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B.T. Kempanna Vs. T. Krishnappa and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 134 of 1967
Judge
Reported inAIR1973Kant58; AIR1973Mys58; (1972)2MysLJ385
ActsTransfer of Property Act, 1882 - Sections 101; Limitation Act, 1908 - Schedule - Articles 91 and 141
AppellantB.T. Kempanna
RespondentT. Krishnappa and ors.
Appellant AdvocateV. Krishna Murthy, Adv. for S.V. Raghavachar, Adv.
Respondent AdvocateK.R. Karanth, ;Lalitha Janardhan and ;Prahaladarao, Advs.
DispositionAppeal allowed
Excerpt:
.....should govern the present case are not very much in dispute and are well settled. as already stated the only remedy of the reversioners was to have filed a suit for recovery of possession within a period of 12 years from the date of the death of sampamma, that having not been done the suit filed by the plaintiff for redemption of mortgage was clearly unsustainable. so the suit filed by the plaintiffs for redemption of the alleged mortgage was clearly unsustainable as there was no mortgage in existence after 1918. inthat situation, it is clear that the view taken by the learned appellate judge is not sound and is therefore required to be set aside......for the benefit of others. the result, therefore, would be that if after the mortgage there is a sale of equity of redemption or the purchase of the property by the mortgagee himself, it would be clear that there will be an extinguishment of the mortgage or mortgage will be treated to have merged in the sale, with the result that the mortgage is extinguished. this wouldbe the position unless any contrary intention is proved.17. it would be also necessary in this connection to refer to the two other decisions which are cited by shri v. krishna murthy. which have a direct bearing on the question which arises for consideration in the present case. the first is the judgment of the supreme court in the case of padma vithoba v. mohd. multani. (air 1963 sc 70). in that case, it was held as.....
Judgment:

H.B. Datar, J.

1. 4th defendant in O. S. No. 808 of 1957 on the file of the Additional I Munsiff. Bangalore, is the appellant in this appeal. That suit was instituted for redemption of the mortgage of the suit schedule property, for accounts and for other reliefs. The case of the plaintiff was that the property belonged originally to one Ramanna son of Dankanikote Naranappa. He died some time in the year 1905 leaving behind him his widow Sampamma. Sampamma died on 4-2-1919. The case of the plaintiff is that after the death of Sampamma. the property vested in the reversioners and the plaintiff having purchased the property by a registered sale deed on 28-12-1955 for a valuable consideration subject to the mortgage was entitled to claim redemption. It is also alleged that during the lifetime of Sampamma. she executed a registered deed of mortgage in favour of Munimuthappa and defendant 1 being the son of Munimuthappa was liable to account. It is necessary to note that the plaintiff did not assail the validity of the mortgage. On the contrary, the validity of the mortgage was accepted and the suit was filed for redemption on that basis.

2. Defendant 1 raised several contentions. It was contended that after the mortgage was executed in favour of Munimuthappa. father of defendant 1 in 1910. on 20-9-1918. Sampamma sold the property to defendant 1 for Rs. 1.500/-. and therefore, defendant 1 has become the owner of the plaint schedule property and that he is in possession and enjoyment of the same in his own right since 20-9-1918. It was further alleged in paragraph 4 of the written statement of defendant 1 that the mortgage with possession has merged into the sale and the mortgage is no longer subsisting and the suit was not maintainable.

3. In the reply statement filed by the plaintiff, it was stated that Sampamma had not redeemed the mortgage and the sale of the property if any, was fraudulent, collusive and nominal transaction and not supported by consideration. It was also stated that there was no legal necessity nor was there the benefit of the estate. It was therefore stated that defendant 1 has not become the full owner by virtue of the alleged sale and so defendant 1 must be deemed to be in possession only as a mortgagee and plaintiff having purchased the equity of redemption was entitled to redeem.

4. The trial Court framed several Issues and the relevant issues which are necessary to be stated are issues 2. 3 and 4 and they are as under:

'2. Is the sale of the suit schedule property by Sampamma to the first defendant for Rs. 1,500/- subject to the mortgage dated 20-1-1919?

