1. This is a Civil Second Appeal in a suit for redemption. The main point involved in this appeal is whether the limited right of mortgagee can be acquired by adverse possession. There is an unreported Division Bench case of this Court in Sarwan Lal v. Gangadhar, Second Appeal No. 220 of 1949, decided on the 12th October, 1955, in which it was held that such right can be acquired by adverse possession, but there is another Division Bench case of this Court in Hansia v. Bakhtawarmal, ILR (1958) 8 Raj 126: (AIR 1958 Raj 102), in which it has been held that such right cannot be acquired by adverse possession.
When this appeal came up for hearing before one of us sitting as a single Judge, it was referred to a Division Bench, in view of the conflict of opinion between two Division Benches of this Court. Eventually, this Special Bench was constituted for deciding the appeal.
2. The facts giving rise to this appeal may be briefly stated thus. On 7th October, 1949, the plaintiffs Laxmi Narain and Sitaram filed a suit for redemption of a shop situated in the town of Reengus, against Mangi Lal and Rameshwar defendants. The case of the plaintiffs in the trial court was that Godha, Lachhmi Narain, Bala Bux and Sita Ram mortgaged the above mentioned shop for Rs. 401/- with Jodh Raj and Jumna Lal on Pos Sudi 15, Sambat 1975, corresponding to the 16th January, 1919, under an unregistered mortgage-deed (Ex. P/l).
Thereafter, Rs. 29/-/- were further borrowed by the mortgagor on Mah Badi 5, Sambat 1976, corresponding to the 10th January, 1920. A further sum of Rs. 100/-/- was borrowed on Jeth Badi 5, Sambat 1978, corresponding to the 27th May, 1921, and another document (Ex. P/2), which was also Unregistered, was executed stilting that the mortgage amount due aggregated to Rs. 571/- and that the same shall be paid at the time of the redemption of the shop.
In the plaint the dates, of the mortgage are not given, but it is mentioned that the mortgages took place in Sambat 1978 and 1981. The plaintiffs further stated in the plaint that on the 2nd December, 1947, the plaintiffs had filed an application after depositing Rs. 401/- in the Court of Munsif, Sikar, under Section 83 of the Jaipur Transfer of Property Act for redemption of the shop but this application was dismissed on the 31st of January, 1949.
3. The defendants contested the suit and pleaded that there was no mortgage in accordance with law as there was, no registered mortgage deed. It was also stated that the date of mortgage mentioned in the plaint was wrong. The defendants also pleaded that they had been in adverse possession from Sambat 1975 and the suit was time barred. It was also pleaded, that the plaintiffs had no right to redeem the property, as all the representatives of the original mortgagees had not been made parties and the suit was bad for non-joinder of parties.
4. Counsel for the parties were examined under Order 10, Rule 1 C. P. C. and it was admitted by the counsel for the defendants that this disputed shop was mortgaged for Rs. 401/-/- on Pos. Sudi Poonam, Sambat 1975 to his clients by an un-registered and un-stamped document. He further stated that a sum of Rs. 299-3-9 had been spent on the repairs of the shop. The learned judge of the trial court dismissed the suit. He held that Ex. P/2 was not attested as required by law. The suit was held to be time Barred.
It was also held that as the heirs of the other co-mortgagors were not made parties, the suit suffered from the defect of non-joinder of necessary parties. On appeal by the plaintiffs to the District Judge, Sikar, it was held that the suit was rightly dismissed on the points of limitation and non-joinder of the necessary parties. The plaintiffs filed this second appeal in this Court.
5. Before we refer to the contentions raised by learned counsel for the parties, we may state that the parties conceded before us that under the relevant law prevalent in the former Jaipur State where the disputed shop was situated, the documents Exhibits P/l and P/2 being mortgage deeds, required khat chapi i.e. required to be registered and they were inadmissible in evidence to prove mortgage. It was further conceded that the law on the point of inadmissibility of un-registered documents may be taken to be the same as enunciated in Section 49 of the Indian Registration Act.
