption was not maintainable and the relief for redemption stood concluded pursuant to the order passed by the Court on I.A.No.7 under Order 26 Rule 13 of the Code of Civil Procedure. 7. Mr.Anantha Narayana, learned counsel appearing for the plaintiff supports the judgment and decree of the learned Appellate Judge. He submits that it is not open for the defendant to question the title of the plaintiff. He submits that under Section 91 of the Transfer of Property Act, the plaintiff being an assignee of the mortgage rights is entitled to redeem and the suit is maintainable. He further submits that the question of res judicata inasmuch as in the earlier proceedings the right to sue for redemption having been negatived, the learned Trial Judge on the preliminary issue has ruled that the suit is not barred by res judicata under Section 11 of the Code of Civil Procedure. He also further submits that it is not open for the defendant to contend that they have perfected title by adverse possession. According to him, the substantial questions of law does not arise for consideration. Re: substantial questions of law I and II 8. It is not in dispute that the property originally belonged to the Joint Family of the plaintiff’s vendors. It is also not in dispute that a suit was filed for partition and separate possession and a preliminary decree was granted. The plaintiff’s vendor was awarded 13/58th share in the suit schedule property. The question would be whether by alienating the suit property in favour of the plaintiff, does the plaintiff get any right to sue for redemption. To appreciate this contention, one will have to look into the necessary provisions of the Transfer of Property Act. Section 60 of the Transfer of Property Act would contemplate that it is a right of mortgagor to redeem the property. 9. To appreciate this contention, one will have to look into the necessary provisions of the Transfer of Property Act. Section 60 of the Transfer of Property Act would contemplate that it is a right of mortgagor to redeem the property. 9. Section 91 of the Transfer of Property Act would confer right on persons, who are entitled to sue for redemption. Section 91 would contemplate, apart from the mortgager, other persons, who are entitled to redeem or institute a suit for redemption of the mortgaged property are; any person who has any interest in, or charge upon the property mortgaged or in or upon the right to redeem the same; any surety for the payment of the mortgage-debt or any part thereof; or any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property. 10. It is to be noticed that a mortgagor can file a suit to enforce his rights to redeem under Section 91 of the Transfer of Property Act. The dismissal of the earlier suit for redemption, whether as abated or as withdrawn would not deprive the mortgagor from filing a second suit for redemption and for that matter any successive suit so long as the mortgage subsists the right of redemption does not extinguish by efflux of time or a decree of the Court. A right to redemption can be acquired also by adverse possession. It is to be noticed that a benamidar also could maintain an action in respect of the property though the beneficiary owner is not a party to the said proceedings. Way back in the year 1981 Lord Nottingham in case of Harris V/s. Harris laid down the principle: “Once a mortgage, always a mortgage” This is a maxim to protect the mortgage’s right of redemption: it renders all agreements in a mortgage for forfeiture of the right to redeem and also encumbrances of or dealings with the property by the mortgagee as against a mortgagor coming to redeem. The said maxim, ‘once a mortgage, always a mortgage’ was supplemented by the words ‘and nothing but a mortgage’. Thus it would read as ‘Once a mortgage, always a mortgage’ and nothing but a mortgage’. The said maxim, ‘once a mortgage, always a mortgage’ was supplemented by the words ‘and nothing but a mortgage’. Thus it would read as ‘Once a mortgage, always a mortgage’ and nothing but a mortgage’. The said maxim has also been supplemented in the Indian context by words ‘and therefore always redeemable’ as observed by the Apex Court in the case of Seth Ganga Dhar V/S. Shankarlal reported in AIR 1958 SC 770 . It is thus evident that the very conception of mortgage involves three principles. First, there is 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. 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. The maxim ‘once a mortgage always a mortgage’ may be said to be a logical corollary from the doctrine, which is the very foundation of the law of mortgages, that time is not of the essence of the contract in such transactions: for the protection which the law throws round the mortgagor might be rendered wholly illusory, if the right to redeem could be limited by contract between the parties. Right to redeem is an incident of a subsisting mortgage and is inseparable from it so that the right is co-extensive with the mortgage itself. The right subsists until it is appropriately and effectively extinguished either by the acts of the parties concerned or by a proper decree of the Competent Court. 11. Indeed it is the case of the defendant that the right to redeem was lost by the plaintiff`s vendors pursuant to the order passed on the application I.A.No.7, in the earlier suit. Obviously, the subject matter of the said application was to divide the house and other non-agricultural properties. In the said application, a defence was set up by the original mortgages stating that the property has fallen to the share of the plaintiff`s vendor. But however, that was negatived. Obviously, the subject matter of the said application was to divide the house and other non-agricultural properties. In the said application, a defence was set up by the original mortgages stating that the property has fallen to the share of the plaintiff`s vendor. But however, that was negatived. What was negatived was the contention of the original mortgagee that the property had fallen to the share of the original vendor of the plaintiff but not the equity of redemption. Even otherwise, it is to be noticed that on the said preliminary issue regarding maintainability of the present suit for redemption has been negatived by the learned Trial Judge holding that Section 11 of the Code of Civil Procedure is wholly inapplicable. 