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Gangaram Madhav Ahir and anr. Vs. Dwarkibai W/O Wasudeo - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMadhya Pradesh High Court
Decided On
Case NumberSecond Appeal No. 300 of 1952
Judge
Reported inAIR1960MP44
ActsTransfer of Property Act, 1882 - Sections 68; Code of Civil Procedure (CPC) , 1908 - Order 34, Rule 5
AppellantGangaram Madhav Ahir and anr.
RespondentDwarkibai W/O Wasudeo
Appellant AdvocateS.D. Sanghi, Adv.
Respondent AdvocateG.M. Chaphekar, Adv.
DispositionAppeal allowed
Cases ReferredEconomic Life Assurance Society v. Osborne
Excerpt:
.....said that by mere failure on his part to execute the decree for sale within the period of time his right to possession had come to an end by any process known to law. in a subsequent suit the house of lords held that that judgment had not extinguished the security, and so the mortgagees were entitled to retain possession until the full amount of the principal with interest at 5 per cent, had been made good to them in accordance with the terms of the deed. ' 7. from this decision in 1902 ac 147 and by the subsequent decisions of the english courts in which that decision was followed it was held by the learned additional judicial commissioner that the rights under the mortgage arc not necessarily extinguished by reason of the fact that the mortgagee who had obtained a decree on his..........came to the conclusion that the right to redeem disappears when a final decree is passed in a suit for sale and that after the decree in a mortgage suit whatever the form of that decree, whether for foreclosure or sale or redemption, the parties to the mortgage and to the suit and their legal representatives or assignees cannot maintain in future any separate suit or any claim arising out of the mortgage.he therefore held that the defendant's right to possession had come to an end by reason of the circumstance that the decree obtained by defendant no. 1 against the plaintiff on the basis of the mortgage for sale of the mortgaged property had become barred by time and that for that reason the plaintiff was entitled to possession. he however held that on equitable considerations it.....
Judgment:

V.R. Newaskar, J.

1. This second appeal arises out of a plaintiffs suit for possession of land bearing Khasra No. 208 measuring 0.37 acres situated in Mouja Borawa and in respect of which the plaintiff held a Patta. According to the plaintiff she had mortgaged the land in question with defendant No. 1 under a deed of usufructuary mortgage dated 12-9-1923 and had given over possession only of a portion of the mortgaged property measuring 0.17 acres. The defendant No. 1 had filed a suit against her in the Munsiff's Court at Mandleshwar on the basis of that mortgage and had secured a decree on 30-4-1937.

The decree directed her to pay Rs. 100/- to defendant No. 1 by 30-6-1937 and on her failure to do so the mortgaged property might be sold and the defendant No. 1 might be awarded Rs. 100/- out of the sale-proceeds thereof. She failed to pay Rs. 100 as directed in the decree and a final decree for sale therefore was passed on 26-9-1938. The decree remained unexecuted for over 12 years and defendant No. 1's right to file execution for sale of the mortgaged property came to an end on 25-9-1950.

She, according to her, had become entitled to possession of the said property. She therefore on the basis of the aforesaid allegations claimed possession of the land measuring 0.17 acres which, according to her, was in defendant's possession in pursuance of the mortgage. Defendant No. 2 who is the brother of defendant No. 1 was impleaded on the ground that the disputed property is in actual possession of both of them.

2. Defendants Nos. 1 and 2 contested the plaintiff's case on various grounds, including the extent of the property said to be in their possession in pursuance of the mortgage.

3. The trial Court dismissed the plaintiffs suit as not maintainable. He also gave findings with regard to the other issues that were raised in the case. For the purpose of the present appeal it is not necessary to refer to all those findings.

4. On appeal the learned District Judge relying upon the decision reported in AIR 1926 Mad 816, Ellarayan v. Rangaswami, came to the conclusion that the right to redeem disappears when a final decree is passed in a suit for sale and that after the decree in a mortgage suit whatever the form of that decree, whether for foreclosure or sale or redemption, the parties to the mortgage and to the suit and their legal representatives or assignees cannot maintain in future any separate suit or any claim arising out of the mortgage.

He therefore held that the defendant's right to possession had come to an end by reason of the circumstance that the decree obtained by defendant No. 1 against the plaintiff on the basis of the mortgage for sale of the mortgaged property had become barred by time and that for that reason the plaintiff was entitled to possession. He however held that on equitable considerations it was incumbent upon the plaintiff to pay to the defendant whatever he was liable for under the mortgage, He therefore granted a decree for possession on condition of the plaintiff paying Rs. 100/- to the defendant.