On the point of limitation, it may be stated that the Jaipur Limitation Act, 1925, came into force on the 1st of October, 1925. Under Article 121 of that Act a period of 12 years was provided for a suit for possession of immovable property or any interest therein not otherwise specially provided for in the Act and the limitation ran from the date-when the possession of the defendant became adverse to the plaintiff. This article is the same as Article 144 under the Indian Limitation Act.
Under Article 124 of the Jaipur Act for a suit against the mortgagee with possession to redeem or recover the property mortgaged, a period of limitation of 30 years was provided from the date when the right to redeem the property to recover, possession accrued. There is a departure on this point from Article 148 of the Indian Limitation Act to the extent that the period of limitation, instead, of being 60 years, was only 30 years. There was also Section 27 in the Jaipur Act corresponding to Section 28, of the Indian Limitation Act.
It is also conceded before us that the law-prior to the coming into force of the Jaipur Limitation Act, 1925 so far as it is material for the purpose of this case, was the same as provided under that Act. When the suit was filed, the Jaipur Limitation Act, 1943 was the relevant law in force and that law provided 30 years for a suit for redemption under Article 148.
6. We may also mention that under the law, in force at the time of the execution of Exhs. P/l and P/2, it was not necessary that the mortgage deeds should be attested.
7. We now proceed to consider the respective-contentions of the parties. It was argued by learned counsel for the plaintiffs that by virtue of the law relating to the extinguishment of title which was in force at all material times and which was the same as laid down in Section 28 of the IndiaLimitation Act, the defendants or their predecessors-in-title had acquired mortgagee rights in the disputed shop to the extent of Rs. 401/-/- after the expiry of 12 years from the date of the execution of Ex. P/l and to the extent of Rs. 571/-/- afterthe expiry of 12 years from the date of the execution of Ex, P/l;.
After the acquisition of such rights, the mortgages were legally in a position to enforce such rights and the mortgagors had also the right to redeem the disputed shop within 30 years from the date when the defendants acquired the rights of mortgage. It was further argued that even if some of the mortgagors were not made parties, the suit could not be dismissed on that ground as they were not necessary parties and their non-joinder could not result in the dismissal of the suit.
It was also argued that though the document (Ex. P/l) -was specifically not referred in the plaint, yet this did not in any way prejudice the defendants in the trial of the suit as that document was produced by the defendants at the instance of the plaintiffs. It was also argued that as the learned counsel appearing on behalf of the defendants in the trial court had admitted the correctness of Ex. P/l, it did not much matter if it was not referred to in the plaint,
8. On behalf of the defendants, it was contended on the authority of this Court's decision in ILR (1958) 8 Raj 126 : (AIR 1958 Raj 102), that the limited rights of mortgagee could not be acquit-ed by prescription. It was further contended that Ex. P/l was inadmissible in evidence even for the purpose of showing the circumstances under which possession of the shop was parted with by the plaintiffs and their predecessors-in-title in favour of predecessors-in-title of the defendants, and even if Ex. P/l was admissible for that limited purpose, Ex. P/2 could not be admitted at all for any purpose whatsoever as there was no parting of possession at the time of the execution of Ex. P/2.
It was also contended that it was not open to the plaintiffs to rely on Exhibits P/l and P/2 for the purpose of showing the amounts for which the disputed shop stood mortgaged with the defendants. If was further contended that the suit was for redemption of the disputed shop and recovery of possession after redemption and it could not be treated as merely a suit for recovery of possession. For this proposition also, Hansia's case, ILR (1958) 8 Raj 126 : (AIR 1958 Raj 102), has been relied upon. It was also urged that no relief could be granted to the plaintiffs on the basis of Ex. P/l as it did not find any mention in the plaint.
