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Sheobalak Misra and ors. Vs. Suraj Prasad and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 239 of 1951 and Misc. Appeal Nos. 30 and 49 of 1949
Judge
Reported inAIR1953Ori17; 18(1952)CLT362
ActsCode of Civil Procedure (CPC) , 1908 - Sections 11 and 100 - Order 34, Rule 7; Transfer of Property Act, 1882 - Sections 58 and 60; Limitation Act, 1908 - Schedule - Article 144; Debt Law; Orissa Money-lenders Act, 1939 - Sections 17; Orissa Money-lenders (Amendment) Act, 1947
AppellantSheobalak Misra and ors.
RespondentSuraj Prasad and ors.
Appellant AdvocateP. Misra and ;P.C. Chatterji, Advs.
Respondent AdvocateM.S. Rao, Adv.
Cases ReferredPurushottam Das v. De
Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot.....panigrahi, j.1. these three appeals arise out of a suit for redemption brought by the heirs and representatives of one dhunilal tewari of jharsuguda in sambalpur district, who died on the 3rd june 1934 leaving his widow mst. rajarani as his heir to the suit properties. she died issueless a few months later in the year 1935. in 1936, dhunilal's brother, lalita prasad tewari, filed title suit no. 38 of 1936, in the court of the subordinate judge, sambalpur, against the defendants in the present suit and durga prasad misra (since deceased), alleging that they were in wrongful possession of the suit lands and praying for a declaration of their title to and recovery of possession of the suit lands as well as some other lands from the defendant.the allegation made by him in the plaint was that.....
Judgment:

Panigrahi, J.

1. These three appeals arise out of a suit for redemption brought by the heirs and representatives of one Dhunilal Tewari of Jharsuguda in Sambalpur district, who died on the 3rd June 1934 leaving his widow Mst. Rajarani as his heir to the suit properties. She died issueless a few months later in the year 1935. In 1936, Dhunilal's brother, Lalita Prasad Tewari, filed Title Suit No. 38 of 1936, in the Court of the Subordinate Judge, Sambalpur, against the defendants in the present suit and Durga Prasad Misra (since deceased), alleging that they were in wrongful possession of the suit lands and praying for a declaration of their title to and recovery of possession of the suit lands as well as some other lands from the defendant.

The allegation made by him in the plaint was that the defendants had trespassed on the suit lands subsequent to the death of Mst. Rajarani and were liable to be ejected. The plea of the defendants was that Dhunilal had borrowed a sum of Rs. 1000/- from them sometime in the year 1919 and had mortgaged the suit lands to them with possession, under an oral mortgage. They also set up an oral gift of the equity ofcorrectness of the District Judge's order. M. A 40 of 1949 is an appeal by the defendants claiming a higher amount towards mesne profits than that awarded by the District Judge.

3. The second appeal and the two miscellaneous appeals were heard together and are disposed of by this judgment.

4. The plaintiffs' case in the present litigation is that they were not aware of the conditition imposed by the High Court that they should pay Rs. 1000/- towards the mortgage amount due to the defendants who were treated as mortgagees in possession, and that the decision of the High Court in Second Appeal 143 of 1940 did not in any way extinguish their right to redeem the property. They further alleged that by reason of the fact that the mortgagee-defendants had remained in possession from 1919 (the date when the mortgage-debt was incurred by Dhunilal) till 1941 (where the plaintiffs took possession) the mortgage-debt must be deemed to have been statutorily discharged by virtue of the provisions of Section 17 of the Orissa Moneylenders' Act (Orissa Act III of 1939 as amended in 1947). They accordingly prayed for redemption and possession of the suit properties free from mortgage.

5. The defendants' contention was that the present claim of the plaintiffs was barred by 'res judicata' and that their right to redeem was extinguished owing to their failure to comply with the direction of the High Court calling upon them to pay Rs. 1000/- to the defendants. They also alleged that they had acquired the equity of redemption through an oral gift pr the year 1919 (Ext. J) made by Dhunilal m favour of the defendants, and that by virtue of that gift they had become absolute owners of the property since they had remained in adverse possession for over twelve years.

