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K. Gopalan Thanthri Vs. Ittira Kelan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtKerala High Court
Decided On
Case NumberAppeal Suit No. 237 of 1964
Judge
Reported inAIR1970Ker305
ActsLimitation Act, 1963 - Schedule - Article 61; Travancore-Ezhava Act, 1100 M.E. - Sections 21; Travancore Nayar Act, 1100 M.E. - Sections 25
AppellantK. Gopalan Thanthri
Respondentittira Kelan and ors.
Appellant Advocate P.C. Chacko, Adv.
Respondent Advocate C.K. Sivasankara Panicker and;P.G.P. Panicker
DispositionAppeal dismissed
Cases ReferredTukaram v. Atmaram
Excerpt:
.....the possessory mortgagee being in possession not merely of the mortgage interest but also of the equity of redemption, he, in effect, delivers possession of the equity of redemption to the mortgagee so that thereafter the possession of the tangible property by the mortgagee involves possession not merely of the mortgage interest but of the equity of redemption as well. what the supreme court emphasized in air 1963 sc 70 was that the consent necessary to put the possessory mortgagee in possession of the equity of redemption as well so as to prescribe for title thereto, must be by a person competent to give consent, not by a person like a minor who has not the capacity to do so. the question then is not so much whether the transaction by which the consent is given is void or voidable..........extend beyond this, namely, that a mortgagee cannot by his adverse assertion acquire title to the property mortgaged even if the mortgagor knowing such assertion acquiesced in it unless such acquiescence amounts in some way or other to a release of the equity of redemption. the privy council, no doubt, said that mere acquiescence by the mortgagor would not be enough to convert the possession of a mortgagee as mortgagee into possession as owner. but where a change in the character of possession of the mortgagee is brought about by an agreement between the mortgagor and the mortgagee the case would be different. whereas neither assertion by itself nor assertion with acquiescence is sufficient to alter the nature of the mortgagee's possession, the consent of the mortgagor implied in an.....
Judgment:

Raman Nayar, C.J.

1. In Mathew v. Ayyappankutty, 1962 Ker LT 61 = (AIR 1962 Ker 164) (FB), a Full Bench of this Court held that the sale of tarwad property by the karnavan of the tarwad to a mortgagee in possession alters the character of the latter's possession so as to include within its scope the interest of the mortgagor tarwad with the result that, notwithstanding that the sale was an invalid sale not binding on the tarwad, a suit for redemption would be barred after twelve years of such altered possession. That is precisely the case here. It was in 1926 that the karnavan of the tarwad to which the property in suit belonged sold the property to the 1st defendant mortgagee who was in possession. The sale was invalid for want of the written consent of all the other adult members of the tarwad as required by Section 21 of the Travancore Ezhava Act by which the tarwad was governed and which had come into force a few months before the sale -- only the senior anandaravan had given his written consent by subscribing to the sale deed and there were admittedly two other adult members of the tarwad at the time. It was only in 1951, twenty five years later, that the plaintiff brought his suit for redemption on the strength of a purchase a few months earlier from the then surviving members of the tarwad.

It is not disputed that if 1962 Ker LT 61 = (AIR 1962 Ker 164) (FB) was rightly decided, the learned Single Judge who heard the second appeal from which this appeal has been preferred was right in setting aside the decree for redemption passed by the lower appellate Court and restoring the decree of the trial Court dismissing the suit. But the Division Bench which heard this appeal in the first instance thought that the decision in 1962 Ker LT 61 = (AIR 1962 Ker 164) (FB) required reconsideration in the light of the decision in Padma Vithoba v. Mohd. Multani, AIR 1963 SC 70 and has, in that view, referred the case to a Full Bench. That is how the case has come up before us.

2. With great respect we think that 1962 Ker LT 61 = (AIR 1962 Ker 164) (FB) was rightly decided and we are able to see nothing in AIR 1963 SC 70 (which has been dis-tinguished by the learned Single Judge) that calls for a reconsideration thereof.

