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Kenchappa Vs. Rokhade Nagappa and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtKarnataka High Court
Decided On
Case NumberAppeal No. 20 of 1950-51
Judge
Reported inAIR1957Kant1; AIR1957Mys1; ILR1956KAR129
ActsLimitation Act, 1908 - Schedule - Article 132; Transfer of Property Act, 1882 - Sections 82, 92, 95 and 100
AppellantKenchappa
RespondentRokhade Nagappa and ors.
Excerpt:
.....plaintiff discharged the priormortgage in instalments and according to the plaintiff's case those payments were made on 27-12-1924, 28-1-1925 and 25-7-1925 .thesuit was filed in october 1938 and these payments were therefore well within 12 years from the date of suit. this was subsequent to the litigation with respect to the first mortgage of 1927 and defendants 1 and 2 were well aware of plaintiff's rights and the effect of the discharge of the decretal debt by him......deed and the suit was more than 12 years although the suit was filed within that period from the date of payment.the material facts either admitted or proved are, that immovable property described in schedule b of the plaint was hypothecated by defendant 3 in favour of defendants 1 and 2 under a registered deed dated 7-6-1927, the plaintiff who was subsequently adopted as a son by defendant 3 filed a suit against him for partition of the family properties and in execution of the decree passed therein, the portion thereof described in the a schedule was allotted to plaintiff and the c schedule to defendant 3.representatives of the mortgages viz., defendants 1 and 2 sued the plaintiff and defendant 3 in o. s. 50/34-35 on the file of the subordinate judge, shimoga, for recovery of the.....
Judgment:

Venkataramaiya, C.J.

1. This appeal has been referred to a Full Bench by the Division Bench before which it was posted for hearing as doubt was felt about the correctness of the view expressed in 47 Mys HCR 337 (A),. on the question of limitation. It was held in that case

'if therefore at the time when the puisne mortgagee sues to enforce the first mortgage by virtue of subrogation a suit by the first mortgagee is barred by time, the puisne mortgagee's suit is equally barred by time. This is the position which is accepted by the Calcutta, Madras and Patna rulings ..... Limitation counts fromthe date on which the money under the first mortgage became due and not from the date on which the subsequent mortgagee paid it off whether the money paid was still due under the mortgage or under a decree obtained on that mortgage'.

Applying this principle, the lower Court has dismissed a suit filed by a person in the position of a co-mortgagor for recovery of amounts paid by him in excess of his liability as the interval between the due date for payment under the mort.-gage deed and the suit was more than 12 years although the suit was filed within that period from the date of payment.

The material facts either admitted or proved are, that immovable property described in Schedule B of the plaint was hypothecated by defendant 3 in favour of defendants 1 and 2 under a registered deed dated 7-6-1927, the plaintiff who was subsequently adopted as a son by defendant 3 filed a suit against him for partition of the family properties and in execution of the decree passed therein, the portion thereof described in the A schedule was allotted to plaintiff and the C schedule to defendant 3.

Representatives of the mortgages viz., defendants 1 and 2 sued the plaintiff and defendant 3 in O. S. 50/34-35 on the file of the Subordinate Judge, Shimoga, for recovery of the mortgage-debt. The suit finally came to an end by a decision of the High Court in R. A. No. 95/36-37 and to avert the sale of the mortgaged property for realisation of the decree debt, the plaintiff made payments from time to time between 1944 and 1948 in full satisfaction of the decree. The present suit wasinstituted, on 21-1-1949 for recovery of Rs. 4306-10-0 by sale of C schedule property, on the ground of its being subject to liability to that extent.

2. Several issues were framed in the case and the findings on these are all in plaintiff's favour. There is no dispute about the correctness of the amount or its being a charge on the C schedule property. The suit has been dismissed on the sole ground of being barred by time. The question of limitation, on the determination of which the decision depends, is not raised in issue and the omission of this is regrettable but not material as both parties have directed their attention to it as the lower Court has given consideration to it.

3. It is conceded that Article 132, Limitation Act governs the case, put the controversy is about the starting point, the date from which time is to run. If it is the date of the mortgage as considered by the lower Court, the dismissal of the suit is justified as it was filed beyond 12 years prescribed by the Article.

The lower Court (SIC) relying on 47 Mys HCR 337 (A), has failed to notice the distinguishing features of a claim of a co-mortgagor in comparison with that of a puisne mortgagee with which that case was concerned and has overlooked decisions relating to the time available to a co-mortgagor for enforcing his right.

The view that the period is to be reckoned from the date of mortgage when the suit is by the puisne mortgagee for the amount paid towards an earlier mortgage is based on the consideration that as a result of such payment the puisne mortgagee is an assignee of the mortgage and as such bound by its terms and conditions. A co-mortgagor cannot be said to be in an exactly identical position.

The discharge of the mortgage does not confer on him all the rights of the mortgagee and gives him the right to proceed against part of the mortgaged property (since what is this is excluded) and part of the amount paid (excluding what was payable by him). As pointed out in --'Aziz Ahmad Khan v. Chhote Lal' : AIR1928All241 .

''Where a suit is brought to enforce a contribution, which is based on the maxim 'equity is equality', it is only partially right to say that the party making the payment and relieving the co-mortgagor's property from burden is subrogated o the position of the mortgagee. It is clear that he cannot enforce the right of the mortgagee to sell all or any of the properties to realise the entire money recoverable by him.

The mortgagee would be entitled, without any restriction, to enforce the payment of the entire mortgage-money against any one of the properties he might choose to proceed against; but the mortgagor seeking contribution has to exempt his own property (if it has not 'been sold) and must bear a proportionate part of the mortgage-money. Then, he has to split up his claim and must ask for a proportionate payment from the owners of the retaining properties.