6. The learned Munsif who tried the suit in the first instance held that the plaintiffs' suit to redeem was not barred by either Section 11 or Section 47 of the Civil Procedure Code. He also held that the mortgage debt could not be said to have been discharged by virtue of the provisions of the Orissa Moneylenders Act. He accordingly granted a preliminary decree to the plaintiffs for redemption, and directed them to pay Rs. 1000/- to the defendants, as a condition precedent to redemption.

On appeal the learned Subordinate Judge agreed with the view of the Munsif that the plaintiffs' right to redeem was not barred by any of the provisions of the Civil Procedure Code, but differed from him on the question as to whether the mortgage-debt had been discharged. However, in view of the fact that the defendants had been awarded compensation in respect of their dispossession by the plaintiffs between the years 1941 and 1947 he was of opinion that the defendants should be deemed to have been in continuous possession from 1919 till 1947 and accordingly, while agreeing with the order awarding compensation, he came to the finding that the mortgage debt had been discharged.

7. On behalf of the defendants-appellantstheir learned counsel, Mr. P. Misra, has raised two contentions. Firstly, he urges that the present suit is not maintainable as Section 11 of the Civil Procedure Code is a bar and as the matters in controversy have already been litigated and finally concluded by the decisionin the earlier suit filed by Lalita Prasad Tiwaryredemption by Dhunilal and claimed absolute title to the lands. The learned Subordinate Judge who tried the title suit upheld the contention of the defendants that there was a mortgage in their favour and granted a decree to the plaintiff subject to the condition that he should pay Rs. 1,000/- to the defendants before recovering possession from them The claim of the defendants to the suit-land based on an oral gift was negatived.

On appeal by the plaintiff to the District Court, the learned District Judge held that the defendants had not been able to make out any valid mortgage in their favour as alleged by them, and he accordingly (sic) for possession of the suit lands. There was also a cross-appeal by the defendants, claiming compensation for improvements alleged to have been made by them. That was also dismissed. Against the judgment of the District Judge the defendants went up in appeal to the High Court in Second Appeal No. 183 of 1940, which was disposed of in February 1947.

In the meanwhile, on the strength of the decree obtained by him in the District Court on 17-7-1940 the plaintiff took delivery of posses-ion from the defendants on 3-11-194,1 and continued in possession until the disposal of the appeal in 1947 by the High Court. The defendants were restored to Possession on 8-10-48 in Mis. Case 33 of 1947. The High Court set aside the judgment of the District Judge and restored that of the Subordinate Judge and passed a decree to the effect that the plaintiff would be entitled to take possession of the suit

'on the condition that the plaintiff pays to the defendants Rs. 1000/- within six months, failing which the plaintiff's suit will be dismissed, and that interest at six per cent per annum shall run on that sum from the date the plaintiff took delivery of possession.

The plaintiff did not pay up the sum of Rs. 1000/- as directed by the High Court and after the expiry of six months the defendants applied for being restored to possession in Misc. Case No. 33 of 1947 and were directed to be restored to possession on 31-7-48. Thereafter the suit, Title Suit No. 98 of 1948, out of which the present second appeal arises, was filed on 5-10-1948 for redemption of the mortgage, by the plaintiffs who are the sons of Lalita Prasad Tiwary, the plaintiff in the earlier Title Suit No. 38 of 1936.

Both the Courts below decreed the suit allowing redemption. The learned Munsif heldthat the plaintiffs would be allowed redemptionon their paying the principal amount of theloan of Rs. 1000/- while the Subordinate Judgewho heard the appeal held that the debt hadbeen discharged and that the plaintiffs wereentitled to possession unconditionally medefendants have now come up in second appealchallenging the right of the plaintiffs to redeem. (2) The two miscellaneous appeals arise outof restitution proceedings instituted by thedefendants under Section 144 of the Civil Procedure Code. The learned District Judgeawarded a sum of Rs. 1680/- to the defendantsas mesne profits for the period 1941 to 1947during which the plaintiffs were in wrongfuloccupation of the lands, together with interestat 6 per cent per annum. Mis. Appeal No. 30 of1949 was filed by the plaintiffs challenging thein the year 1936. Secondly, it is contended that the plaintiffs are not entitled to any relief under the Orissa Moneylenders Act.