3. When an interest is carved out of property, as, for example, by the grant of a mortgage or a lease or other restricted interest therein, two distinct and separate interests come into being, each by itself a distinct subject of property which can be the subject-matter of independent possession. (See Khiarajmal v. Daim, (1905) ILR 32 Cal 296 at pp. 311 and 312 (PC)). True, in the case of a possessory mortgage, the mortgagee is in possession of the tangible property. But that means no more than that he is in possession of the mortgage interest; the mortgagor owner continues in possession of what remains after the transfer effected by the mortgage, namely, what is usually and conveniently called the equity of redemption, just as the landlord continues in possession of the reversion notwithstanding that the tenant is in possession of the tangible property.

That is why a person who obtains possession of tangible property under an invalid lease or mortgage prescribes only for a tenant's or mortgagee's title as the case may be. He is regarded as in possession of only that interest in the property to which his animus is directed -- the owner is regarded as in possession of the rest, namely, the reversion, or the equity of redemption; and that again is why, generally speaking, a trespasser on tangible property is regarded as in possession of only that interest therein that the person entitled to present possession thereof has -- a person trespassing on property in hands of the owner of a restricted interest therein entitling him to present possession thereof, is regarded as in possession only of that restricted interest and not of the whole. He prescribes only for the restricted interest and not for full ownership.

At the same time, it is settled law -- AIR 1963 SC 70 is itself sufficient authority for the proposition -- that where, by a sale or Other transaction, the mortgagor consents to the possessory mortgagee being in possession not merely of the mortgage interest but also of the equity of redemption, he, in effect, delivers possession of the equity of redemption to the mortgagee so that thereafter the possession of the tangible property by the mortgagee involves possession not merely of the mortgage interest but of the equity of redemption as well. And, if the transaction does not effect a valid transfer of title to the equity of redemption, the mortgagee's possession thereof would be adverse to the mortgagor and, by remaining in possession beyond the statutory period, he would prescribe title thereto. The same result would follow in the case of a landlord selling the reversion to the tenant in possession of the tangible property.

What the Supreme Court emphasized in AIR 1963 SC 70 was that the consent necessary to put the possessory mortgagee in possession of the equity of redemption as well so as to prescribe for title thereto, must be by a person competent to give consent, not by a person like a minor who has not the capacity to do so. The question then is not so much whether the transaction by which the consent is given is void or voidable --even a void transaction like a written unregistered sale can put the mortgagee in adverse possession of the equity of redemption; nor even whether the person effecting the transaction had the capacity to do so; but whether he had the capacity to give consent.

4. It has always been recognized that the karnavan of a tarward effectively and completely represents the tarwad in dealings with the outside world. When he deals with tar-wad property it is as if all the members of the tarwad (all being sui juris) had joined in the transaction. Statutes like Section 21 of the Travancore-Ezhava Act and Section 25 of the Travancore Nayar Act recognize this, for they pre-suppose that the karnavan, and (short of every member of the tarwad joining the transaction, all being sui juris) the karnavan alone, has the capacity to deal with the tarwad property. These statutes only place curbs on the exercise of this power by the karnavan but do not affect his inherent capacity. If he breaks the rules, he acts in excess of authority, not with lack of inherent capacity -- that is why the transaction he so effects is only voidable and not void.

5. This much we think is clear from a plain reading of Section 21 of the Travancore-Ezhava Act:

'21. Sale or mortgage with possession or lease for more than twelve years. -- Except for consideration and Tarwad necessity and with the written consent of all the major members of the tarwad, no karnavan or other managing member shall sell Tarwad immovable property, or mortgage it with possession for a period of more than twelve years, or lease it for a period of more than twelve years'.

As we have said it pre-supposes that the karnavan has the capacity to sell the property of the tarwad.

