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Haji Fatma Bee Vs. Prahlad Singh - Court Judgment

LegalCrystal Citation
SubjectContract;Property
CourtMadhya Pradesh High Court
Decided On
Case NumberSecond Appeal No. 364 of 1977
Judge
Reported inAIR1985MP1
ActsTransfer of Property Act, 1882 - Sections 58 and 62; Madhya Pradesh Land Revenue Code, 1959 - Sections 165; Contract Act, 1872 - Sections 65
AppellantHaji Fatma Bee
RespondentPrahlad Singh
Appellant AdvocateS.P. Khirwadkar, Adv.
Respondent AdvocateP.C. Naik, Adv.
Cases ReferredChhoomal v. Afzal Husain
Excerpt:
.....shall be redeemed within a period of five years, is again incapable of changing the character of mortgage as usufructuary, because such a term may only act as a proviso for redemption. i am, therefore, of opinion that aforesaid terms fixing the time limit for redemption and for the provision that upon failure to redeem within the stipulated time, the mortgage shall be treated as a sale, do not have the effect of converting a mortgage from usufructuary to an anomalous one. the appellant has enjoyed the usufruct, while the respondent has enriched himself by rs. 2400/- stood adjusted against the usufruct enjoyed from the property. 1 am not prepared to accept the argument of the learned counsel for the appellant that the usufruct enjoyed could not be adjusted towards the principal amount..........to secure a sum of rs. 3,000/-. the amount so secured was to be repaid within a period of five years. possession of the property was delivered to the mortgagee, who was to enjoy its usufructs. the mortgage was said to be usufructuary. by an amendment in para 3 of the plaint, it was pleaded that in view of section 165(b) of the m.p. land revenue code, 1959, the mortgage was void, because there was no condition in the mortgage deed that on the expiry of the period mentioned therein, the mortgage shall be deemed to be redeemed in full without any payment whatsoever by the plaintiff respondent as possession was not delivered to the respondent on the expiry of the period mentioned in the mortgage deed, it was pleaded that the mortgagee was liable to account for the profits and usufruct of.....
Judgment:

B.C. Varma, J.

1. This is appeal by the defendant The respondent-plaintiff, vide the registered mortgage deed dt 29-4-1972 (Ex. P-2), mortgaged Khasra Nos. 14, 17 and 18, area 6.63 acres in Sehore District with the appellant, to secure a sum of Rs. 3,000/-. The amount so secured was to be repaid within a period of five years. Possession of the property was delivered to the mortgagee, who was to enjoy its usufructs. The mortgage was said to be usufructuary. By an amendment in para 3 of the plaint, it was pleaded that in view of Section 165(b) of the M.P. Land Revenue Code, 1959, the mortgage was void, because there was no condition in the mortgage deed that on the expiry of the period mentioned therein, the mortgage shall be deemed to be redeemed in full without any payment whatsoever by the plaintiff respondent As possession was not delivered to the respondent on the expiry of the period mentioned in the mortgage deed, it was pleaded that the mortgagee was liable to account for the profits and usufruct of the mortgaged land for a period from 29-4-1972 until the date of delivery of possession. The mesne profits were claimed at the rate of Rs. 600/- per annum from 29-4-1972 to 28-4-1974 and Rs. 1200/- per annum from 29-4-1974 until delivery of vacant possession of the property. The loan was to be adjusted towards this amount due from the appellant to the respondent. The appellant's defence to the suit was that till before 28-4-1977, the respondent had no right to redeem and the suit was, therefore, premature. No profits could be adjusted towards the principal amount. Section 165(b) of the 1959 Code was not attracted, because the mortgage in question was not usufructuary but was anomalous.

2-3. The trial Court held that the respondent had a right to redeem the mortgage at any time within five years and, therefore, the suit filed on 7-5-1974 could not be said to be premature. It was also found that the amount of profits earned by the appellant shall not be appropriated towards the principal amount secured under the mortgage. The respondent was entitled to redeem the mortgage on payment of the mortgaged money. The mesne profits earned could not be appropriated towards the mortgaged money. It was, however, held that the mortgage was void in view of Section 165 (b) of the 1959 Code, but in view of Section 65 of the Contract Act, the parties were liable to return to each other the benefits earned under the contract The final conclusion by the trial Court was that on payment of Rs. 6007- to the appellant, the respondent was entitled to obtain possession of the suit land. The defendant appellant felt aggrieved by this judgment and decree of the lower Court and, therefore, appealed. The lower appellate Court confirmed the finding of the trial Court that the mortgage was usufructuary and was hit by Section 165(b) of the 1959 Code. It was, however, held that as the period of five years from the date of mortgage was to expire on 28-4-1977. the appellant should deliver possession of this property to the respondent mortgagor on 29-4-1977 and also return the mortgage deed making necessary endorsement thereon and upon failure of the appellant to do so, the respondent was held entitled to obtain those reliefs through the process of the Court The defendant-appellant feels aggrieved by this judgment and decree and has therefore, appealed.

