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Raghavendracharya Appacharya Katti Vs. Vaman Shriniwas Deshpande - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 49 of 1941
Judge
Reported inAIR1943Bom191; (1943)45BOMLR253
AppellantRaghavendracharya Appacharya Katti
RespondentVaman Shriniwas Deshpande
DispositionAppeal allowed
Excerpt:
.....relief act (xvii of, 1879), section 12-possessory mortgage-on taking accounts nothing found due on mortgage-redemption by one of the co-mortgagor-rights of other co-mortgagor-indian limitation act (ix of 1908), article 148-period of limitation.;a possessory mortgage executed in 1870 was redeemed in 1932 by defendant no. 3, one out of the five heirs of the mortgagor, under the provisions of the dekkhan agriculturists' relief act, 1879. on taking accounts of the mortgage under the act nothing was found due and the mortgaged property passed into defendant no. 3's possession. in 1933 and 1934 two of the other heirs of the mortgagor sold their shares in the property to plaintiffs, who sued in 1937 to recover possession of their shares in the property from defendant no. 3. it was contended by..........the heirs of the mortgagee, to deliver possession of the property free from the charge of the suit mortgage. defendant no. 3 accordingly got possession. subsequently in 1933' and 1934 two of the other cousins of govind interested in the mortgage along with defendant no. 3 sold their rights to the plaintiffs, respondents nos. 1 to 4. each of them purported to sell one-fourth of the property. in april, 1937, the plaintiffs brought a suit on the strength of these sale-deeds to recover a half share in the property.3. the principal contention of defendant no. 3 in the suit and in this appeal is that a suit for possession was not maintainable. relying on sections 92 and 95 of the transfer of property act he maintains that as a co-mortgagor who had redeemed the mortgage he had all the.....
Judgment:

Broomfield, J.

1. In this second appeal there is a question of limitation and also a question of the construction of s, 92 of the Transfer of Property Act.

2. The property in dispute consists of certain fields at Hukeri which once belonged to a certain Govind Krishna. He mortgaged them as long ago as 1870 by a deed of possessory mortgage, exhibit 44. It provided that the mortgagee was to enjoy the property in lieu of interest on the mortgage debt and until such time as the principal' of the debt Rs. 150 was paid off and the land redeemed. Govind died in 1881 and he was succeeded by his brother's widow Ramabai. She died in 1892 and the estate then passed to five distant cousins of Govind Krishna. One of these, Raghavendracharya, who is defendant No. 3 the appellant before us, brought a suit in 1931 for accounts and redemption of the mortgage under the Dekkhan Agriculturists Relief Act. It was found on taking accounts that nothing was due on the mortgage and accordingly a decree was passed in 1932 directing the defendants in the suit, the heirs of the mortgagee, to deliver possession of the property free from the charge of the suit mortgage. Defendant No. 3 accordingly got possession. Subsequently in 1933' and 1934 two of the other cousins of Govind interested in the mortgage along with defendant No. 3 sold their rights to the plaintiffs, respondents Nos. 1 to 4. Each of them purported to sell one-fourth of the property. In April, 1937, the plaintiffs brought a suit on the strength of these sale-deeds to recover a half share in the property.

3. The principal contention of defendant No. 3 in the suit and in this appeal is that a suit for possession was not maintainable. Relying on Sections 92 and 95 of the Transfer of Property Act he maintains that as a co-mortgagor who had redeemed the mortgage he had all the rights of the mortgagee including the right to insist on being redeemed. The other co-mortgagors have no right except to bring a suit for redemption and thereby to get possession. This argument was not accepted by the trial Court or by the Court of first appeal. It was held that the suit was maintainable as a suit for possession and was not barred by time. There was a difference as to the amount of the share to which the plaintiffs are entitled; the trial Judge held that they were entitled to one-fifth while on appeal the Assistant Judge increased it to two-fifths.

4. Section 92 of the Transfer of Property Act (I quote only the portion which is relevant for our purpose) provides that any co-mortgagor shall, on redeeming property subject to the mortgage, have so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. The right conferred by this section which was newly enacted in 1929 is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.