9. The first point that emerges for determination is whether the defendants had acquired any mortgagee rights in the disputed shop on account of prescription. As already mentioned, the law of limitation on this point prevalent in the former Jaipur State at all material times was the same as enunciated in Section 28 of the Indian Limitation Act. We may, therefore, consider Section 28 of the Indian Limitation Act. It runs thus --
'At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.'
This section is limited in its application to the extinguishment only of such rights in property forwhich a suit for possession may be instituted. It leys down that at the expiry of the period fixed under the Limitation Act, the right of any person to such a property becomes extinguished. Now the word 'property' is very comprehensive. It includes any interest in property. The right of ownership in a property is an aggregate of several rights possessed by a person in such property.
Ownership in this sense is divisible. A man may mortgage his immovable property and there is a transfer of an interest in that property in favour of the person to whom it is mortgaged. In a transaction of mortgage, there is a parting of interest in the immovable property by the mortgagor and vesting of that interest in the mortgagee. A mortgage has been defined in Section 58 of the Transfer of Property Act as the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan.
Section 59 of the Transfer of Property Act lays down that a mortgage to be effective in law should be effected in the manner provided under that section, that is only by a registered instrument signed by the mortgagor and attested by at least two witnesses in case the principal amount secured is Rs. 100/-/-, or upwards. Now it may be taken to be settled law that if a transaction of a mortgage is not effected in the manner provided by law, there is no transfer of an interest by the mortgagor in favour of the mortgagee in the eye of law.
Now in such cases, a person who has parted with the property has a right to recover possession of the property but the terms and conditions under which he had parted with the possession, whether embodied in a document or not, cannot be proved because of Section 49 of the Registration Act and Section 91 of the Evidence Act. To a suit for the recovery of possession, Article 144 of the Indian Limitation Act is applicable and such suit becomes barred after the expiry of 12 years from the date when possession of the defendant becomes adverse to the plaintiff.
10. The question, therefore, arises as to when possession of a person, who had obtained possession under an unregistered mortgage-deed becomes adverse to the plaintiff.
'An adverse holding is an actual and exclusive appropriation of land commenced and continued under a claim of right, either under an openly avowed claim, or under a constructive claim (arising from the acts and circumstances attending the appropriation), to hold the land against him who was in possession'. (Angell, Sections 390 and 398 : U. N. Mitra's Limitation and Prescription, Vol. I -- Tagore Law Lectures -- 1882--Sixth (1932) Edition, Pace 159).
Now what may be taken to be the intention of a person who has come in possession under an unregistered mortgage-deed and who does not want to go contrary to it? Surely such a person has only the intention to hold the property till his money is paid to him. At the same time he is not claiming ownership in the property, or denying the owner-shin of the person, who had parted with possession in his favour. He is claiming adverse possession in a limited way. He is claiming a limited interest in the property.
The position after expiry of 12, years remains to be examined. Extinguishment of a right by ad-verso possession under Section 28 read with Article 144 of the Limitation Act does not merely depend on the physical fact of dispossession of property but also on the intention of the person holding the possession to claim adversely. Section 28 of the Limitation Act as worded speaks of an extinguishment of a right but the extinguishment does not mean total annihilation of right. The moment the right of one person is extinguished there is the birth of a corresponding right in another person.
The preamble of the Limitation Act clearly mentions that the Act was enacted 'to provide rules for acquiring by possession the ownership of easements and other property.' The Limitation Act has also, therefore laid down rules for acquisition of right by prescription. It is in Sections 26 and 28 that this subject is dealt with. These sections find place in Part IV of the Limitation Act and the heading of Part IV id -- 'Acquisition of Ownership by Possession.''
In a case in which Article 144 of the Limitation Act is applicable, it is not proper to hold that a person, who is in possession of property of another but who claims only a limited right in it, acquires the full right of ownership by adverse possession.'
11. The extent of the adverseness of possession depends on the extent of the claim of right under which possession is obtained and is kept, Where such a claim is restricted to a limited interest in a property, the possession is adverse to that extent only.