4. As the fate of the suit mainly depends upon the finding as to kind of the mortgage, it has first to be seen whether the mortgage in question was usufructuary or anomalous. Section 58(d) of the T.P. Act defines usufructuary mortgage. According to this section, a usufructuary mortgage covers a transaction where the mortgagee is put in possession with the condition that the rents and profits are to be utilized in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest and partly in payment of mortgage-money. The delivery of possession and enjoyment of the usufruct is an incident of ownership to which the usufructuary mortgagee becomes entitled on execution of the security.

5. Ordinarily, a mortgage for a fixed term as distinguished from the one given 'until payment of the mortgage money' would partake the character of an anomalous mortgage. Even in such cases, the question always is whether the condition is not a clog on redemption. In Vaddiparthi v. Cadimsetti, 68 Ind Cas 7l7 : (AIR 1921 Mad 517), it was held that the term in a mortgage with possession that it is redeemable only on expiry of five years and within twenty years from the date of its execution, was a clog on redemption and, therefore, the mortgage was no more than usufructuary. The Division Bench of the Calcutta High Court in Abboy Charan Malo v. Harendra Chandra Mandal AIR 1940 Cal 437 held that fixing of a term for payment of mortgage money would not alter the character of. the mortgage which was otherwise found to be usufructuary. Such a provision, according to the learned Judges, was merely a proviso for redemption. The laying down of a minimum time during which the mortgagor could redeem was held to be quite just in a usufructuary mortgage in view of the provisions of Section 62(b) of the T.P. Act In that case, the term was that the mortgagors undertook to take hack the property on payment of the principal sum in the month of Pous 1323 B.S. It was held that such a term would not take the mortgage out of the category of usufructuary mortgage, if it could he otherwise so held. This Court, following a decision of the Privy Council in Khan Behadur Mehrban Khan v. Makhana, AIR 1930 PC 142, held in Chhoomal v. Afzal Husain, S. A. No. 72/65, dt. 14-2-1965 = 1966 MPLJ (Notes) 181, that an agreement to convert a mortgage into a sale on default of payment within the stipulated period, has,always been regarded as a clog on redemption and for that reason void.

6. The relevant terms of the mortgage, as contained in the mortgage-deed (Ex. P. 2), are these : --

^^vkt ls 5 o'kZ dh vof/k ds fy, jgu fcydCt c'krZ cSa; fcy oQk dj nh vkSj dCtk Hkh eqjrfguk lkfgck dk LFky fo'ks'kij tk;nkn ejgwek dk ns fn;k gSA**

ysfdu jgu dh eqnr esa bl Hkwfe ls gksus okyhvkenkuh Qly vkfn dk gklhy djus dk gd eqjrfguk lkgc dk gksxk D;ksafd tk;nkn jgkfcy dCt Hkh gSA

^^jgu dk :i;k eq- 3OOO] vkt ls 5 o'kZ dh eqnr;kfu 28 vizSy lu~ & 1977 bZLoh rd eSa jkfgreqjrfguk lk- dks vnk djds mDr laiRrh dks eqDr djk ywaxkA vkSj dCtk Hkh gklhy djyqaxkA ysfdu ;fn jgu dh eqnr lekIr gks x;h vkSj 28 vizSy lu~ 1977 bZ-rd dk dqy tks jgu eqjrfguk lkfgc dks eSa jkfgu vnk u dj ldk rks ml n'kk esa mDrlaiRrh blh jde tjs jgu esa osckr ;kuh ns; drbZ gks tk;sxhA

^^ml n'kk esa bl laiRrh dks Qdmj jgu djkus dkgd eq>s jkfgu vFkok esjs lacaf/k;ksa] okjlkuk vkfn dk gd gklhy ugha gksxkA

From these recitals in the deed, it is clear that the mortgage was usufructuary as possession was delivered to the Mortgagee who was to appropriate the usufruct. A time of five years was fixed for redemption. The addition of the term that upon failure to redeem within the stipulated period, the transaction will be deemed to be one of sale being a clog on equity of redemption and, therefore, being void, cannot be given effect to, Similarly, the stipulation that mortgage shall be redeemed within a period of five years, is again incapable of changing the character of mortgage as usufructuary, because such a term may only act as a proviso for redemption. In a usufructuary mortgage, it is proper to have such a term in view of Section 62(b) of the T.P. Act. I am, therefore, of opinion that aforesaid terms fixing the time limit for redemption and for the provision that upon failure to redeem within the stipulated time, the mortgage shall be treated as a sale, do not have the effect of converting a mortgage from usufructuary to an anomalous one. The mortgage, in my opinion, has rightly been held to be usufructuary.