Properties would contribute, some more and others less, according to the respective values of the properties. Thus it is clear that a co-mortgagor seeking contribution is not exactly in the same position, in all respects, as the mortgagee whom he has redeemed.'

Besides the right of subrogation under Ss. 92 and 95 subject to the qualifications mentioned above, the co-mortgagor by discharging the mort-gage also acquires a right of contribution under Section 82, Transfer of Property Act and the amount recoverable will be a charge on the property of the persons benefited from payment and enforceable under S. 100 of the Act.

These are remedies independent of each other and not mutually exclusive. His right to contribution under S. 82 of the Act on the basis of the value of properties is clear and this entitled him to get only what is paid in addition to the amount due by him in view of the decisions of the Supreme Court, -- 'Kidar Lall v. Hari Lall' : [1952]1SCR179 , and -- 'Ganeshi Lal v. Joti Pershad : [1953]4SCR243 .

4. As regards the , time within which the charge may be enforced the observations at page 581 of 50 All 569: (at p. 245 of AIR 1928 All 240 (B), are

'there can be no doubt that where a right of contribution exists, that right comes into play only when a payment is made. It would be absurd to say that although the right to exact contribution arose ............ on 19-7-1916, the limitationagainst him had begun to run on 23-9-1899, (the date of the mortgage), and that it had already been time barred on 23-9-1911, i. e., even before the right accrued.'

The decisions of the Calcutta and Patna High-Courts stated in 47 Mys HCR 337 (A), to be of support for the disposal of that case are not adverse to the appellant. -- 'Alam Ali v. Beni Charan' : AIR1936All33 , was a case in which a property was subject to three simple mortgages and the question was whether third mortgagee could set up in a suit by second mortgagee, right of subrogation for the amount paid in discharge of the decree in the suit by the first mortgagee, even though the suit on the first mortgage would now be barred.

The opinion of the Full Bench was that limitation of 12 years would run under Article 132 from the date when the decretal amount was paid off and the statutory right acquired. This is definitely opposed to the ruling in '47 Mys HCR 337 (A)'. It is laid down' by a Full Bench in -- 'Brij Bhukhan v. Bhagwan Datt' AIR 1942 Oudh 449 (F), that the period has to be computed for a suit of the present kind from the date of payment and not from the date of mortgage.

In 'Umar Ali v. Asmat Ali' : AIR1931Cal251 , the question of limitation was considered by a Bench of five learned Judges and the earlier decision in--' Rajkumari Debi v. Mukundalal', AIR 1921 Cal 166 (H), that the time begins to run from the date of the mortgage was overruled. The Patna High Court has reiterated the same view after consideration of the statutory provision and cases bearing on the point in a number of decisions (See 'Sheosaran Singh v. Ania Co-op. Credit Society Ltd. AIR 1945 Pat 192 (I); and 'Rameshwar Pd. Missir v. Ramnath Khemka' : AIR1950Pat174 .

5. There is no want of authority in our own Court to treat the suit as being filed within time. In the same Volume, 47 Mys HCR, there is a decision at page 515 (K), to help the appellant. The facts stated at page 528 are:

'......... .The plaintiff discharged the priormortgage in instalments and according to the plaintiff's case those payments were made on 27-12-1924, 28-1-1925 and 25-7-1925 ............ Thesuit was filed in October 1938 and these payments were therefore well within 12 years from the date of suit. On the authority of 40 Mys H C R 298 (M) ............ It must be held thatthe period of limitation within which the plaintiff could enforce his right to contribution ran from the dates of the several payments above mentioned beginning with 27-12-1924 and that the suitbeing within 12 years from those payments is not time-barred. In this view, it is unnecessary to consider whether in a case of subrogation pure and simple the period of limitation is that applicable to the original incumbrance or whether it Starts from the date of payment by the subsequent mortgagee.'

6. In another case reported at page 530 (L), in the same volume it was held that when a mortgage is renewed by means of another, the period of limitation runs from the date of the latter and not of the former. There is thus preponderance of judicial opinion in favour of the view that the starting point of limitation under Article 132, Limitation Act for a contribution by a co-mortgagor is the date on which he pays off the mortgage-debt and not the date on which the debt fell due. Statements suggesting anything to the contrary in 47 Mys HCR 337 (A), are therefore incorrect and overruled.

7. Sri M. K. Srinivasa Iyengar finally urged on behalf of defendants 1 and 2 that though there is no bar of time for the enforcement of the charge on the property under S. 100 of the Act it cannot be availed of against bona fide transferee for value. This contention of defendants 1 and 2 is put forward on the strength of a sale in their favour of the property in execution of a decree obtained by them for recovery of amount due under a mortgage deed executed by defendant 3.

Plaintiff who was impleaded in that case intervened and by consent a decree was passed for realisation of the debt by sale of the C schedule property belonging to the father. This was subsequent to the litigation with respect to the first mortgage of 1927 and defendants 1 and 2 were well aware of plaintiff's rights and the effect of the discharge of the decretal debt by him.

Defendants 1 and 2 cannot profess to have been ignorant of the liability of C schedule property for rateable contribution towards the debt. Having purchased it with knowledge of what had transpired and the consequences of purchase they are not entitled to claim exemption of C schedule property from liability.

8. The decree of the lower Court is, therefore, set aside and the suit is decreed as prayed for. Time for payment three months from this date. The appellant will have his costs both here and in the Court below.

9. Appeal allowed.


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