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2013 DIGILAW 193 (KER)

Kuttan Narayanan v. Benny Sasi

2013-03-04

S.S.SATHEESACHANDRAN

body2013
Judgment : 1. Common petitioners in the Writ Petition and Revision are the plaintiffs in a suit for redemption. A preliminary decree was passed allowing the plaintiffs to redeem the mortgage property on payment of the mortgage money applying for passing a final decree within a period of two months. Value of improvements claimed by the defendants was relegated for consideration in the final decree proceedings. That preliminary decree was passed on 23.2.1995. Plaintiffs did not deposit the mortgage money and move for passing final decree within the period specified. Much later, after depositing mortgage money, they moved two applications, one for passing final decree and the other for condoning the delay in applying for passing final decree. Those two applications were dismissed by the learned Munsiff for passing final decree. Those two applications were dismissed by the learned Munsiff under the Common Order dated 28.2.2005. The revision is against the dismissal of the application for passing the final decree, and the Writ Petition against the dismissal of the application for condoning delay. 2. Some factual aspects involved in the case have to be taken notice before hand. Property sought to be redeemed in the suit was under a mortgage of the year 1961, which was taken assignment by the defendants in 1963. Period of the mortgage fixed was seven years. Suit was filed within time for redemption of the mortgage. Preliminary decree in the suit was passed on 23.2.1995 with direction to deposit the mortgage price and move for passing final decree within a period of two months. Mortgage money was deposited only on 29.10.2004, and the next day the two applications, one for passing final decree and the other for condoning delay were filed. By the time the mortgage money was deposited and the aforesaid applications were moved the mortgage sought to be redeemed under the preliminary decree ceased to subsist and as such the aforesaid applications were not entertainable was the conclusion formed by learned Munsiff to dismiss the applications of plaintiffs. 3. Learned counsel for plaintiffs urging that after passing of preliminary decree in a suit for redemption no time limit for deposit of the mortgage price for passing of final decree is applicable assailed the Order of the learned Munsiff as unsustainable. 3. Learned counsel for plaintiffs urging that after passing of preliminary decree in a suit for redemption no time limit for deposit of the mortgage price for passing of final decree is applicable assailed the Order of the learned Munsiff as unsustainable. Reliance is placed on Govindan Nair v. Abraham ( 2002 (3) KLT 630 ) and also Achaldas Durgaji Oswal v. Ramvilas Gangabisan Heda (2003 (2) KLT SN 45 (C.No. 58) SC = AIR 2003 SC 1017 ) to contend that for preparation of final decree the time limit is within a period of three years from the date of deposit, and for making deposit of mortgage money in terms of the preliminary decree, there is no time limit at all. Learned counsel argued that deposit made and application moved for passing a final decree, within, three years from such deposit made and application moved for passing a final decree, within, three years from such deposit ignoring the petition moved for condoning delay in filing the application, which was not required, was sufficient to pass final decree in the suit. Learned counsel contended that once a right to redeem is recognized and declared under the preliminary decree passed by the court in the case of an usufructuary mortgage where the mortgagee has no right to move for foreclosure or sale of the mortgage security to realize the mortgage debt before passing of the final decree, deposit of mortgage price under the preliminary decree was not made by the mortgagor within the time fixed is of no significance and that does not affect his right to make the right to make the deposit and move an application for passing a final decree. Once a mortgagee ever a mortgagee, according to counsel, crystalises and emphatically restricts the limit within which a mortgagee could set up any right over the mortgage security. He can at best claim the mortgage price, that alone, with value of improvements, if any, made by him subject to restrictive convenants under the mortgage deed a usufructuary mortgagaee after passing of a preliminary decree allowing redemption of the mortgagee cannot contend that right to redeem the mortgage has become extinguished by efflux of time, submits the counsel. 4. He can at best claim the mortgage price, that alone, with value of improvements, if any, made by him subject to restrictive convenants under the mortgage deed a usufructuary mortgagaee after passing of a preliminary decree allowing redemption of the mortgagee cannot contend that right to redeem the mortgage has become extinguished by efflux of time, submits the counsel. 4. Per contra learned counsel appearing for respondents contended that deposit made after the mortgage ceased to subsist cannot be accepted, and, passing of final decree accepting such deposit in continuation of the preliminary decree passed would not arise. Right to redeem a mortgage subsists only so long as the mortgage remain unextinguished, and passing of a preliminary decree in a suit for redemption filed by the mortgagor would not enable him to get indefinite period of time for deposit of the mortgage price after passing of the preliminary decree, is the submission of the learned counsel. If the time fixed under the preliminary decree is over and it is not extended by the court on sufficient cause being shown by the mortgagor for non deposit within the time fixed, and, by that time if mortgage had extinguished and irredeemable the mortgagor can no longer claim any right to deposit the mortgage price and move for passing final decree, is the further submission of the counsel. There is no merit in the challenges raised against the Common Order passed by the learned Munsiff declining to condone the delay and also to entertain the application for passing the final decree in the suit, is the submission of the learned counsel. 