3. Is the first defendant in possession and enjoyment of the suit schedule property in his own right since 20-9-1918?

4. Is the mortgage still subsisting or is it merged in the sale?

5. On a full consideration of the oral and documentary evidence, the learned trial Judge held that as a result of the sale on the 20th of September, 1918, the mortgage was merged in the sale and plaintiff was not entitled to claim redemption. The suit of the plaintiff was therefore dismissed.

6. The correctness of this judgment was challenged before the appellate court and the learned II Additional Civil Judge. Bangalore City, in R. A. No. 234/64. allowed the appeal, set aside the decision of the trial court and decreed the plaintiff's suit by his judgment dated the 15th of December 1966. It is the correctness of this decision that is challenged in the present second appeal.

7. The principles of law that should govern the present case are not very much in dispute and are well settled. I will therefore briefly refer to the authorities cited by both the learned advocates.

8. The first decision to which my attention is invited is the judgment of the Privy Council in the case of Bijoy Gopal Mukerji v. Krishna Mahishi Debi (1907) ILR 34 Cal 329). In that case, it was laid down that

'A suit by a reversioner on the death of a Hindu widow to recover immoveable property of her husband, of which she was in possession for a widow's estate as his heir and of which she had granted a lease for a term extending beyond her own life, is governed by the 12 years' period of limitation provided by Article 141 of Schedule II of the Limitation Act. and not by the 3 years' period prescribed by Article 91.' It was further held that. 'Her alienation is not absolutely void, but it is prima faice voidable at the election of the reversionary heir, who may affirm it or treat it as a nullity without the intervention of any court, there being nothing to set aside or cancel as a condition precedent to his right of action.'

At page 333. the position of law was further explained in the following words:

'A Hindu widow is not a tenant for life, but is owner of her husband's property subject to certain restrictions on alienation and subject to its devolving upon her husband's heirs upon her death, But she may alienate it subject to certain conditions being complied with. Her alienation is not therefore, absolutely void, but it is prima facie voidable at the election of the reversionary heir. He may think fit to affirm it or he may at his pleasure treat it as a nullity without the intervention of any Court, and he shows his election to do the latter by commencing an action to recover possession of the property. There is in fact, nothing for the Court either to set aside or cancel as a condition precedent to the right of action of the reversionary heir.'

9. This is also what has been laid down by the Patna High Court in the case of Ram Sumran Prasad v. Gobind Das, (AIR 1922 Pat 615 (SB)). In that case it was stated that

'In a suit for recovery of possession from the donee of the widow, the reversioner is not bound to ask for declarfitipn. The reversioner might at his option affirm the alienation or treat it as a nullity without the intervention of any Court leaving it to the defendants to plead and prove the circumstances which they relied on for showing that the gift, lease, or any derivative dealings were not in fact voidable but were binding on the reversionary heirs.'

10. The Supreme Court in the case of Mummareddi Nagi Reddi v. Duariraja Naidu : [1951]2SCR655 has affirmed this view. It was held that 'A reversioner's suit for recovery of possession of the property alienated by a widow is governed by Article 141. Limitation Act, and as it is not necessary that transfer should be set aside before any decree for possession is made, all that is necessary is that the reversioner should file a suit for possession within 12 years from the death of the widow and a decree passed in such a suit must be on the basis that possession of the transferee was unlawful ever since the widow died.'

11. Thus, what is clear is that a reversioner is not bound to file a suit for cancellation of the sale deed and it is open to him either to accept the transaction made by the widow or to file a simple suit for recovery of possession andinstitution of the suit itself amounts to election to treat the sale as a nullity. The reversioner therefore, has to institute, a suit for possession and that for possession has to be filed within a period of 12 years from the date of the death of a Hindu widow.

