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2014 DIGILAW 261 (ORI)

Malika Rout v. Gani Khan

2014-04-21

RAGHUBIR DASH

body2014
JUDGMENT : This Second Appeal is against the judgment and decree dated 2.12.1995 and 16.12.1995, respectively, passed by the learned District Judge, Dhenkanal-Angul, Dhenkanal in Title Appeal No.52 of 1991 reversing the judgment and decree dated 4.10.1991 and 4.11.1991 passed by the learned Subordinate Judge, Talcher (now Civil Judge (Senior Division) in T.M.S. No.6 of 1986. 2. The plaint averment in brief is that one Mithan Bibi died in 1957 leaving her brother Fatula Khan as her sole survivor to succeed to all her properties. Her sister Najo had predeceased her. Fatula Khan died in 1970. He had three sons, namely, Gafur Khan (Plaintiff), Majid Khan (D.8) and late Md. Khan. Since Md. Khan predeceased Fatula leaving behind two daughters D.10 and D.11, they fail to get any share. Md. Khan had another daughter Tairun but she had died during life- time of Md. Khan. So, Sk. Nizamuddin and Sk. Riazuddin (D.12 and D.13) who claim to be sons of Tairun do not get any share in the property. Said Mithan Bibi was the original owner of the suit property. She mortgaged it to one Gouranga Moharana on 27.12.1924 subject to condition that if the same be not redeemed within twelve years, the mortgagee would become absolute owner of the mortgaged property. After death of Gouranga, his widow Sushila Moharana executed different sale deeds, alienating portions of the suit land shown in Plaint Schedule B, C, D, E to D.5, 6, 7 and 9, respectively. After such sale transactions, the suit has been filed by said Gafur Khan challenging the sale transactions contending that since the suit land was mortgaged to Gouranga, neither the mortgagee nor his wife did acquire title in the suit land and, for that matter, his widow had no right to sell the same to D.5 to D.9. So, the plaintiff filed the suit for recovery of possession of the suit land from D.1 to 4 who are the legal heirs of late Gouranga and his widow Sushila with a prayer to direct them to retransfer Schedule A property in favour of Plaintiff and D.8 free from all encumbrances. The Plaintiff further claims that the Orissa Money Lenders Act amended in 1975 entitles the Plaintiff and D.8 to get back the property. The Plaintiff further claims that the Orissa Money Lenders Act amended in 1975 entitles the Plaintiff and D.8 to get back the property. D.5 and D.6, sons of Sushila, in their joint written statement assert, inter alia, that their vendor Sushila had acquired title in the suit property and had full right to alienate the same; that they have acquired title over their purchased land out of suit land and even otherwise also they have acquired title by way of adverse possession. D.7 and D.9, the other two purchasers from Sushila, have filed separate written statement taking a stand which is similar to that of D.5 and D.6. D.10 and D.11 in their joint written statement have contended that they themselves and D.12 and D.13 have equal right over the suit land as heirs of Mithan Bibi. According to them, Mithan and Fatula did not die in 1957 and 1970, respectively, and Md. Khan did not predecease his father Fatula. Their specific case is that Fatula died in 1954, Mithan died in 1957 and Md. Khan died in 1974. Md. Khan died leaving behind three daughters D.10, D.11 and late Tairun Bibi, who is mother of D.12 and D.13. These facts are admitted by the Plaintiff in his plaint in another suit bearing T.S. No.3/79 in the Court of Additional Munsif, Talcher. According to these defendants Fatula having predeceased Mithan, the former could not inherit the latters property. Thus, these defendants assert that the Plaintiff cannot claim right, title and interest over the suit land. According to them D.6 has valid title over the property he has purchased. D.12 and D.13 in their joint written statement take a stand which is similar to that of D.10 and D.11. That apart, they also plead that D.5 and D.6 have perfected their title over their purchase land by way of adverse possession. Here it may be mentioned that the mortgage was a possessory mortgage subject to condition stipulated in the mortgage deed that the mortgagor can redeem the property within a period of twelve years on payment of entire dues otherwise the mortgagee shall acquire raiyati status over the mortgaged property. 3. Learned trial Court held that Majid and Gafur are entitled to share in the property of Mithan. D.12 and D.13 are also entitled to the estate of Fatula to the extent possible under the Mohammedan Law. 3. Learned trial Court held that Majid and Gafur are entitled to share in the property of Mithan. D.12 and D.13 are also entitled to the estate of Fatula to the extent possible under the Mohammedan Law. With regard to the mortgage the learned trial Court held that in terms of the mortgage deed Gouranga became the owner of the mortgaged land after expiry of 12 years. So, the mortgage cannot be redeemed. Gouranga has also perfected his title over the suit land by way of adverse possession. Therefore, the sale deeds executed by Sushila in favour of D.5, 6, 7 and 9 convey title to her vendees. The learned trial Court has further held that provisions of Section 17 of the Orissa Money Lenders Act, 1939 (OML Act) are not applicable to the case on hand inasmuch as the mortgage was made in 1924 whereas OML Act was enacted in 1939. 