'As regards a limited interest in immovable property, adverse possession means possession by a person claiming that interest against the true owner, who is entitled to repudiate it and to recover immediate possession. If the party in actual possession of the property admits that he holds a limited interest in it (e. g., that he holds as mortgagee), he cannot plead prescriptive title in regard, to general ownership but he may, in a suit for ejectment, successfully plead his adverse possession to the extent of the interest claimed by him.' (Mira's Tagore Law Lectures on Limitation and Prescription -- Sixth Edition, Vol. 1, Page 163).
There is a large number of authorities in which it has been held that the limited right can be acquired by adverse possession but in view of the pronouncement of their Lordships of the Supreme Court in Collector of Bombay v. Municipal Corporation of the City of Bombay, 1952-3 SCR 43 : (AIR 1951 SC 469), it is unnecessary for us to refer to the various cases on this subject except those which relate directly to the point involved in this case. In the Supreme Court case, 1952-3 SCR 43 : (AIR 1951 SC 469), the facts were as follows :
In 1865, the Government of Bombay called upon the Municipality which was the predecessor in title of the Corporation of Bombay to remove some markets from a certain site and vacate it, and on the application of the then Municipal Commissioner the Government passed a resolution approving and authorising the grant of another site to the Municipality. The resolution stated further that 'the Government do not consider that any rent should be charged to the Municipality as the markets will be, like other public buildings, for the benefit of the whole community'.
The Corporation gave up the sites on which the old markets were situated and spent a sum of over 117 lacs in erecting and maintaining markets on the new site. In 1940 the Collector of Bombay, overruling the objection of the Corporation, assessed the new site under Section 8 of the Bombay City Land Revenue Act to land revenue rising from Rs. 7,500 to Rs. 30,000 in 50 years. The Corporation sued for a declaration that the order of assessment was ultra vires and that it was entitled to hold the land for ever without payment of any assessment.
Their Lordships of the Supreme Court held that the Corporation had acquired the limited right to hold the land in perpetuity free of rent, but only for the purposes of a market and for noother purposes. Their Lordships observed as follows :
'The sole question for our consideration is whether, on the facts of this case, the respondent Corporation has succeeded in establishing in itself a right in limitation of the right of the Government to assess the land in consequence of a specific limit to assessment having been established and preserved. There is no dispute that by reason of the non-compliance with the statutory formalities the Government Resolution of 1865 is not an effectual grant passing title in the land to the respondent Corporation and is not also an enforceable contract. On the other hand, there is no doubt as to the existence of an intention on the part of the Government to make and on the part of the Corporation to take a grant of the land in terms of the Resolution of 1865 including an undertaking by the Government not to charge any rent. Both parties acted on the basis of that Resolution and the predecessor in title of the respondent Corporation went into possession of the land in question pursuant to the Government Resolution of 1865 and, acting upon the said Resolution and the terms contained therein, the respondent Corporation and its predecessor in title spent considerable sums of money in levelling the site and erecting and maintaining the market buildings and have been in possession of the land for over 70 years. What, in the circumstances was the legal position of the respondent Corporation and its predecessor in title in relation to the land in question? They were in possession of the land to which they had no legal title at all. Therefore, the position of the respondent Corporation and its predecessor in title was that of a person having no legal title but nevertheless holding possession of the land under colour of an invalid grant of the land in perpetuity and free from rent for the purpose of a market, This possession has continued openly, as of right and uninterruptedly for over 70 years and the respondent Corporation has acquired the limited title to it and its predecessor in title had been prescribing for during all this period, that is to say, the right to hold the land in perpetuity free from rent but only for the purposes of a market in terms of the Government Resolution of 1865. The immunity from the liability to pay rent is just as much an integral part or an inseverable incident of the title so acquired as is the obligation to hold the land for the purposes of a market and for no other purpose. There is no question of acquisition by adverse possession of the Government's prerogative to levy assessment. What the respondent Corporation has acquired is the legal right to hold the land in perpetuity free of rent for the specific purpose of erecting and maintaining a market upon the terms of the Government Resolution as if a legal grant had been made to it.'