5. The view taken by the learned Assistant Judge is that the words 'rights as regards redemption' cannot be interpreted to mean that a co-mortgagor should bring a suit for redemption against the redeeming co-mortgagor. Why he says that, however, we do not understand, because that is what the words plainly do mean. He also says that the right of redemption referred to in the section applies only to other mortgages on the property. But that again is inconsistent with the plain language of Section 92. 'Subrogation' means neither more nor less than substitution. A person who is subrogated to the rights of the mortgagee has all the rights of the mortgagee, not merely some of the rights, and those rights must include rights in connection with the particular mortgage by redeeming which he gets the benefit of the section. It cannot be disputed that the mortgagee under a possessory mortgage like the one in suit is entitled to remain in possession of the property until a suit is brought for redemption of the mortgage. Nor we think can it be disputed' that by reason of Section 92 the subrogee has precisely the same right. We can see no grounds for qualifying or limiting the language of Section 92 in the way in which the learned Assistant Judge does. He has given the further reason for the view taken by him, viz. that when the original mortgage is extinguished by a decree of the Court Section 60 of the Transfer of Property Act is a bar to any further suit for redemption. But one of the implications of the doctrine of subrogation is that the subrogee keeps the mortgage alive for his own benefit. The mortgage that is paid off is not extinguished but is treated as assigned to the subrogee. The position is in our view correctly stated in the note in Sir Dinshah Mulla's Transfer of Property Act, at page 540. After referring to difficulties caused by the reference to the redeeming co-mortgagor's charge in the old Section 95, which have been removed since that section was amended in 1929, he says :

The redeeming mortgagor has not merely a charge, but the mortgage as to his share is extinguished, and as to the shares of the other mortgagors he stands in the shoes? of the mortgagee, and limitation to enforce his right of contribution against the co-mortgagor, and for the co-mortgagor's suit to redeem him, is the same as in a suit to enforce or to redeem the mortgage.

6. It has been argued on behalf of the plaintiffs that no question of subrogation arises because in fact in the circumstances of this case there has been no redemption. The basis of that argument is that when accounts were taken under the Dekkhan Agriculturists' Relief Act it was found that the mortgagee had recovered not only the principal money but also a fair rate of interest on it out of the income, and therefore by reason of the provisions of the Act the plaintiffs were not liable to pay anything. Mr. Belvadi referred us to the terms of Section 60 of the Transfer of Property Act which provides that at any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage money to get a reconveyance. He argues that redemption implies payment of the mortgage debt, and if there is no mortgage debt to pay, there is no redemption. In our view this is not a correct statement of the position. No doubt the mortgagor cannot redeem without paying or tendering whatever amount may be' due. But that does not mean that there is no such thing as redemption if in the circumstances it turns out that there is nothing to pay. It was only as, the result of the application of the 'Dekkhan Agriculturists' Relief Act that nothing was found due. According to the terms of the mortgage itself the mortgagee was entitled to remain in possession in lieu of the interest only, and however long he remained in possession he was entitled to receive the principal amount. Defendant No. 3, the plaintiff in that suit, was enabled to get these favourable terms because he established that he was an agriculturist. It does not follow that the other co-mortgagors would have been able to get redemption on the same terms. Apart from that, however, the suit brought by defendant No. 3 was undoubtedly a suit for redemption and the decree, the terms of which have already been given, was nothing less than or different from a decree for redemption.

7. A further argument, which is really the same argument in a different form, is that because' it was found in the suit that nothing was due on the mortgage, the mortgage became a usufructuary or self-redeeming mortgage of the kind referred to in Section 62 of the Transfer of Property Act, that is to say where the mortgagee is authorised to pay himself the mortgage money from the rents and profits of the property. In that connection reliance was placed on Gobardhan v. Sujan (1894) I.L.R. 16 All. 254. It was held there that in the case of a usufructuary mortgage of this kind by several co-mortgagors, when such ?mortgage is satisfied out of the usufruct, each co-mortgagor is not entitled to recover possession of more' than his share of the mortgaged property. Consequently where in such a case one of several co-mortgagors gets possession of the whole of the mortgaged property, he does not occupy the position of a mortgagee to his co-mortgagors but his possession is adverse to them. Of course if that is the position, the article of limitation applying would be Article 144 and not Article 148, and it was so held. It is by no means clear that this case is any longer good law under the Transfer of Property. Act as it now stands. It would rather appear that the language of Section 92 would cover even a mortgage of that kind. In that connection reference may be made to Jauhari v. Tunde (1932) I.L.R. 54 All. 975. But, however that may be, it is manifest that we are not dealing with a mortgage of that kind. It was a mortgage which could only be brought to an end by a suit for redemption such as the suit which was in fact brought. There is no ground therefore for holding that the doctrine of subrogation does not apply.