6. If the kamavan has the capacity to represent the tarwad in its dealings with the outside world, it follows that he has the capacity to consent to a possessory mortgagee so changing the character of his possession as to comprise within its scope the equity of redemption as well, in other words, to put him in possession of the equity of redemption. And, if the transaction by which this is done is not effective to convey title to the mortgagee, then the possession of the equity of redemption by the mortgagee becomes adverse to the tarwad.

7. We affirm the decision of the learned Single Judge and dismiss this appeal by the plaintiff with costs.

Mathew, J.

8. In (1905) ILR 32 Cal 296 (PC) the Judicial Committee of the Privy Council observed:

'Their Lordships are satisfied that the possession has been that of the mortgagee throughout, and the question at issue is exclusively one between mortgagor and mortgagee. As between them neither exclusive possession by the mortgagee for any length of time short of the statutory period of 60 years, nor any acquiescence by the mortgagor not amounting to a release of the equity of redemption will be a bar or defence to a suit for redemption if the parties are otherwise entitled to redeem.'

On the basis of these observations the High Court of Madras in Ariyaputhira v. Muthu-komaraswami, ILR 37 Mad 423 = (AIR 1914 Mad 489), held that where a person's possession commenced as an usufructuary mortgagee, and subsequently the mortgagor sold the equity of redemption to him, but the sale proved abortive, (for want of registration) and the mortgagee thereafter continued in possession as absolute owner under the purported sale, the possession of the mortgagee must be referred to his possession as mortgagee and cannot in law be deemed as possession as owner adverse to the mortgagor. Sadasiva Iyer, J., on behalf of the Bench said:

'If the original mortgagee continued to hold possession as mortgagee owing to the alleged sale ..... (of the equity of redemption) being invalid and ineffective to convey to him tine ownership in the equity of redemption, ..... he cannot by merely asserting possession as owner under the invalid sale convert his possession as mortgagee into possession as owner even granting that the mortgagor knew and acquiesced in his as-sertion.'

The Privy Council decision in Khiarajmal v. Daim, (1905) ILR 32 Cal 296 (PC) does not seem to extend beyond this, namely, that a mortgagee cannot by his adverse assertion acquire title to the property mortgaged even if the mortgagor knowing such assertion acquiesced in it unless such acquiescence amounts in some way or other to a release of the equity of redemption. The Privy Council, no doubt, said that mere acquiescence by the mortgagor would not be enough to convert the possession of a mortgagee as mortgagee into possession as owner. But where a change in the character of possession of the mortgagee is brought about by an agreement between the mortgagor and the mortgagee the case would be different. Whereas neither assertion by itself nor assertion with acquiescence is sufficient to alter the nature of the mortgagee's possession, the consent of the mortgagor implied in an agreement between the mortgagor and the mortgagee that the mortgagee may hold the property as owner would be sufficient to alter the character of the possession of the mortgagee. In other words, the mortgagor, if sui juris, will be competent to agree to treat the mortgage as terminated and the mortgagee's possession thereafter as that of an owner; in such a case the possession of the mortgagee would become adverse to the mortgagor.

The decision in ILR 37 Mad 423 = (AIR 1914 Mad 489) has been dissented from in Kandasami Pillai v. Chinnabba, ILR 44 Mad 253 = (AIR 1921 Mad 82). The decision of the Supreme Court in AIR 1963 SC 70 is clear that it is by virtue of the change in the animus of the mortgagee as a consequence of the consent of the mortgagor implied in the purported sale of the property, that the possession of the mortgagee becomes adverse.