12. In so far as the right of the mortgagee to question the title of the plaintiff in seeking redemption is concerned, it is to be noticed that Lord Cottenham in the case of Tasker V/S. Small [1837] 40 ER S4S(D) has observed thus: “A mortgagee can never refuse to restore to his mortgagor or those who claim under him upon repayment of what is due upon the mortgage the estate which become vested in him as a mortgagee. To him it is immaterial upon repayment of the money whether the mortgagor’s title was good or bad. He is not at liberty to dispute it any more than a tenant is at liberty to dispute the landlord’s title.” Swinfeneady M.R. in Graham V/S. Seal, [1918] SS LJ Ch 31(E) has observed thus: “The obligation of a mortgagee is, as against payment of what is due to him, to reconvey and deliver up the deeds of the mortgaged premises. It is like the obligation of a vendor to convey and handover the title deeds and conveyance as against payment of the purchase money. It contemplates that the handing over of the conveyance and payment of the purchase money shall be a simultaneous transaction so that neither party is at risk for any time without either the money or the estate. As a mortgager is never allowed to impeach the mortgage which he has made so the mortgagee may not allege that the tile of the mortgagor under whom he claims is defective. 13. It is to be noticed that the original mortgagee without any demure has taken the property on mortgage. He has been in possession. As a mortgager is never allowed to impeach the mortgage which he has made so the mortgagee may not allege that the tile of the mortgagor under whom he claims is defective. 13. It is to be noticed that the original mortgagee without any demure has taken the property on mortgage. He has been in possession. When the right to sue for redemption, is sought to be invoked, it is not certainly open for him to question the title of the assignee stating that his vendor did not have title in respect of the entire property when it was mortgaged. Leaving aside instances in which the transaction is alleged to be benami a mortgagee can have no ground of complaint or cause for hesitation to receive the money from the person mentioned in the deed as the debtor and when the mortgage is usufructuary, restore the property to him as it is only a security for the debt. The mortgagor on the other hand is exposed to the risk of losing the property if he has to make good his title to the property and for any reason the proof is inadequate. The amount advanced on a mortgage being generally less than the market value of the property subject to it and borrowing small amounts by mortgaging highly valuable properties being conceivable the mortgagee with the advantages of often having the title deeds with him may easily thwart redemption by demanding proof of title and exploit the mortgagor’s difficulties in establishing his title to the property. In normal course a mortgagee is presumed to satisfy himself about the security being acceptable from the person who offers it when the money is lent. In the absence of special circumstances he cannot again seek investigation of this. In fact that would unnecessarily enlarge the scope of a suit for redemption and would certainly lead to unnecessary complications. Consequently, a mortgagee cannot resist the claim for redemption on the ground that the mortgager has no title to the property. 14. The Apex Court in the case of Ishwar Dass Jain (dead) through L.Rs. V/S. Sohan Lal (dead) by L.Rs. reported in AIR 2000 SC 426 has observed thus: “The defendant’s title was a derivating title as a mortgagee. Consequently, a mortgagee cannot resist the claim for redemption on the ground that the mortgager has no title to the property. 14. The Apex Court in the case of Ishwar Dass Jain (dead) through L.Rs. V/S. Sohan Lal (dead) by L.Rs. reported in AIR 2000 SC 426 has observed thus: “The defendant’s title was a derivating title as a mortgagee. Having come in possession of the whole property as a mortgagee from the plaintiff, treating plaintiff as full owner it was not open for the defendant to question the title of the plaintiff. To him (mortgagee) it is immaterial, upon repayment of the money, whether the mortgagor’s title was good or bad. He is not at liberty to dispute it any more than a tenant is at liberty to dispute his landlord’s title. A usufructory mortgagee cannot deny the title of the mortgagor, nor can he set up adverse possession unless he actually leaves the holding and re-enters under a different status.” 15. It is to be noticed that a mortgagee cannot absolve himself from liability as mortgagee to the person who has the right to redeem having acquired that right by purchase from the mortgagor by allowing the mortgager to redeem. It is also to be noticed that under Section 91(a) of the Act, a redemption of a mortgage, a Co-sharer in a mortgaged property can also be construed as a person interested in such property. 16. In the case on hand, it is to be noticed that when the property was taken by the original mortgagee, he had satisfied himself about the title of the mortgagor, when the right to redeem the property was sold in favour of the plaintiff with a right to redeem. Hence, the plaintiff being a successor and interested person can step into the shoes of the original mortgagor and sue for equity of redemption. Consequently, I am of the view that the suit filed by the plaintiff seeking for redemption is maintainable notwithstanding the finding recorded in the earlier proceedings on I.A.No.7. The suit is maintainable and it is not open for the defendants, the successor of the mortgagee, to contend that the plaintiff does not have title to the suit property to have the same redeemed. The substantial questions of law are answered accordingly. I do not find any merit in this appeal. Appeal stands dismissed. No costs.