The aforesaid authoritative pronouncement of their Lordships of the Supreme Court should be sufficient to dispel any doubt on the proposition that a limited right can be acquired by prescription,
12-13. Now let us deal with cases in which mortgage is void or inoperative on account of nonregistration of mortgage-deeds but the possession of the property is transferred by the mortgagor to the mortgagee. As already pointed out, in the eye of law, no interest in the nature of mortgage is created in favour of the so-called mortgagee, as there is no registered document. It is only the adverse possession which is operative. Now as already pointed out, the nature of the adverse possession not only depends on the physical fact of the possession of the property but also on the animus of the person holding the possession.
One cannot get more by adverse possession than what he himself intends to get. It has been held in a number of cases that the person in possession on the basis of an unregistered mortgage, deed acquires a limited mortgagee right by adverse possession. In Madhav v. Narayana, ILR 9 Mad 244, it was held that the kanomdars who held the land under an invalid kanom for more than 12 years, acquired by adverse possession the limited interest for which they prescribed. In Mt. Masato v. Aziz-ullah Khan, 20 Ind Gas 275 (Oudh), it was observed by Lindsay, A.J.C., that when the mortgagees came into possession in 1893, they were without any title though they claimed to hold as mortgagees and there seems to be no doubt that a limited immovable property can be acquired by adverse possession just as much as a proprietary interest.
In Sontyanagopala Dasee v. Kami, AIR 1921 Mad 410 (2), there was a usufructuary mortgage which was void under Section 5 of Act No. 3 of 1895, but the defendants had remained in possession from 1892 to 1914. It was held that the defendants acquired title as usufructuary mortgagees. In the case of Appamma v. Chinnaveadu, AIR 1924 Mad 292, there was a difference of opinion between Spencer J. and Venkatasubba Rao J. on this point. In that case, the plaintiffs had sued to enforce the terms of the usufructuary mortgage praying for redemption.
The mortgage deed was inadmissible in evidence being unregistered. Spencer J. held that a plaintiff who sues for redemption on the strength of an imregistered mortgage deed can never succeed, because for obtaining a decree to redeem, it is necessary to prove the terms of the mortgage, and they cannot be proved by any other evidence than the document itself. This was the effect of Ss, 17 and 49 of the Indian Registration Act read with Section 91 of the Indian Evidence Act.
Venkatasubba Rao J. held that a suit for redemption was in substance for possession. He further held that the defendants in that case had acquired mortgagee rights for adverse possession for a statutory period. After referring to certain cases, ho observed as follows:
'The deed of mortgage being invalid, it confers upon him no right and it cannot be relied upon as the source of the mortgagee's title. On the contrary, his right is based solely upon the fact that he has been in adverse possession of the limited interest for the statutory period. Under the decision of the Privy Council in Varada Pillai v. Jeevaratnarnmal, AIR 1919 PC 44, the mortgage deed may be referred to for ascertaining the character of his possession. It may be referred to for determining the quantum of interest for which the defendants prescribed claiming as mortgagees. When it is said that a mortgagee's interest may be prescribed for, the statement implies that the mortgagee's interest is definite and precise. If the question is, has a person prescribed for a mortgagee's interest in respect of Rs. 100 or Rs. 10,000, the document may be looked at for ascertaining the quantum of interest which the adverse possessor has been claiming or has prescribed for.'
On this difference of opinion, the case was referred to Ramesam J. The learned Judge held that the defendant had acquired limited interest of mortgagee by adverse possession. He further observed :
'To prove the extent of interest acquired by the defendants by adverse possession, the terms of the mortgage asserted by them have to be and may be proved. Such proof cannot be regarded as an attempt to prove the mortgage of 1902 or to adduce secondary evidence of the terms of the unregistered deed of mortgage; for the asserted mortgage-deed need not necessarily be, though very often it will be, identical with the mortgage attempted to be created by means of the unregistered deed of mortgage.'