5. The short question emerging for consideration is whether the right of the mortgagor to redeem the mortgage after passing of a “preliminary decree but fixing a time limit for deposit of the mortgage money and moving for passing final decree would be fatally impaired if there was delay in deposit and by that time the period fixed to redeem the mortgage has lapsed by efflux of time. In examining that question what is enshrined under S.60 of the Transfer of Property Act insulating the right of the mortgagor to redeem the mortgage till it is extinguished by act of parties or operation of law is of much significance. In examining that question what is enshrined under S.60 of the Transfer of Property Act insulating the right of the mortgagor to redeem the mortgage till it is extinguished by act of parties or operation of law is of much significance. A right to redeem the mortgage instituting a suit for redemption to enforce such right no doubt is governed by the prescribed period of limitation. But once a suit for redemption is is instituted seeking enforcement of the right to redeem by the mortgagor then such a suit is governed by the provisions covered by Order 34 of the Code of Civil Procedure. Order 34 R.7 governs the passing of a preliminary decree in a redemption suit. If the plaintiff succeeds in such a suit, the court has to pass a preliminary decree ordering for taking an account of the amount due to the defendant on the date of such decree, which includes the principal and interest on the mortgage, the costs of suit, if any, awarded to him, and other costs charges and expenses properly incurred by the mortgagee upto that date in respect of his mortgage security with interest thereof. Such decree ordering as above or declaring the amount so due at that date, shall direct the plaintiff to pay into court the amount so due at that date, shall direct the plaintiff to pay into court the amount so found or declared due on or before such date as the court may fix within six months from the date on which the court confirms and countersigns the account taken or from the date on which such amount declared in court, as the case may be, and also provide for payment of such amount as may be adjudged due in respect of subsequent charges and expenses payable to the mortgagee with a direction to the defendant to deliver all documents in his possession or power relating to the mortgaged property to the plaintiff on deposit or payment of such amount by him and if necessary to retransfer the property to the plaintiff at his cost free from the mortgage and encumbrances created by the defendant or any person claiming under him. The court shall also, if necessary, direct the defendant, to put the plaintiff in possession of the property. The court shall also, if necessary, direct the defendant, to put the plaintiff in possession of the property. The above rule enables a mortgagee other than a usufructuary mortgagee to move for sale or foreclosure of the mortgage security if the amount taken on account or declared as due to the mortgagee under the preliminary decree with cost and interest granted is not deposited or paid by the mortgagor within the time fixed under the preliminary decree, unless on good cause shown by the mortgagor time for such deposit or payment is extended by the court before passing of the final decree for foreclosure or sale. So far as an usufructuary mortgagee is concerned he has no right for passing of a final decree for foreclosure or sale of the mortgage security on default of his mortgagor to pay or deposit the mortgage price within the time fixed under the preliminary decree or such other extended time granted by the court to do so. Previously before the amendment to R.7 and 8 under O.34 under the Transfer of Property (Amendment) Supplementary Act 1929 (Act 21 of 1929) an usufructuary mortgagee also had a right to move for passing of a final decree for foreclosure or sale just like other mortgagees when there was default on the part of the mortgagor to pay or deposit the mortgage price fixed under the preliminary decree within the time fixed or extension granted by the court. But after the aforesaid amendment such right cannot be exercised over a usufructuary mortgage which is available only in the case of other mortgages. 6. A learned single Judge of this Court in Kunjamma v. Bhageerathy Amma ( 1990 (1) KLT 504 ) had expressed the view that deposit of the amount due in the preliminary decree in a suit for redemption of a usufructuary mortgage has to be made before the date fixed in the preliminary decree or within the period of limitation prescribed under Art.61 of Limitation Act i.e., within thirty years from the date on which the mortgage money has become due. Such a view was formed on the premise the deposit can be made by the mortgagor so long as the relationship of mortgagor and mortgagee subsisted and it cannot be said that the relationship continued even after the expiry of the period of limitation prescribed under Art.61 of the Limitation Act. Such a view was formed on the premise the deposit can be made by the mortgagor so long as the relationship of mortgagor and mortgagee subsisted and it cannot be said that the relationship continued even after the expiry of the period of limitation prescribed under Art.61 of the Limitation Act. Sub-r. (2) of R.7 of O.XXXIV of the Code of Civil Procedure does not confer on the usufructuary mortgagor a right to seek extension of time and that is applicable only in the case of mortgagor other than usufractuary mortgagee was the reasoning taken to hold that the mortgagor has a right to deposit the amount fixed or declared under the preliminary decree at any time before the right to redeem is fixed or declared under the preliminary decree at any time before the right to redeem is extinguished, even if it is not within the time under the preliminary decree, and he has to file the application for passing final decree within three years of such deposit. A Division Bench of this Court in Govindan Nair v. Abraham ( 2002 (3) KLT 630 ) holding that the proposition laid in Kunjamma’s case referred to above is not good law has over-ruled that decision stating what is fixed under Art.61(a) of the Limitation Act is only a time limit for filing a suit for redemption of mortgage and not for payment of mortgage money. The Division Bench in the above case also held that the right to redeem mortgage is not extinguished merely because the mortgage money is not paid or deposited within thirty years. 