12. The question as to the effect of a sale of the property or transfer of the equity of redemption in favour of the mortgagee has been dealt with by the learned author Mulla in his book Transfer of Property Act -- Fifth Edition, at page 632. This is what has been stated:

'When the mortgagee purchases the equity of redemption and acquires ownership he may keep the mortgage alive for his own defence as against a puisne incumbrancer. He is entitled to remain in possession until the subsequent mortgagee has redeemed the prior mortgagee irrespective of the question of limitation, on the prior mortgage. He can use the equity of redemption by Way of attack also. But the mortgage Is nevertheless extinguished as between the mortgagee and the mortgagor or as between the mortgagee and a stranger.' Again at page 433. the following proposition has been stated:-- 'The section does not refer to the extinction of the equity of redemption by operation of law. This may occur by merger when the mortgagee acquired the equity of redemption by inheritance.'

13. The Privy Council in the case of Dulhin Lacchanbati Kumari v. Bodh Nath Tiwari (AIR 1922 PC 941. held that

'Merger is not a thing which occurs ipso jure upon the acquisition of what may be called the superior with the inferior right. There may be many reasons -- conveyancing reasons, arising out of the object of the acquisition of the one right being merely for a temporary purpose, family reasons and others in the case of Which the expediency of avoiding the coalescence of the interest and preserving the separation of title may be apparent. The question to be settled in the application of the doctrine is: wag such a coalescence of right meant to be accomplished as to extinguish that separation of title which the records contain.'

14. The Patna High Court In the case of Someshwari Prasad v. Maheshwari Prasad. (AIR 1931 Pat 426) has laid down the same proposition of law which is evidenced from the summary of the decision appearing in the head note of the said case, which is to the following effect:

'Merger is a thing which occurs ipso jure upon the acquisition of the superior with the inferior right and there may be many reasons in the course of which the expediency of avoiding the coalescence of interest and preserving separation of title may be apparent.

Where the absolute owner of an estate becomes also the owner of a charge thereon, in absence of any intention express or presumed on his part, merger or extinguishment of title will take place. When the keeping alive of the charge is for benefit of the owner, it should be presumed that his intention is to keep alive.'

15. To the same effect is the judgment of the former High Court of Mysore in the case of S. Nanjunda Setty v. Silni Venkatachar. (AIR 1953 Mys 122), It has been held in that case that

'There is no prohibition for a mortgagee being the purchaser of the property mortgaged to him and the effect of the purchase is to bring about a merger of rights as mortgagee with those of purchaser except in relation to a puisne mortgagee under Section 101, Transfer of Property Act.'

A passage from the T. P. Act by the learned Author Mulla has been quoted and the Court further held that

'The provision of the keeping alive of the mortgage is intended for the benefit of the mortgagee and since the plaintiff is not either a puisne mortgagee or a stranger he cannot in spite of the sale contend that the equity of redemption is not lost.'

16. It Is also necessary to set out the provisions of Section 101 of the Transfer of Property Act as it existed prior to its amendment in the year 1929 and it reads as under:

'Where the owner of a charge or other incumbrance on immoveable property is or becomes absolutely entitled to that property, the charge or incumbrance shall be extinguished, unless he declares, by express words or necessary implication, that it shall continue to subsist, or such continuance would be for his benefit.'

The position, therefore, is that when the mortgagee purchased the equity of redemption, then the mortgage becomes merged with the sale and the result is that there is extinguishment of the mortgage. It is also established that unless the mortgagee declares either by express words or by necessary implication that the mortgagee shall continue to subsist it will not continue. It is also necessary to remember that the provision for continuation was made for the benefit of the mortgagee and not for the benefit of others. The result, therefore, would be that if after the mortgage there is a sale of equity of redemption or the purchase of the property by the mortgagee himself, it would be clear that there will be an extinguishment of the mortgage or mortgage will be treated to have merged in the sale, with the result that the mortgage is extinguished. This wouldbe the position unless any contrary intention is proved.