5. This is a second appeal against that 'decision. Mr. Sanghi for the appellants contended that in the first place the decision relied upon by the learned Judge is not an authority for the proposition that in case the mortgage-decree-holder's right to execute the decree had become barred by time his right to possess the mortgaged property under a usufructuary mortgage extinguishes and the mortgagor acquires right to possession. In the second place he contends that the decisions, in AIR 1933 Nag 241, Ramshankar v. Gulabshankar; AIR 1941 Mad 737, Ramaswami v. Kesavan and ILR (1939) Nag 310: (AIR 1937 Nag 196), Raghunath v. Krishna Rao, do suggest that the observations in AIR 1926 Mad 816 relied upon by the lower appellate Court namely after the decree in a mortgage suit, whatever the form of that decree, whether for foreclosure, sale or redemption, the parties to the mortgage and to the suit and their legal representatives or assignees cannot maintain in future any separate suit or any claim arising out of the mortgage', cannot be said to lay down the correct proposition of law.

He contended that the plaintiff bad effected a usufructuary mortgage in favour of the defendant and had parted with her possession. The defendant was in possession in pursuance of his right of the mortgage. That right to possession, which was Validly created ought legally come to an end in order that the plaintiff could succeed on the basis of title. It cannot be said that by mere failure on his part to execute the decree for sale within the period of time his right to possession had come to an end by any process known to law.

6. I think the contention raised by the learned counsel for the appellants is correct and the decree awarded by the Court below for possession of the property which is the subject matter of the suit cannot be upheld. In AIR 1933 Nag 241, Bose, Additional Judicial Commissioner, observed that:

'It was once thought, because of the decision In re European Central Railway Co.; Ex Parte Oriental Financial Corporation, (1886) 4 Ch D 33, that when a charge merged in a judgment, the highest kind of security known to the law, then it was extinguished. Rut the House of Lords corrected this impression in Economic Life Assurance Society v. Osborne, 1902 AC 147. Lord Davey pointed out that the judgment only barred a personal action on the covenant; it did not extinguish the security. The mortgage in that case was a possessory one. The mortgagor agreed in the deed to repay the principal sum by a day named, and if it was not then paid, to pay interest at 5 per cent, upon so much of principal as remained unpaid. There was also a clause for redemption. It proved that the mortgagees were entitled to possession until the principal and interest were fully paid in accordance with those stipulations. The mortgagors defaulted and were sued upon the covenant. A decree was passed against them in due course which carried future interest at 4 per cent, and not 5 per cent. In a subsequent suit the House of Lords held that that judgment had not extinguished the security, and so the mortgagees were entitled to retain possession until the full amount of the principal with interest at 5 per cent, had been made good to them in accordance with the terms of the deed.'

7. From this decision in 1902 AC 147 and by the subsequent decisions of the English Courts in which that decision was followed it was held by the learned Additional Judicial Commissioner that the rights under the mortgage arc not necessarily extinguished by reason of the fact that the mortgagee who had obtained a decree on his mortgage had failed to execute it within time.

8. The principle enunciated in the House of Lords' case as also in AIR 1933 Nag 241, is sufficient for upholding the defendant's contention that his right to possession cannot be said to have extinguished merely by reason of the circumstance that the claim for execution of his decree for sale on the basis of the mortgage could not be enforced by reason of the lapse of time. In ILR (1939) Nag 810: (AIR 1937 Nag 196) Pollock J., held that under Order 34, Rule 5, C. P. C., as amended in 1929, a decree for sale does not extinguish the equity of redemption until the sale is confirmed. Where the sale does not take place it cannot be said that the right of redemption is lost.

It is abundantly clear and is not disputed by the learned counsel for the plaintiff that the plaintiff's right of redemption has not come to an end. The decision in AIR 1941 Mad 737, indicates that that High Court accepted the principle to be correct viz. that a usufructuary mortgagee who enters into possession under a contract of mortgage does not change the character of his possession by his obtaining a decree on the basis of the mortgage. That in a way confirms the principle that after the merger in the higher security the lower security is not lost in all cases.

9. Having regard to the principle enunciated in these three cases viz. AIR 1933 Nag 241; ILR 1939 Nag 310: (AIR 1937 Nag 196) and AIR 1941 Mad 737, it is plain that the defendant's right to continue in possession of the property has not been extinguished by any process known to law and further merely by reason of the existence of a degree for sale remaining unexecuted during the period of limitation provided therefore by law the mortgagor does not acquire an unfettered title to the property to support his suit for possession as against the usufructuary mortgagee.

10. The learned lower appellate Court's view that the plaintiff, before obtaining possession, should pay the amount of debt Rs. 100/- borrowed under the mortgage on what he called equitable principle is not supported by any authority and cannot be said to be justified on the frame of the suit as it was. If his view was that the defendant's right had been lost under the mortgage there was no justification for him to make the decree conditional upon the plaintiff paying the amount of the decree namely Rs. 100/-. In my opinion the suit, as it is framed, is not entitled to succeed.

11. The appeal is therefore allowed and plaintiffs suit for possession is dismissed with costs throughout.


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