8. As pointed out earlier, the suit filed by Lalita Prasad Tiwary in 1936 was one in ejectment and was founded upon the plaintiffs' title to recover possession from a trespasser. That title was declared in favour of the plaintiff and his prayer for recovery of possession was granted. It was also found that the defendants were entitled to remain in possession until the encumbrance on the suit . property was discharged. The Court had, therefore, directed that the plaintiff could recover possession only on payment of the mortgage money due to the defendants. But neither the right to redeem the property, nor the terms of redemption, as such, were specifically in issue.

Nor does it appear that there was a preliminary decree for redemption, directing accounts to be taken or directing the defendants to put the plaintiff in possession of the properties free from mortgage. The decree passed in the earlier suit was not a decree for redemption as contemplated in Order 34, Rule 7 of the Civil Procedure Code. In terms the decree of the High Court stated that the plaintiff would recover possession 'on the condition that the plaintiff pays tothe defendant Rs. 1000/- within six months,failing which the plaintiff's suit will be dis- .missed.'

No final decree was passed by the High Court after the expiration of the period of six months extinguishing the right of the plaintiff to redeem. How such a decree is to be made is provided for in Order 34, Rule 8, Sub-clause (3) of the Civil Procedure Code.

In fact, it appears that even an order directing the dismissal of the plaintiff's suit was not obtained by the defendants when they found that the plaintiff failed to pay the sum of Rs. 1000/- as directed by the High Court. Even assuming that the prior suit was one for redemption the plaintiff's right to redeem could be extinguished only in accordance with the provisions of Section 60 of the Transfer of Property Act which declares the right of a mortgagor to redeem on payment of the mortgage-money. The proviso to that Section reads as follows: 'Provided that the right conferred by this Section has not been extinguished by the actof parties or by a decree of the Court.' Admittedly, there has been no decree passed by the Court in the earlier litigation extinguishing the right of the plaintiff to redeem. The issues in that suit were whether the plaintiff as the heir of Dhunilal was entitled to eject the defendants and whether he could recover possession ignoring the mortgage in favour of the defendants. Whereas in the present suit the issues were whether the right to redeem still subsists and, if so, what is the amount that is payable for such redemption. There was no decision in the earlier suit that the mortgagor's right to redeem would be extinguished on failure to deposit the stipulated amount within a specified period.

On the other hand, the decree shows that there was an express declaration that the plaintiff had the right to redeem on payment of the mortgage loan of Rs. 1000/-. The answer to the first five issues in the present suit can onlybe that the right to redeem still subsists as there has been no extinguishment of that right by an order of the Court. It was argued that the order of the High Court to the effect that 'thesuit will be dismissed' failing compliance with the condition, amounts to an extinguishment of the plaintiff's right to redeem. That, however, will depend on whether, in fact, an order directing that the plaintiff's suit was dismissed on his failure to comply with the condition, was passed.

As stated already no such order was passed and accordingly it must be held that no decree was passed expressly extinguishing the right of the plaintiff to redeem as contemplated by the proviso to Section 60 of the Transfer of Property Act. Consequently section 11 of the Civil Procedure Code does not operate as a bar to the maintainability of the present suit. Our attention was also drawn to the Privy Council judgment in -- 'Raghunath Singh v. Mt. Hansraj', 61 Ind. App. 362 (PC), where, on similar facts, the Judicial Committee held that the second suit to redeem was not barred by 'res judicata' as a proper decree had not been passed under Section 92 of the Transfer of Property Act of 1882, in the earlier suit.

9. Mr. Misra then referred us to Ext, J the receipt executed by Dhunilal Tiwaii on 25-6-1919 sometime after he had surrendered possession to the defendants under the oral mortgage. This document was exhibited in the earlier suit filed by Lalita Prasad Tiwari and had been relied on by the defendants in proof of an acknowledgment of the mortgage in their favour. The genuineness of the document has not been disputed by the plaintiffs. But an attempt was made by Mr. Misra to spell out from the terms of this document an absolute assignment in favour of the defendants. In other words, it was urged that the document did not purport to be an acknowledgment of a prior mortgage but was itself an instrument effecting a complete transfer of title.