7. The right conferred on the mortgagor under S.60 of the Transfer of Property Act is called a right to redeem and a suit to enforce it is called a suit for redemption. Once the mortgagor institutes a suit for redemption and exercises his right to redeem the mortgage, for which alone the period fixed under Art. 61(a) of the Limitation Act fixing the outer limit for sue for redemption, it cannot be contended that his right of redemption has to be tested at different stages till the passing of the final decree in the suit. Where a preliminary decree is passed in favour of the mortgagor of a usufructuary mortgage, which is in effect a declaration or recognition of his right to redeem the property on deposit of the mortgage price already fixed, or to be fixed, time for such deposit has been fixed by the court would no way impair his right in making the deposit after the time limit fixed and move an application for passing a final decree. Right to redeem no doubt may be impaired after passing of the preliminary decree by act of parties or operation of law. Subsequent transaction over the mortgage may have its impact in exercising the right to redeem even after passing of the preliminary decree. Subsequent to the mortgage and passing of preliminary decree, the mortgagee may purchase the equity and this may result in extinction of the mortgage by act of parties. A mortgagee may acquire equity of redemption by inheritance. Such circumstances may have its impact over the right of redemption of the mortgagor in moving for passing final decree depositing the mortgage price. Where the right to redeem by the usufructuary mortgagor continues after passing of the preliminary decree till the date of passing of the final decree, and till remedy is barred by Art.137 of the Limitation Act, 1963, which is applicable only in moving an application for passing a final decree and not for deposit of the mortgage price, the court has power and jurisdiction to entertain an application to pass the final decree. At any time before the remedy is barred, usufructuary mortgagor has the right to deposit the redemption money under the preliminary decree. Even if a previous application had been moved after deposit and it was dismissed for non-prosecution that would not per se bar his right to move a fresh application for passing a final decree within three years from the date from which the deposit was made. 8. In K. Parameswaran Pillai v. K.Sumathi ( AIR 1994 SC 191 ) the Apex Court has expressed some views that if a remedy to enforce a preliminary decree for redemption is barred by limitation thereafter the right remains unenforceable. In such a case, deposit even if made cannot be recognized and court cannot proceed to pass final decree since the remedy is lost was the view expressed. In such a case, deposit even if made cannot be recognized and court cannot proceed to pass final decree since the remedy is lost was the view expressed. The facts of that case would show such views were expressed with respect to a mortgage other than a usufructuary mortgage covered under S. 58 (d) of the Transfer of Property Act. With respect to usufructuary mortgage and how far failure to deposit the mortgage price after passing of the preliminary decree within the time fixed there under or extended time granted by court, the Apex Court in the same decision has expressed thus:- “In the case of preliminary decree for redemption of usufructuary mortgage no limitation begins to run until deposit is made though there is a conditional preliminary decree and default was committed by the mortgagor for compliance thereof.” Taking note of the above decision also a three Judges Bench of the Apex Court in Ramvilas G.Heda v. Achaldas D.Oswal (2003 (2) KLT SN 45 (C.No. 58) SC = AIR 2003 SC 1017 ) considered the question involved and held thus:- “We are, therefore, of the opinion that although by reason of preliminary decree in the suit for redemption of ussufructuary mortgage, the Court may fix the time for payment of the amount declared due but default in depositing such payment would not debar him from a right to redeem the mortgaged property.” When that be the law declared by the Apex Court, the orders passed by learned Munsiff holding that the deposit made by mortgagor long after the time fixed by the preliminary decree, and, beyond the period for redeeming the mortgage, if such period is reckoned with reference to the period under the mortgage deed, is erroneous and cannot be sustained. The right of a usufructuary mortgagor to deposit the mortgage price after passing of the preliminary decree even beyond the time fixed by the court under such decree cannot be tested or examined with reference to the period of limitation to sue for redeeming the mortgaged property. His right to redeem the property once approved under the preliminary decree time has been fixed by the court to make such deposit, on its default would not debar him from moving for passing final decree depositing the mortgage price fixed. His right to redeem the property once approved under the preliminary decree time has been fixed by the court to make such deposit, on its default would not debar him from moving for passing final decree depositing the mortgage price fixed. For making the deposit of mortgage price after passing of the preliminary decree in the case of a usufructuary mortgagor time fixed under such decree for deposit has been defaulted would not debar his right to redeem the property. Since a usufructuary mortgagee has no right to seek for foreclosure or sale of the mortgaged property before passing of the final decree, the right of the mortgagor to deposit mortgage price, after passing of preliminary decree, continues, but, however the application for passing the final decree has to be moved within three years from such deposit. 9. Order passed by the court below dismissing the application for passing the final decree holding that the deposit of mortgage price by the mortgagor is belated, is unsustainable. Challenge against that order in the revision has only to be upheld for the reasons stated above. No extension of time from court to make the deposit is necessary, and hence the Order passed by the court below declining extension of time applied for by mortgagor is of no consequence. Order passed by the court below on the application for extension challenged in the Writ Petition is revoked, and that application shall be treated as closed. The court below is directed to take back the application of petitioner (mortgagor) for passing final decree on file, and dispose the same in accordance with law. Revision and Writ Petition are allowed as indicated above.