9. The interest which resides in the mortgagor before foreclosure is generally described as equity of redemption, an expression borrowed from the English law. The expression would suggest that the interest of the mortgagor is a bare equity, something different from what we call ownership. But we know that this is not so, for, the ownership continues with the mortgagor notwithstanding the mortgage, the mortgagee acquiring by virtue of the mortgage only a jus in re aliena. The introduction of the expression into our system was regretted by Dr. Rasbehari Ghose. He said:

'I have been induced to make these observations, not because I have any wish to be hypercritical, but simply because I know of instances in which the whole discussion has been materially coloured by notions, which would scarcely have suggested themselves to any lawyer, if the argument had not been conducted in the technical language of the English law'. (See 'Law of Mortgages in India' by R. Ghose, 5th Edn. Vol. I, page 210.)

The right to redeem in Section 60 of the Transfer of Property Act is not the same thing as 'equity of redemption'. In India a host of people besides the mortgagor can redeem. (See Section 91 of the Transfer of Property Act). When a property is mortgaged for a second time by the mortgagor some people would say that the equity of redemption has been mortgaged. This may be a proper way of talking under the English system of the law of mortgage, but is not so in this country. It is the property and not the 'right to redeem' that is mortgaged. The 'property subject to a mortgage' and the 'right to redeem' are not really the same thing. The latter is the right to get back the property on repayment of the mortgage money, and the former, is the property itself, with a liability to discharge a prior mortgage. If what the mortgagor retains after the creation of a mortgage be the property itself but subject to a liability to make good a loan, it is clear that the mortgagor would be entitled to transfer what he retains, viz., the property. If the ownership remains with the mortgagor, why speak of his possessing merely an equity of redemption

10. Ownership denotes the relation between a person and an object forming the subject-matter of his ownership. It consists of a complex of rights all of which are rights in rem being good against the whole world and not merely against specific persons. Pollock in his 'First Book of Jurisprudence,' 5th Edn., at page 179 says:

'We must not suppose that all the powers of an owner need be exercisable at once or immediately; he may remain owner though he has parted with some of them for a time. He may for a time even part with his whole powers of use and enjoyment and suspend his power of disposal, provided that he reserves for himself or his successors the right of ultimately reclaiming the thing and being restored to his power.'

Salmond in his Book on Jurisprudence, 12th Edn., at page 250 says:

'Nevertheless to speak as if what is owned is always a right runs counter to law and legal usage. It is natural to talk of owning land and chattels, and this usage serves to mark the special relationship existing in such cases between the owner and the material object owned.'

(See also 'Elements of Jurisprudence', 13th Edn., page 209 by Holland, and 'Elements of Law', 6th Edn., page 159 by Markby). If the ownership remains with the mortgagor, and what he owns is a thing in law, I am not sure whether there is any justification in treating the thing as intangible. In the Full Bench decision in Sohan Lal v. Mohan Lal, ILR 50 All 986 = (AIR 1928 All 726) (FB), Mukerji, J., observed :

'In the case of a simple mortgage the mortgagor retains possession; in the case of a usufructuary mortgage he parts with possession. In either case he is the mortgagor and, one would expect, his interest is the same. We cannot therefore say that in the case of a simple mortgage, the mortgagor being in possession, his interest is a tangible immovable property, while in the case of an usufructuary mortgage the mortgagor's interest is an intangible property, because he is out of possession. Yet, in some cases it has been decided that such is the case. In my opinion, on principle, there can be no distinction made between the two cases of simple and usufructuary mortgages.'

In the same case Kendall, J., after referring to the following observations of the Madras High Court in Ramaswami Pattar v. Chinnan Asari, (1901) ILR 24 Mad 449,

'The equity of redemption in a usufructuary mortgage is only an intangible thing like a reversion ..... and it can be transferred by sale only by a registered instrument and not by delivery of the property' observed:'This view is supported by a reference to Williams on 'Real Property'. With all respect to the learned Judges who expressed this opinion, I would remark that in English law 'what is generally understood by the term mortgage is a conveyance of land or other property as security for the payment of money', and the mortgagee has been held to be in law the owner of the mortgaged property'.