7. Since I have held the mortgage to be usufructuary, it is clear that in view of the provisions of Section 165 of the M.P. Land Revenue Code, 1950, the possession of the property mortgaged has to be given back to the mortgagor i.e., the respondent. Section 165(2)(b) is as follows:

'Subject to the provisions of Clause (a), no usufructuary mortgage of any land by a Bhumiswami shall hereafter be valid if it is for a period exceeding six years and unless it is a condition of the mortgage that on the expiry of the period mentioned in the mortgage deed, the mbrtgagf shall be deemed, without any payment whatsoever by the Bhumiswami to have been redeemed in full and the mortgagee shall forthwith re-deliver possession of the mortgaged land to the Bhumiswami.'

Although the mortgage in question is only for five years and thus, does not exceed six years, but there is no condition in it that on the expiry of that period of five years, the mortgage shall be deemed without any payment to the mortgagor Bhumiswami to have been redeemed in full and the mortgagee shall forthwith deliver the possession of the mortgaged land to the Bhumiswami In the absence of such a condition, the mortgage in question cannot be held to be valid. The mortgagee, therefore, is bound to deliver possession to the mortgagor, i.e., the respondent.

8. The question now is about the relief to be granted to the respondent-plaintiff. I have earlier shown that he is entitled to possession of the mortgaged land The trial Court had directed the respondent to pay Rs. 600/- to the appellant, while directing delivery of possession to him. The lower appellate court, without any cross-objection from the respondent, has further exonerated the respondent even from the liability to pay Rs. 600/-. The view of the Courts below is that in view of Section 165 (b) and (c) of the M P. Land Revenue Code, a period of five years has been thought sufficient in case of a usufructuary mortgage for adjustment of the loan amount out of the usufruct It has, therefore, been held that the sum of Rs. 3,000/- which was secured under the mortgage in question, stood adjusted as the appellant remained in possession for more than six years of the execution of the mortgage. The learned counsel for the appellant could not demonstrate that Section 65 of the Contract Act was not attracted to the transaction in question. Since the mortgage was discovered to be void and is rendered so by force of Section 165 of the M.P. Land Revenue Code, 1965, it will be legitimate to ask the parties to restore the respective benefits which they derive under the contract. The appellant has enjoyed the usufruct, while the respondent has enriched himself by Rs. 3,000/-. The respondent is, therefore, bound to return Rs. 3,000/- and the appellant to return the benefit reaped. The trial Court found that out of this amount of Rs. 3,000/-, Rs. 2400/- stood adjusted against the usufruct enjoyed from the property. The respondent was, therefore, directed to pay Rs. 600/- only and to receive possession. 1 am not prepared to accept the argument of the learned counsel for the appellant that the usufruct enjoyed could not be adjusted towards the Principal amount secured under the mortgage. As the reliefs to the parties are not being granted under the mortgage, but the equities are being adjusted in terms of Section 65 of the Contract Act, this question really does not arise. I am, therefore, of opinion that the adjustments made by the trial Court are perfectly in order. One noticeable feature is that the respondent was satisfied with the decree passed by the trial Court. He did not agitate against it by filing a cross-appeal or cross-objection before the District Judge that he was entitled to Interest or any other amount; and therefore, payment of Rs. 600/- could be squared up against any other amount. In the absence of any cross-objection, the lower appellate Court was not justified in exonerating the respondent even from the liability to pay Rs. 600/- as was determined by the trial Court. To this extent, therefore, the finding of the lower appellate Court has to be set aside.

9. The appeal succeeds and is partly allowed The decree of the lower appellate court is modified to the extent that the appellant shall get Rs. 600/- from the respondent The decree of the lower appellate court is varied to the extent that the respondent is made liable to pay Rs. 600/- to the appellant as directed by the trial court The remaining part of the decree is upheld Under the circumstances, there shall be no order as to costs of this appeal.


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