Such a position, however, was not taken up in either of the Courts below. Indeed, it is inconsistent with the plea put forward by the defendants. Their case throughout has been that they were mortgagees in possession and that Ext. J is an acknowledgment of that fact. Their specific case in the written statement filed by them was that there was an oral gift of the equity of redemption by Dhunilal shortly before his death. In paragraph 11 they alleged that

'sometime before his death Dhunilal said that he owed a debt of Rs. 3000/- to Chunilal Mohanlal of Jharsuguda and he verbally gifted to the defendant and one Durga Prasad Misra, who is now dead, the lands in question and asked them that since they are enjoying the same in their own right they should pay up the debts outstanding against him.'

Having set up an oral gift of the equity of redemption in the written statement, it is not now open to the defendants to come forward with an inconsistent case and assert that they had an absolute title to the property conveyed by Ext. J. Mr. Misra then submitted that a mere admission by the defendants of the character of their possession as mortgagees cannot, without more, create the relationship of mortgagor and mortgagee between the parties. Insupport of their allegation that there was an oral mortgage in their favour, the defendants relied on an entry in the Hamid Settlement record to show that their names had been recorded as 'mortgagees in possession' in respect of these lands.

It was urged by Mr. Misra that neither the admission of the defendants nor the entry in the settlement record in support of that admission could create a contract between the parties which, by law, is required to be in writing. He went further and urged that there can be no relationship of mortgagor and mortgagee created by prescription. In support of this proposition he relied on the case reported in -- 'Bhukhan Mian v Radhika Kumari Debi', AIR 1938 Pat. 479, which has, unfortunately, been more often quoted than understood. That case does not lay down that a mortgagee in possession, even under an invalid mortgage, cannot acquire by prescription the rights of a mortgagee,

In that case the plaintiffs alleged that the defendant had been let into possession under two unregistered mortgages bearing date 12th March 1921, and that they had tendered the amount in 1932 under Section 83 of the Transfer of Property Act. On the defendant's refusal to give up possession, the plaintiffs filed a suit in ejectment alleging that they had the right to redeem and pleaded that the mortgage debt had been duly discharged by the deposit made by them in the year 1932. The defendant asserted that he was not a mortgagee at all and that the transaction evidenced by the documents dated 12th March 1921 was in the nature of a lease and that he had been paying rent reserved in the deeds at the rate of Rs. 8/- a year.

The question that arose before their Lordships was whether the recitals in those two unregistered documents could be admitted in evidence to prove the terms of the alleged mortgage. Their Lordships held that the documents being unregistered should be ruled out of consideration as inadmissible in evidence. The only other evidence available to the plaintiffs in that case was that the defendant had been asserting himself as a mortgagee and that, therefore, he must be taken to have prescribed as such. There was no issue in that case as to when the defendant began to prescribe as a mortgagee and the only evidence on which reliance could be placed was an entry in the Settlement Records of the year 1924. Manoharlall. J., pointed out that

'even if the Settlement entry of 1924 be taken as the date when adverse possession commenced to run, the period of twelve years had not expired when the suit was instituted in 1933.'

and his Lordship held that no question of prescription arose in that case as the defendant had never asserted his title by prescription and as the plaintiff also did not make out such a case either in the pleading or in the evidence. The question before their Lordships was not about the nature and character of the possession of the defendant, but about the terms on which the defendant held the lands--whether as a mortgagee according to the plaintiffs or as a lessee according to the defendant. That case is no authority for the extreme contention urged by learned counsel that a mortgagee's interest cannot be acquired by prescription.

On this point there is a direct authority of this Court on which the Courts below have relied. In -- 'Purushottam Das v. S. M. De'Souza', ILR (1950) Cuttack 50 it has been held by a Division Bench that, when a mortgagee gets possession under a void mortgage he acquires by prescription the limited interest of a mortgagee, on the expiry of the period of twelve years. In my opinion, therefore, those contentions have no substance and must accordingly be overruled.