Sulaiman, Ag. C. J., took a different view. The majority view has been followed in Pheku Mian v. Syed Ali, ILR 15 Pat 772 = (AIR 1937 Pat 178), Venkatasubbamma v. Subbayya, AIR 1964 Andh Pra 21, Tukaram v. Atmaram, AIR 1939 Bom 31 and Bhanwar-lal v. Dhulilal, ILR (1958) 8 Raj 572 = (AIR 1959 Raj 218).

11. The possession of the property mortgaged is delivered or contracted to be delivered to the mortgagee in an usufructuary mortgage. (See Section 58 of the Transfer of Property Act). It is the possession of the property mortgaged that is delivered or contracted to be delivered, and not the possession of any restricted interest in the property. The mortgagee gets the property under his exclusive physical control. Hut his animus is to possess the property not as full owner but only for the purpose of taking the usufructs and appropriating them in accordance with the stipulations in the mortgage deed. In other words, although the mortgagee has exclusive physical control of the property, his animus is to possess it only as mortgagee. The mortgagor having lost possession of the property by the mortgage, when he later on sells the equity of redemption to the mortgagee, what he really sells is the property. If the sale is ineffective to convey the property for any reason other than want of capacity of the mortgagor, the consent of the mortgagor implied in the agreement of sale which precedes the sale will terminate the relationship of mortgagor and mortgagee, and operate as a permission to the mortgagee to hold the property as owner.

The principle is analogous to the one underlying the concept of traditio brevi manu, that is, by virtue of the agreement, the mortgagee who is in physical control of the property with a limited animus to possess it as mortgagee is permitted to hold it as owner. What happens is only a change in the animus of the mortgagee by virtue of the consent implied in the purported sale. If by the agreement, the mortgagee's right in the property came to an end, the mortgagor would become entitled to possession at once, and if the mortgagor does not enter into possession, the mortgagee's possession would become adverse to the mortgagor. Sulaiman, Ag. C. J., said in ILR 50 All 986 = (AIR 1928 All 726) (FB).

'The case, however, is different where a change in the character of the possession is brought about by an agreement between the parties or with their express consent, as distinguished from a mere acquiescence. I do not see why, if both parties agree and intend that from a particular date the possession of the mortgagee over the property should cease to be that of a mortgagee and be adverse as against the mortgagor, such a change cannot be recognised or be effectual.'

It is fictitious to talk of a delivery of possession of an intangible right like the equity of redemption. Incorporeal possession of a right by a person other than the owner of the right means the de facto exercise by the person of the de jure right inhering in the owner. In the case of coporcal possession, one must actually enjoy or exercise the right in order to possess it.

'But there is a sense in which possession of a right necessarily involves the exercise of the right in question. In this sense I can be said to possess a right where I exercise a claim as if it were a right. There may be no right in reality; and when there is a right, it may be vested in some other person, and not in the possessor. If I possess a way over another's land, it may or may not be a right of way; and even if it is a right of way, it may be owned by some else, though possessed by me.' (See 'Salmond on Jurisprudence', 12th Edn., pages 291, 292.)

12. Whatever might be the relevancy of the concept of adverse possession of equity of redemption as an intangible right in the case of a third party claiming adversely to the mortgagor by receiving rent or michava-ram from the mortgagee in possession under. a claim of right, I am not sure that a mortgagee in possession to whom an invalid sale of the property was executed by the mortgagor, should show that he has been in adverse possession of the intangible right of the equity of redemption vesting in the mortgagor as a separate right in order to prescribe for title to the full interest of the property. I think, what happens is only that the mortgagee being in exclusive physical control of the property with the limited animus to possess as a mortgagee enlarges his animus to possess the full interest in the property with the consent of the mortgagor, implied in the agreement to terminate the mortgage, and to hold the property as owner.

I agree with My Lord the Chief Justice that 1962 Ker LT 61 = (AIR 1962 Ker 164) (FB) was correctly decided, and would dismiss the appeal with costs.


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