These observations will be considered in some detail later on, but it is clear that the majority of the Judges were of the opinion that mortgagee rights can be acquired by adverse possession. In Purusot-tamdas v. S.M. Desouza, AIR 1950 Orissa 213, it was held that where a person obtained possession under a void mortgage, he acquired after a lapse of 12 years, a prescriptive right to the limited interest by way of mortgage. In the Patna High Court, in the case of Rhukhan Mian v. Radhika Kumari Debi, AIR 1938 Pat 479, a different view was taken. Wort Ag. C. J. observed, as follows:
'I am aware of a number of cases in India which appear to have the effect of holding that a person can prescribe for a limited interest but I must say that I always fail to understand them, as both a tenancy and A mortgage are creatures of contract, and on fundamental principles. I find it difficult to hold the view that a contract can be brought into existence by prescription. Manohar Lall J. agreed with the above observations of Wort, Ag. C. J., though he pointed out that that particular matter did not require decision in that case. This case was considered by Bapna J. in Ram Chandra v. Ram Hans, 1955 Raj LW 190, and was dissented from. Bapna J. preferred the view taken in the other cases referred to above. It is clear that the view expressed in AIR 1938 Pat 479, was a mere obiter dicta. In Sukra Oraon v. Jagat Mohan Singh, (S) AIR 1957 Pat 245, it was pointed out that in such cases the possession of a mortgagee was permissive in so far as absolute title was concerned and adverse in so far as the limited interest of mortgagee was concerned.
In the latest case of Patna High Court in Rupa Nonia v. Ram Brich Pathak, AIR 1959 Pat 164, the view taken in AIR 1950 Orissa 213, has been followed. In the Allahabad High Court, Iqbal Ahmad J. in Maha Mangal Rai and Co. v. Kishun Kandu, AIR 1927 All 311, has taken the same view.
14. Now coming to the decisions of this Court, we have already referred to an unreported case of the Division Bench -- Sarwanlal v. Gangadhar, Section A. No. 220 of 4949, D/- 12-10-1955 -- to which one of us (Bapna J.) was a party. It was held that mortgagee rights can be acquired by adverse possession even though the mortgage deed was unregistered. But in ILR (1958) 8 Raj 126: (AIR 1958 Raj 102), Wanchoo C. J. and Dave T. took a different view find agreed with the view taken in AIR 1938 Pat 4/9. It was observed that:
'....where a mortgage is invalid in view of the provisions of the Transfer of Property Act or any other law like a Tenancy Act or is inadmissible in evidence in view of Section 49 of the Registration Act or analogous law, there can be no question of a mortgage coming into existence on the mere basis of twelve years' possession by the mortgagee under the invalid mortgage...'
It was further said that if that were to be allowed, it would be clearly going against the provisions of the statute. The case in AIR 1950 Orissa 213, was also referred to and Wanchoo C. J. observed as follows :
'With all respect, we find it very difficult to understand how a mortgage, which is void under Section 59 of the Transfer of Property Act, can become a valid mortgage after twelve years' possession of the mortgagee under the invalid mortgage. This would be holding something directly against the statutory provision in Section 59 of the Transfer of Property Act which lays down that the only way in which a mortgage of immovable property of the value of one hundred rupees and upwards can be treated is by means of a registered instrument.
It would also amount to setting at naught Section 49 of the Registration Act, which makes unregistered mortgages inadmissible in evidence.'
The unreported case of Sarwan Lal was not brought to the notice of that Division Bench, though the case in 1955 Raj LW 190, was taken notice of, but it was distinguished on the ground that that was a suit for possession.