10. The second contention raised by learned counsel for the appellants is that the lower appellate Court fell into an error in its interpretation of the Orissa Moneylenders Act. That Section reads as follows:

'Notwithstanding anything to the contrary contained in any other law, or in anything having the force of law, or in any contract, an usufructuary mortgage which is 'executed' either before or after the commencement of this Act, shall, unless discharged previously, be deemed to stand discharged after the expiration of fifteen years from the date of the mortgage......'

Before its amendment by Act XVIII of 1947, the Section applied only to usufructuary mortgages executed after the commencement of the Act, namely, 1st July 1939. As it stands at present, after the amendment, the Section applies to all usufructuary mortgages executed either before or after the commencement of the Act. The appellants' contention is that this Section should be strictly construed as it purports to take away the vested rights of the plaintiffs. Reliance is placed on the dictum at page 289 (9th Edition) of Maxwell's Interpretation of Statutes which says:

'Statutes which encroach on the rights of the subject, whether as regards person or property, are subject to strict construction, and should be interpreted, if possible, so as to respect such rights.'

Our attention was also drawn to the cases reported in -- 'Bowman, In re', (1932) 2 K. B. 621, and -- 'Druce Co. Ltd. v. Beaumont Property Trust, Ltd.', (1935) 2 K. B. 257. In the first case it was held that the Housing Act which deprived a person of his rights to property should be construed strictly against the local authority and favourably towards the interest of the applicant inasmuch as he, for the benefit of the community, is undoubtedly suffering a substantial loss which must not be inflicted upon him unless it is quite clear that Parliament has intended that it shall.

In the second case, the point was whether or not a proper declaration had been served under a certain Section of the Distress Amendment Act. That Act considerably impinged on the rights of the landlord as regards distress and provided for certain formalities to be gone through before those rights were so impinged upon. As the Section had not been strictly complied with, the plaintiffs were not given protection under that Act. The point taken by Mr. Misra, relying on these two cases is that the plaintiffs should be non-suited unless they proved, firstly, that the defendants are in possession under an usufructuary mortgage and secondly that the usufructuary mortgage in question was 'executed' before or after the commencement of the Orissa Moneylenders Act. (11) On a strict interpretation of Section 17 of the Orissa Moneylenders Act, it appears to me that it has no application to mortgages other than an usufructuary mortgage as defined in the Transfer of Property Act. A mortgagee may get possession, either under a mortgage by conditional sale, or under an English mortgage, or under an anomalous mortgage. But it seems to me that Section 17 is not intended to bring in any of these types of mortgages within its purview. Its scope, is my opinion, is restricted only to the case of an usufructuary mortgage 'simpliciter'. The question, therefore, is: what is meant by the expression 'usufructuary mortgage'

According to the appellants we are to understand it as defined in Section 58 of the Transfer of Property Act, while according to the respondents, we have to take its dictionary meaning and include every mortgage by which possession has been transferred. Even if we are to accept the respondents' contention that the expression should be understood as signifying nothing more than possession as a mortgagee, the expression 'usufructuary' would indicate that the mortgagee enjoys the usufructs of the property and, in the absence of proof of any express stipulation as to how the rents and profits are to be appropriated, and as to whether the loan advanced by the mortgagee was to be adjusted in lieu of the rents and profits, we must hold that the intention of the parties was that the profits should be set off against the interest due on the money advanced.

In other words, the contract between the parties must be taken to have been that the mortgagor should have the use of the money borrowed and the mortgagee should have the use of the property mortgaged. That such a transaction is contemplated by the expression 'usufructuary mortgage' would be clear from the definition of the term occurring in Section 58(d) of the Transfer of Property Act which says; 'An usufructuary mortgage is one whereby the mortgagor delivers possession of the mortgaged property to the mortgagee and authorizes him to retain such possession until payment of the mortgage money, and to receive the rents and profits accruing from the property in lieu of interest'

I am, therefore, of opinion that nothing turns on the attempted distinction sought to be made between the statutory meaning and the grammatical meaning of the term 'usufructuary mortgage'. When the Legislature used an expression which had a technical meaning attached to it, it must be taken that the expression was used in that sense, and in no other. I would, therefore, accept the appellants' contention that Section 17 of the Moneylenders Act would apply only if it is proved that the transaction was an usufructuary mortgage as contemplated, in the Transfer of Property Act.