8. The next point taken on behalf of the plaintiffs was that on the view that Article 148 applies limitation runs from the date of redemption. In Jairam v. Bhilaji Niyogi A.J.C. took the view that limitation under Article 148 begins from the date when the co-mortgagor redeems the mortgage, and cited in support of that proposition a decision of the Nagpur Court in 1926 prior to the enactment of Section 92, Suryabhan v. Renuka A.I.R. [1926] Nag. 84. That was a case of a subsequent mortgagee paying off a prior mortgagee, and turned on the construction of Section 74 of the' Act, now repealed. On the other hand the Madras, Allahabad and Patna High Courts have all taken the view that limitation in such a case runs from the date of the original encumbrance. In Kotappa v. Raghavayya (1926) I.L.R. 50 Mad. 626 a puisne mortgagee had paid off a decree on a prior hypothecation. It was held that he was subrogated to the right of the prior hypothecatee and the period within which he could enforce it was twelve years from the date on which a suit on the hypothecation should have been brought and not twelve years from the date of payment. In Bansidhar v. Siv Singh (1933) I.L.R. 56 All. 134 it was held that a puisne mortgagee who pays off a prior mortgagee's decree does not thereby acquire a fresh charge in his favour giving him a fresh start of limitation for a suit to recover the money by enforcement of the prior mortgage. If the period of limitation prescribed for a suit on the prior mortgage has already expired, he cannot bring a suit to enforce his remedy as against the mortgaged property.

9. Finally there is a case expressly on the point before us, Mukh Narain Singh v. Ramlochan Tiwari (1940) I.L.R. 19 Pat. 938. There it has been decided that a suit against a co-mortgagor who has redeemed a mortgage, and is therefore subrogated to the position of the mortgagee, brought by the other mortgagors for redemption is governed by Article 148 of the Indian Limitation Act and time begins to run against the plaintiffs from the due date of the mortgage. The case of Jairam v. Bhilaji was dissented from. We consider that this must be the correct view, because it is in accordance with the language of Section 92. If the subrogee has the same rights as the mortgagee, the period of limitation for a suit against him must be the same and not different.

10. One other point was argued in connection with limitation. Mr. Belvadi urged that in the plaint in the suit brought by him in 1931 defendant No. 3 admitted the mortgage and also admitted that the plaintiffs' vendors were among the heirs of the original mortgagor. He seeks therefore to treat this as an acknowledgment of liability under Section 19 of the Indian Limitation Act and so to bring the suit within time. In our view, however, it is not open to the plaintiffs at this stage to advance any such argument. No point of the kind was taken in either of the Courts below. Rule 6 of Order VII of the Code of Civil Procedure provides that where the suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground upon which exemption from such law is claimed. As I say, the point has never been taken and the plaint which is said to contain the admission is not even on the record and has not been proved. That being so, we think it is obvious that the plaintiffs cannot be allowed to take such a point in second appeal.

11. In some ways this may be said to be a case of hardship, because there is no reason to suppose that defendant No. 3 when he brought his suit in 1931 intended to recover the property solely for his own benefit. But the law of limitation is and must be an arbitrary law. It frequently does cause hardship, though that can usually be avoided if people are vigilant about their rights. The plaintiffs might have joined defendant No. 3 in bringing the suit. Had they done so, they would no doubt have obtained a decree in their favour. We are informed that at a later stage of the proceedings they asked to be transferred as co-plaintiffs and the Court disallowed it. Whether that was so or not, the fact remains that they were not plaintiffs. The decree was in favour of the present defendant No. 3 alone and he is entitled as things are to take advantage of the law of limitation in his favour. On our view of Sections 92 and 95 of the Transfer of Property Act this suit was plainly out of time. That being so it is unnecessary to consider the other part of the argument of the learned advocate for the appellant which relates to the share in the property which has been awarded to the plaintiffs.

12. The appeal must be allowed and the suit dismissed with costs throughout, that is to say the plaintiffs must pay the costs of defendant No. 3 throughout. Defendants Nos. 1 and 2 will pay their own costs.


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