15. We have given careful consideration to the reasons given in Hansia's case, ILR (1958) 8 Raj LW 126 : (AIR 1958 Raj 102), and with all respect, we are unable to agree with the view taken in that ease. Let us examine the various arguments advanced in support of the view taken in that case. The first argument advanced is that if a mortgage which is ineffective because of Section 59 of the Transfer of Property Act becomes an effective mortgage after 12 years' possession of the mortgagee it would be holding something contrary to the statutory provision of Section 59 of the Transfer of Property Act.
It was also said that this will set at naught Section 49 of the Registration Act. It is nobody's case that on the day the unregistered mortgage deed is executed and the possession of the property delivered by the executant of the document to the other party, there is any transfer of interests of the nature of mortgagee rights. What happens in such a case is that one party who is in possession of the immovable property, parts with such possession in favour of the other party. The other party parts with some money in favour of the first party'
Then there are several other terms agreed upon between the parties. Assuming that the consideration is Rs. 100 and upwards, the Transfer of Property Act provides that a mortgage cannot be created except by a registered instrument and as there is an unregistered instrument, there is no creation of mortgage. But the Limitation Act takes notice of one thing i.e., parting of the possession by the so-called mortgagor in favour of the so-called mortgagee. The Limitation Act, as already pointed out, does not merely lay down the law of limitation, but it also provides for acquisition by possession of some interest in the property.
It cannot be seriously contested that one mode of acquiring rights in the property is by prescription. Section 59 of the Transfer of Property Act is applicable to the case of contract but that section does not say that mortgagee's rights cannot be acquired by any other mode apart from contract. It only says that if it is to be acquired as a result of contract, it must be effected in a particular manner to be effective in law.
We fail to see how Section 59 is nullified if any right is acquired by operation of law. If the view suggested in Hansia's case, ILR (1958) 8 Raj 126: (AIR 1958 Raj 102), be the correct one, then there can be no acquisition of rights' in immovable property, except under the provisions of the Transfer of Property Act. With great respect it may be submitted that this is not the correct view. Take the case of an unregistered sale deed. If the so-called vendor has parted with the possession of the property, the vendee acquires full right of ownership by the operation of the law of Limitation after 12 years from the date when he came into the possession. Section 54 of the Transfer of Property Act which provides that in a case of tangible immovable property of the value of Rs. 100/- and upwards the sale can be made only by a registered instrument, is not nullified because the ownership has been transferred on account of the Law of Limitation.
Though there is no sale in the eye of law at the time when the transaction took place, yet there is a transfer of ownership of property later on by operation of Law of Limitation. Thus, we do not think that the provisions of the Transfer of Property Act are in any way affected on account of the acquisition of rights by prescription.
16. For the present we reserve the discussion of Section 49 of the Registration Act, but we may state that the same remarks hold good with respect to that section.
17. At this stage, we take up another point referred to in Hansia's case, ILR (1958) 8 Raj 126: (AIR 1958 Raj 102). It has been said in that case that Article 144 of the Limitation Act contemplates a suit for possession of immovable property or the interest therein and in the case of a mortgage which is not valid from its very inception, there is no creation of any interest in the mortgagee and as such Article 144 has no application. With all humility, we may say that this reasoning is not sound.
Loss of any person's interest in the immovable property may be occasioned by various acts such as trespass by the other party, relinquishment of the right by the owner of such interest, discontinuance of the interest as also by contract directly transferring such interest. In all such cases, it is not necessary that there must always be a valid transaction causing the transfer of interest in immovable property from one person to another. Trespass cannot lie termed to be a legal act.
Yet where there is a trespass on immovable property and some person takes possession of a parcel of land, the owner loses an interest in the property for which he can maintain an action at law. We are unable to agree that a suit for possession of the limited interest is not contemplated when there is no transfer of interest permissible and recognised by law. Further, it may be noted that the so-called mortgagor has parted with possession of the property and in suing for redemption the mortgagor is practically suing for the recovery of possession of the immovable property and not for any interest therein. As already pointed out, the so-called mortgagee has the intention of acquiring only the mortgagee rights and he cannot prescribe for any higher right. The person in possession acquires only the limited right of mortgagee by operation of Section 28 and Article 144 of the Limitation Act.