4. The findings of the learned appellate Court are to the effect that the conditions embodied in the registered mortgage deed that if the mortgage would not be redeemed within 12 years then the mortgagee would become the absolute owner of the mortgaged property is nothing but a clog on redemption, and that the long possession of the mortgagee over the mortgaged property is nothing but permissive for which question of adverse possession does not arise. It is further held that at the relevant time Transfer of Property Act (T.P. Act) was in force in the Ex-State of Talcher. Therefore, as per the provisions contained in Section 60 of the T.P. Act, the right of redemption could not have been taken away by the condition embodied in the mortgage deed. That apart, Section 17 of the OML Act comes into operation and the mortgage in question being a possessory mortgage stands discharged by operation of law. With these findings, the learned Appellate Court has reversed the judgment and decree of the learned trial Court and decreed the suit allowing the prayer for recovery of possession of the land in question. 5. The Second Appeal has been admitted on the following questions of law: 1) Whether the learned lower appellate court was correct in holding that the Transfer of Property Act was in force in the Ex-State of Talcher prior to 1945-46 and that section 60 of the Act was applicable to the present case? 5. The Second Appeal has been admitted on the following questions of law: 1) Whether the learned lower appellate court was correct in holding that the Transfer of Property Act was in force in the Ex-State of Talcher prior to 1945-46 and that section 60 of the Act was applicable to the present case? 2) Whether the learned lower appellate court was correct in holding that the mortgage in question stood discharged because of the applicability of section 17 of the Orissa Money Lenders Act, 1939? 3) Whether the learned lower appellate court was correct in holding that the present appellant-transferees did not derive title from the mortgagee or that they did not acquire any such title by adverse possession? 4) Whether Regulation 179 of 1915 of the Ex State of Talcher was in force, and whether the decision of the lower court that the mortgage had been redeemed is correct? Question Nos.1 and 4 relate to the applicability of the T. P. Act to the mortgage in question. On behalf of the appellant, it is urged that T. P. Act and Indian Registration Act along with some other Central Acts were introduced for the first time in Talcher State in the year 1945 which is evident from the Administration Report of Talcher State, 1945-46 but, it is argued, the learned lower appellate court made a wrong interpretation of the Administration Report to conclude that T. P. Act was in force in Talcher during the relevant period, i.e., from 1924 to 1936. With this submission, it is further argued that since the T. P. Act was not in force in Talcher during the relevant period, Section 60 of the T. P. Act cannot be made applicable to the mortgage in question. Regarding the applicability of the decision in AIR 1965 SC 225 (Murarilal v. Dev Karan) on which the learned lower Appellate Court has placed reliance it is submitted that that was a case in which no law was there in the State of Alwar to govern the field of mortgage whereas in the case in hand the Ex-State of Talcher had its own codified law governing the field which was in force during the relevant period. Therefore, it is argued, the principle of equity of redemption cannot be made applicable to the mortgage in question. 6. Therefore, it is argued, the principle of equity of redemption cannot be made applicable to the mortgage in question. 6. In order to show that T. P. Act was not in force in Talcher State when the mortgage was created in 1924 till expiry of the period of 12 years contemplated in the mortgage deed during which the mortgage could have been redeemed, learned counsel for the appellants has placed Talcher State Regulations 1915, Rules and Regulations, Talcher State 1937; Report on the Administration of Talcher State for 1940-41, Talcher State Administration report 1935-36; and Administration Report of Talcher State 1945-46. On transfer of property by way of mortgage, the Talcher State Regulations 1915 prescribe that permission for the mortgage of rayati-land will be granted by the Revenue Officer (Rule No.179); in granting permission for the mortgage, the Revenue Officer shall make due enquiry (Rule No.223); all deeds of mortgage of immovable properties are required to be registered in the State Registration Office (Rule No.250), and any Rules regarding registration of deeds not specifically mentioned in the Regulations shall be taken for guidance from the Indian Registration Act of 1877 (Rule No.270). Rules 250 to 272 are on Registration of Deeds. It appears, since these Rules were not exhaustive it is provided under Rule 270 that any Rules not mentioned in the Regulations shall be taken for guidance from the Indian Registration Act, 1877. It does not necessarily imply that by the time the Talcher State Regulations 1915 were introduced, Indian Registration Act, 1877 was not in force in the State. Rather it implies that The Registration Act used to govern the field which was not covered by the Regulation of 1915. So far mortgage is concerned, save and except Rules 179 and 223 prescribing that permission for mortgage will be granted by the Revenue Officer and while granting such permission the Officer shall make due enquiry, there are no other Rules in the State Regulations 1915 governing the field of mortgage, much less any Rules or Regulations contrary to the doctrine of clog on equity of redemption. 