12. That takes us to the question as to whether such a mortgage could be created orally, as seems to have happened in the case before us, and yet would be governed by the provisions ox the Orissa Moneylenders Act. Section 17 of the Act expressly makes reference to a mortgage which is 'executed'. 'Execute' in legal parlance means to go through the forms necessary for the validity of a mortgage. It assumes that the mortgage should have been properly signed and attested. 'Executed' literally means 'completed', and in reference to a mortgage includes the act or series of acts culminating in the completion of the signing, attesting and delivery of the mortgage deed.

Now, Section 59 of the Transfer of Property Act provides that, where the principal money secured is Rs. 100/- or upwards, a mortgage can be effected only by a registered document signed by the mortgagor and attested by at least two witnesses. As soon as the signing by the mortgagor and the attesting by the witnesses is completed, the mortgage may be said to have been 'executed', it pre-supposes that the person who derives a benefit or incurs an obligation under the instrument should have signed, or caused his signature to be put, on it. It also concludes due attestation. It is clear, therefore, that when the Legislature used the word 'executed' with reference to a mortgage deed, it could have only meant that the process of signing and attestation should have been gone through as contemplated in the Transfer of Property Act.

Having regard to the juxtaposition of the words it is difficult for me to accept the contention that the terms 'usufructuary mortgage' and 'executed' are used in Section 17 of the Moneylenders Act in any sense other than the one in which they have been used in the Transfer of Property Act. A mortgage is essentially a transfer of interest in immovable property, and should be understood as defined in the Transfer of Property Act. On a plain reading of Section 17, therefore, I am inclined to hold that it applies only to cases of usufructuary mortgages created by writing. The opening words of the Section: 'Notwithstanding anything to the contrary contained in any other law, etc.', obviously refer to the process of discharge of an usufructuary mortgage so created, and not to the process by which such a mortgage is created or executed.

The heading of the Section, as given in the margin, would itself indicate that these opening words mean that anything to the contrary relating to the discharge of an usufructuary mortgage in any other law stands over-ridden by the provisions of Section 17 of the Moneylenders Act. As pointed out already, an usufructuary mortgagee is entitled, according to the definition in Section 58(d) of the Transfer of Property Act, to remain in possession of the property and to enjoy the rents and profits until the debt is discharged. What Section 17 of the Moneylenders Act says is that notwithstanding this provision in the Transfer of Property Act, fifteen years possession of the mortgaged property by the mortgagee will be deemed to have discharged the mortgaged debt.

The Act would thus appear to have made an express provision for the statutory discharge of a debt which would otherwise have continued. The Legislature has, therefore, laid down specifically that this Section shall operate notwithstanding anything to the contrary contained in any other law so far as the discharge of mortgage debts is concerned. But the overriding provision is confined only to the mode of discharge and to that extent only it operates notwithstanding the provisions of the Transfer of Property Act.

There is no justification for the contention that the expression 'notwithstanding anything to the contrary contained in any other law' means to override every other provision contained in the Transfer of Property Act such as, for instance, those relating to registration, execution or attestation of a mortgage. So, proof of execution of a mortgage would be required only where the mortgage is in writing and the statutory discharge by virtue of continuous possession for fifteen years, as provided in Section 17, would apply only to such mortgages and not to oral mortgages.

13. The question, then, is whether Section 17 applies to the relationship created between two parties, as mortgagor and mortgagee, by the law of prescription. A person may transfer his property for securing a loan either orally, or by an unregistered document, both of which are inoperative to create the relationship of mortgagor and mortgagee. But the possession of the, transferee under such a transaction becomes adverse from the moment he enters into possession and he acquires by such adverse possession the title for which he prescribed when he entered into possession. Thus, a person who enters into possession as a mortgagee under an invalid document acquires by prescription the title of a mortgagee after twelve years, for the possession from the commencement is under an adverse title. He is liable to be redeemed on completion of his title by prescription. But in view of the language used in Section 17 of the Orissa Moneylenders Act an oral debt cannot be said to have been discharged by the mortgagee's remaining in possession for fifteen years even after the completion of his title by prescription. The distinction between the present case and the case of the -- 'Purushottam Das v. De'Souza', I. L. R. (1950) Cuttack 50, is that in the latter case the mortgagee entered into possession under a document, executed but unregistered, and, therefore,an invalid documents while in the present case the transaction took place orally. I would, therefore, hold that irrespective of the period of possession of the appellant-mortgagees the plaintiff-mortgagors are not entitled to any relief under the provisions of the Orissa Moneylenders Act.