17. It would be also necessary in this connection to refer to the two other decisions which are cited by Shri V. Krishna Murthy. which have a direct bearing on the question which arises for consideration in the present case. The first is the judgment of the Supreme Court in the case of Padma Vithoba v. Mohd. Multani. (AIR 1963 SC 70). In that case, it was held as follows:

'When a person gets into possession of properties as mortgagee he cannot by any unilateral act or declaration of his prescribe for a tiltle by adverse possession against the mortgagor, because in law his possession is that of the mortgagor. But if the mortgagor and mortgagee subsequently enter into a transaction under which the mortgagee is to hold the properties thereafter, not as a mortgagee, but as owner that would be sufficient to start adverse possession against the mortgagor if the transaction is for any reason inoperative under the law. Thus if the owner of the mortgaged property is a minor at the time of entering into transaction of sale with the mortgagee the possession of the mortgagee which is lawful at its inception cannot become adverse to the minor who is in law incapable of giving consent to the arrangement entered into with the mortgagee.'

18. In the later decision of the Supreme Court in the case of Soni Lalji Jetha v Soni Kalidas Devchand. : [1967]1SCR873 , this is what has been laid down:

'A mortgagee in possession under the terms of mortgage cannot by merely asserting rights of ownership in the mortgaged property, convert his possession as mortgagee into possession hostile to the mortgagor. But the mortgagor can sell the mortgaged property to his mortgagee and thus put the mortgagee's estate to an end and thereafter all the right, title and interest in the property would vest in the mortgagee. Such a sale would be valid and binding as between them and henceforth the character of possession as a mortgagee would be converted into possession as an absolute owner. Even if such a sale is held to be voidable and not binding on a subsequent purchaser the character of possession based on assertion of absolute ownership by the mortgagee does not alter, and if that possession continues throughout the statutory period it ripens into a title of the property.'

19. In the present case, the validity of the mortgage of 1910 is not questioned. The widow has subsequent to the mortgage transferred the equity of redemption to the mortgagee. When equity of redemption was transferred to defendant 1 it was open to him to keep it alive for his own defence. Even though the question as to whether there is coalescence of interest has to be determined on the basis of all the material, there is nothing in this case to avoid the coalescence of interest. Not one reason has been stated or proved to show separate preservation of title. There is no material placed to show that it was kept alive. In the absence of proof of any intention it has to be held that merger has taken place. Further, the present sale transaction having taken place in 1918 and the mortgage being of the year 1910. it cannot be disputed that it is the provisions of unamended section that govern the matter under the unamended provisions of Section 101 of the T. P. Act. it must have been preserved expressly or by, necessary implications.

20. After the death of Sampamma in the year 1919. within a period of 12 years, it was open to the reversioners to have instituted a suit for recovery of possession. The reversioners could ignore the sale and treat it as nullity and file a suit within 12 years. Such a suit for possession has not been instituted and such relief is not asked for by any one till now. Therefore, so far as the claiming of any relief based on the ground that the sale is a nullity is concerned it is barred and the suit for recovery of possession would be untenable. Further, as laid down by their Lordships of the Supreme Court in Soni Lalii Jetha's case : [1967]1SCR873 , that when the mortgagor sells the mortgage property and put the mortgagee's estate to an end all the right, title and interest in the property would vest in the mortgagee, and even if such a sale is voidable and not binding, if the original mortgage purchaser continued in possession throughout the statutory period it ripens into a title to the property. In the present case, the property was sold in the year 1918. no action was taken until the year 1957. i. e., nearly for 39 years. It is therefore, clear that in any event the title of defendant-1 has ripened into one of ownership. As already stated the only remedy of the reversioners was to have filed a suit for recovery of possession within a period of 12 years from the date of the death of Sampamma, that having not been done the suit filed by the plaintiff for redemption of mortgage was clearly unsustainable. It appears to me that as the claim of the reversioners and their purchasers was barred by limitation, the plaintiffs have adopted this device of filing a suit for redemption of mortgage, which as already stated, is already extinguished. So the suit filed by the plaintiffs for redemption of the alleged mortgage was clearly unsustainable as there was no mortgage in existence after 1918. Inthat situation, it is clear that the view taken by the learned appellate Judge is not sound and is therefore required to be set aside.

21. In the result- this appeal is allowed, the judgment and decree passed by the learned appellate Judge are set aside and that of the trial Court are restored. In the circumstances, parties will bear their own costs in all the three courts.


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