7. 7. In the Administration Report 1945-46, it is mentioned that the legislative measures which were adopted during the year under report have been shown in Appendix I to the Report and in addition to that the British Indian Acts and Rules which are enforced in the State have been shown in Appendix II to the Report. There does not appear to be any ambiguity that the British Indian Acts and Rules shown in Appendix II were enforced in the State of Talcher by the time the Report was submitted. But, there are no materials as to from which period each of those Acts and Rules particularly, the Registration Act and the Transfer of Property Act, remained enforced in the State of Talcher. Administration Reports of the year 1940-41 and 1935-36 are placed before this Court for perusal. But in neither of the report there is any mention about the legislative measures adopted by the State in the year under report. As already stated, in the State Regulations, 1915 and the Rules and Regulations of Talcher State, 1937, which are placed before this Court for perusal, there are no elaborate provisions governing the field of mortgage save and except that an instrument of transfer of immovable property by mortgage is compulsorily registerable and permission for the mortgage of Rayati-land shall be granted by the Revenue Officer which must be preceded by a due enquiry. In the absence of such materials and taking the Administration Report 1945-46 into consideration, it is to be presumed that the provisions contained in the Transfer of Property Act used to be enforced in the Talcher State during the relevant period. The Rules and Regulations of Talcher State, 1937 reflects that the Raja of Talcher was the final authority in the State in all matters including judiciary. The Court presided over by the Darbar, i.e., the Raja appearing before the Public in State was the Supreme Court of Talcher State. Besides the Supreme Court, there were other Civil Courts. No decisions of the Supreme Court or any other Civil Courts taking the view that clog on redemption was permissible in the State of Talcher has been filed. The Rules and Regulations of Talcher State placed before this Court do not contain any express or implied provision permitting clog on the equity of redemption. No decisions of the Supreme Court or any other Civil Courts taking the view that clog on redemption was permissible in the State of Talcher has been filed. The Rules and Regulations of Talcher State placed before this Court do not contain any express or implied provision permitting clog on the equity of redemption. Even assuming for the sake of argument that T. P. Act was not in force in the State of Talcher during the relevant time, still then the underlining principle of Section 60 of the T. P. Act which is based on the principle of equity, good conscience and justice, in the absence of any Rules and Regulations contrary to that principle, can be made applicable to the mortgage in question. In Murarilal v. Dev Karan, ( AIR 1965 SC 225 ) (supra) on which the learned lower Appellate Court has placed reliance, it is observed that the High Courts in India confirmed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principle of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to them to be unreasonable, oppressive or unjust. Learned counsel for the respondents has cited the judgment in Ghanchi Alimamad Umar v. G.G. Rangnathgarji, reported in 1995 AIHC 134 (Gujarat High Court) in which it is held that the provisions under Section 60 of the T. P. Act shall be made applicable to a mortgage created in 1943 in the erstwhile Kutchh State where the T. P. Act was not in force till 1949 observing that the element of clogging the equity of redemption is spontaneously inherent in the transaction. 8. Learned counsel for the appellants has relied upon a decision reported in AIR 1962 SC 1288 (Promod Chandra Deb v. State of Orissa) wherein it is observed that Rules and Regulations of the State of Talcher, 1937 had the effect of law. There is no quarrel over that settled position of law. But, as already observed, in the Rules and Regulations there is nothing which is contrary to the principle underlining Section 60 of the T. P. Act. There is no quarrel over that settled position of law. But, as already observed, in the Rules and Regulations there is nothing which is contrary to the principle underlining Section 60 of the T. P. Act. Therefore, merely because the mortgage transaction took place in the year 1924, with the permission of the Revenue Officer, it cannot be said that the provisions contained in Section 60 of the T. P. Act or the principle underlining that Section cannot be made applicable to the mortgage in question. Section 179 of Talcher State Regulation, 1915 simply states that permission for the mortgage on rayati-land will be granted by the Revenue Officer. It is not in dispute that due permission was obtained from the Revenue Officer before the mortgage deed executed by Mithan Bibi was registered. But it cannot be contemplated that since permission for the mortgage attached with the clog on redemption was granted, the doctrine of clog on the equity of redemption cannot be applied to the mortgage in question. It is argued by the learned counsel