14. Mr. Rao then referred us to Sections 10 and 11 of the Moneylenders Act and urged that since the mortgagees have received by way of profits more than the principal amount advanced by them, his clients are not liable to pay any further amount to the defendants. I am not impressed by this contention. The plaintiffs have been directed by the Courts below to pay Rs. 1000/- being the amount of the principal of the loan as a condition precedent to redemption. They have also directed to pay Rs. 1680/- as damages to the defendants for their wrongful occupation of the suit properties between the years 1941-47. The two claims are separate and independent of each other. What Section 10 lays down is that the maximum amount of interest that may be awarded to a person in a suit in respect of a loan, shall not exceed the principal amount of the loan originally advanced.

Section 11 also has no application to the facts of this case as here there was no question of any accounts being taken between the parties. As I interpret the transaction in this case, the mortgagee was to remain in possession and utilise the rents and profits from the suit lands until the principal amount was paid. There was no stipulation for interest on the money advanced nor was there any stipulation as to accounts being taken for any excess profits that may have been appropriated by the mortgagees. In these circumstances I have arrived at the conclusion that the plaintiffs are not entitled to any relief under the Orissa Moneylenders Act and that they are liable to pay the principal amount of Rs. 1000/- to the defendants as decreed by the Trial Court.

The learned Subordinate Judge erred in thinking that the mortgage debt stood statutorily discharged on the assumption that the mortgagees must be deemed to have continued in possession between the years 1941 to 1947 on account of their being restored to possession under Section 144 of the Civil Procedure Code and compensated in money for the period of their dispossession. I would, therefore, set aside the decree of the learned Subordinate Judge and restore that of the Munsif. (His Lordship then dealt with the two miscellaneous appeals and upheld the decision of the Subordinate Judge. His Lordship then proceeded:)

15.-17. The result is that S. A. No. 239 of 1951 is allowed in part. The plaintiffs' right to redeem is declared and the order of the learned Subordinate Judge allowing unconditional redemption is set aside and that of the Munsif directing the plaintiffs to pay Rs. 1000/-, the principal amount of the mortgage loan, to the defendants as a condition precedent to redemption is restored. The plaintiffs will, therefore, have a preliminary decree for redemption in their favour, as directed by the learned Munsif. They shall have to deposit the sum of Rs. 1000/- within two months from this date.

18. Miscellaneous Appeals 30 and 49 of 1949 are dismissed and the judgment of the District Judge directing the plaintiffs to pay Rs. 1680/-as damages to the defendants for their wrongful occupation of the suit-lands from 1941-47 as also interest on the mesne profits, as and when they accrued due, at 6 per cent per annum, is affirmed.

19. In the circumstances, there will be no order as to costs.

Jagannadha Das, C.J.

20. I agree with my learned brother in the order proposed by him as regards the result of the second appeal and the two miscellaneous appeals.

21. It is clear that, on the pleadings in this case, no question can be raised at this stage that the defendants were not in possession as mortgagees but only as under an absolute sale. Neither can the right of redemption be said to have been lost by non-compliance within time, by the plaintiff, of the condition for obtaining possession in the decree for possession which he ultimately obtained in second appeal. The right of redemption not having been in terms extinguished by the decree, must be deemed to continue, the exercise of the same not having been barred by limitation.

22. As regards the contention of the plaintiff that the mortgage debt must be deemed tohave been extinguished by operation of Section 17 of the Orissa Moneylenders Act, I agree thatthough it may be said that the defendants arein possession as 'usufructuary mortgagees' itcannot be said that they were in possessionunder an usufructuary mortgage 'executed' before or after the Act. That term is not applicable to the case of a person who has got intopossession under an oral mortgage, and hasperfected his title as a mortgagee by prescription.


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