for the appellants that the permission order of the Revenue Officer giving the permission for creation of the mortgage had the force of law and since in the permission order all the conditions which the parties to the mortgage agreed to were incorporated, it is to be presumed that the condition including the clog on the equity of redemption were in consonance with the conditions imposed in the permission order which had the force of law and, therefore, the parties were bound to abide by those conditions. This proposition is difficult to be accepted. The permission granted by the Revenue Officer cannot be equated with the law which was in force in the State of Talcher. The permission is granted by the Revenue Officer in accordance with the Rules and Regulations of the State which had the effect of law. Order 14, Rules 1 and 2 of the Rules and Regulations, 1937 lay down the aims and objects of the requirement of the Revenue Officers permission in the case of transfer of rayati-lands in the State. It is intended mostly to protect the economic interest of the land owner and to safeguard the interest of the State. It has nothing to do with the acceptability or otherwise of conditions that the transferor and transferee intended to be incorporated in the deed of transfer. It is intended mostly to protect the economic interest of the land owner and to safeguard the interest of the State. It has nothing to do with the acceptability or otherwise of conditions that the transferor and transferee intended to be incorporated in the deed of transfer. Some of the provisions contained in these rules which are benevolent to the royats may be stated here. Such permission may only be given in cases where after the transfer the transferor has got sufficient land left to him to support him and his dependants. The Revenue Officer shall be particular to see that the whole or greater part of the good land belonging to the owner is not sold because the remaining inferior or small portion of good land may leave uneconomically small area to support him and his dependants which may subsequently compel him to leave the State and also make it very difficult for him to pay the rent of the remaining inferior land. When the State had such benevolent provision to protect the interest of the royats, it cannot be contemplated that the State had any law which was contrary to the doctrine of clog on the equity of redemption which is based on rule of justice, equity and good conscience. Both the substantial questions of law are, therefore, answered in favour of the respondents. 9. The substantial question No.3 is on the appellant-transferees claim on acquiring title by adverse possession. It is the settled position of law that when a person gets into possession of the property as mortgagee, he cannot by any unilateral act or declaration of his prescribe for a title by adverse possession against the mortgagor, because in law his possession is that of the mortgagor. It is neither pleaded nor proved that the mortgagor and the mortgagee, subsequent to the mortgage, had entered into any transaction wherefrom it can be derived that due to such subsequent transaction it was agreed that the mortgagor held the property thereafter not as a mortgagee but as owner. The widow of the mortgagee sold portions of the mortgaged property to D.5 to 9. At the time of the sale transactions she, after the death of her husband, was continuing to possess the property as a mortgagee over which she had no title. The widow of the mortgagee sold portions of the mortgaged property to D.5 to 9. At the time of the sale transactions she, after the death of her husband, was continuing to possess the property as a mortgagee over which she had no title. After the sale transactions the transferees continued to possess their respective purchased land on behalf of the mortgagee and not as owner having title in the property. Therefore, their possession did not become adverse possession and they cannot acquire title by way of such long possession. 10. On the application of the OML Act, learned counsel for the appellants argue that since the mortgage was created in the year 1924 and the right to redeem the suit property got extinguished in 1936, when the OML Act was not in existence, the learned lower Appellate Court went wrong in extending its application to the suit mortgage. It is further submitted that the OML Act was never made enforceable in the State of Talcher and for the first time it was extended to all merged States, including Talcher, in 1950 under the Orissa Merged States (Laws) Act. For better appreciation of the controversy raised in this regard, it is considered beneficial to reproduce Section 17 (1) of the OML Act. 17. Discharge of possessory mortgage(1) Notwithstanding anything to the contrary contained in any law or anything having the force of law or in any contract, any possessory mortgage which is executed either before or after the commencement of this Act shall, unless discharged previously, stand discharged after the expiration of a period of seven years from the date of the Mortgage. 11. Learned counsel for the Respondents argues that the language of Section 17 of the OML Act is clear to the effect that the Section has got retrospective effect and the same is applicable to mortgages executed prior to commencement of the said Act. Even if the mortgage was created in 1924, since the Section bears a non-obstante clause which overrides all other laws in force, the argument advanced by the learned counsel for the Respondents appears to be quite tenable. No authority is cited to support the stand taken by the learned counsel for the appellants. Therefore, by operation of law under Section 17 of the OML Act the mortgage stood discharged after the expiration of the statutory period from the date of the mortgage. No authority is cited to support the stand taken by the learned counsel for the appellants. Therefore, by operation of law under Section 17 of the OML Act the mortgage stood discharged after the expiration of the statutory period from the date of the mortgage. After the mortgage stands so discharged a liability continues to remain with the mortgagee to deliver to the mortgagor all documents in his possession or power relating to the mortgaged property and to transfer the property to the mortgagor and put him in possession thereof making it free from the mortgage and all other encumbrances created by him. The liability of the mortgagee does not cease immediately on the discharge of the mortgage. This Court in its Full Bench judgment reported in 1974 (1) CWR 128 : ( AIR 1974 Ori 173 ) (Jayagopal Mundra v. Gulab Chand Agarwalla & others) held that until the mortgagee puts the mortgagor in possession, he continues in possession of the property on behalf of the mortgagor and not in derogation of his right, title and interest until by any express act the mortgagee exercises his hostile animus. It is pointed out that Gouranga Moharana, the mortgagee, had applied for mutation in his name in respect of the suit land which was allowed on contest against the legal heirs of the mortgagor. It is argued, the legal heirs were aware of the hostile claim of Gouranga from the year 1962 when the mutation was allowed and the suit having not been filed within twelve years there from, it is barred by limitation. An application made by the mortgagee for mutation of the R.O.R. in his name and the mutation being allowed on such application cannot be an act of hostile animus to convert mortgagees possession into adverse possession. 12. In view of the discussion on the other substantial questions of law, question No.3 has to be answered in the affirmative. Learned lower Appellate Court is correct in holding that the persons who have purchased portions of the mortgaged property from the widow of the mortgagee do not derive title and they cannot acquire title even by way of adverse possession. 13. Learned lower Appellate Court is correct in holding that the persons who have purchased portions of the mortgaged property from the widow of the mortgagee do not derive title and they cannot acquire title even by way of adverse possession. 13. In course of argument, it is pointed out by the learned counsel for the appellants that the learned Appellate Court has committed an error of law in passing the decree in favour of Gani Khan (son of original D.8) alone on the ground that he alone was substituted after the death of the plaintiff. According to him, D.10 to 13 are other legal heirs of Mithan Bibi who were already on record. In this regard, it is to be stated that while answering Issue Nos.7 and 8, the learned trial court held that the original Plaintiff Gafur Khan would be entitled to the properties of Mithan Bibi to the extent possible under Mohammedan Law and Defendant Nos.12 and 13 are also entitled to the estate of Fatula Khan to the extent possible under the Mohammedan Law. It was further observed that whether the Plaintiff would be entitled to the suit land would be seen later. But the judgment of the learned trial court does not reflect that the court had decided this question at a later stage. It appears, the learned trial Court has not recorded a definite finding as to who are the legal heirs of Mithan Bibi, the original owner of the land, entitled to the estate of Mithan Bibi and to what extent. Learned lower Appellate Court has also not proceeded to decide the same. While disposing of the matter, the learned lower Appellate Court observed that the appellants, i.e., the original Plaintiff and the son of D.8, being the legal heirs of the mortgagor Mithan Bibi, are entitled to recover possession of the land described in the Schedule Aof the plaint. It is further observed that no other findings of the trial court having been challenged in the appeal, those findings are confirmed. In the ordering portion, the learned lower Appellate Court has directed D.1 to 7 to hand over vacant possession of the suit land to the appellants, namely, Gafur Khan and Gani Khan. It is further observed that no other findings of the trial court having been challenged in the appeal, those findings are confirmed. In the ordering portion, the learned lower Appellate Court has directed D.1 to 7 to hand over vacant possession of the suit land to the appellants, namely, Gafur Khan and Gani Khan. Taking clue from all such observations, it may be observed that since out of the two appellants before the learned lower Appellate Court, Gafur Khan has already died, the vacant possession of the suit land be handed over to Gani Khan (R.1 in this Second Appeal) who shall take over possession of the property on behalf of all the L. Rs. of Mithan Bibi who are entitled to her estate under the Mohammedan Law. 14. All the four substantial questions of law framed in this Second Appeal having been answered against the appellants, the appeal stands dismissed with cost. Appeal dismissed.