18. In Hansia's case, ILR (1958) 8 Raj 126: (AIR 1958 Raj 102), the view taken in Bhukhan Mian's case was followed and it may be taken that the view expressed in that case appealed to the Judges deciding Hansia's case so strongly that they preferred to follow it in spite of the fact that the observations were only obiter dicta. Let us proceed to examine the ratio decidendi in that case. Wort A. C. J. was of the view that a tenancy and mort-gage are Creations of contract and they could not be brought into existence by prescription.
There is the high authority of the Supreme Court for the proposition that a limited right can be acquired by prescription and in the several cases of various High Courts cited above it has been held that the mortgagee rights, can be acquired by prescription. We do not think that it is open to the objection that the court of law is reconstructing a eon-tract between the parties where it does not exist. In fact it is the law which creates the relationship of mortgagor and mortgagee and there can be no serious objection if the law says so.
In this connection, we may also refer to the decision of their Lordships of the Supreme Court in the case of Ram Kumar Das v. Jagdish Chandra Deo, AIR 1952 SC 23. In that case, the defendant executed a registered qabuliat dated 8-12-1924 in favour of the Receiver who was in charge of the plaintiffs estate by which he purported to take settlement of land for a period of 10 years at an annual rent. Two payments of annual rent were made. No further payments were made. It was conceded before their Lordships that the qabuliat was not an operative document.
Their Lordships proceeded on the assumption that no operative lease came into existence and the only fact admitted was that the defendant remained in possession of the land belonging to the plaintiff with the permission of the receiver who represented the plaintiff's estate and paid rent to the latter. Their Lordships held that from these facts the tenancy could be fairly presumed and then they proceeded to determine what was the duration of tenancy that was created in that case. In this connection, their Lordships referred to Section 106 of the Transfer of Property Act and observed as follows :
'The section lays down a rule of construction which is to be applied when there is no period agreed upon between the parties. In such cases the duration has to be determined by reference to the object or purpose for which the tenancy is created. The rule of construction embodied in this applies not only to express leases of uncertain duration but also to leases implied by law which may be inferred from possession and acceptance of rent and other circumstances. It is conceded that in the case before us the tenancy was not for manufacturing or agricultural purposes. The object was to enable the lessee to build structures upon the land.
In these circumstances, it could be regarded as a tenancy from month to month, unless there was a contract to the contrary. The question now is, whether there was a contract to the contrary in the present case? Mr. Setalvad relies very strongly upon the fact that the rent paid here was an annual rent and he argues that from this fact it can fairly be inferred that the agreement between the parties was certainly not to create a monthly tenancy. It is not disputed that the contract to the contrary, as contemplated by Section 106, T. P. Act, need not be an express contract; it may be implied, but it certainly should be a valid contract. If it is no contract in law, the section will be operative and regulate the duration of the lease.
* * * The parties here certainly did not intend to create a lease for one year. The lease was intended to be for a period exceeding one year, but as the intention was not expressed in the proper legal form, it could not be given effect to. It is one thing to Bay that in the absence of a valid agreement, the rights of the parties would be regulated by law in the same manner as if no agreement existed at all;it is quite another thing to substitute a new agreement for the parties which is palpably contradicted by the admitted facts of the case.'
The above observations of their Lordships clearly point out that the rights of the parties could be regulated by law if no valid agreement existed and that was not substituting a new agreement for the purpose. Applying these observations to the present case, we are of opinion that a mortgage with possession under an unregistered mortgage deed gets the right under Section 28 of the Limitation Act to hold the possession of the property until the money is paid to him. Such a right is nothing but a right of a mortgagee to hold the property till the money is paid. In coming to this conclusion no assistance is taken of the terms contained in the unregistered mortgage deed; rather these are clearly ignored. The Court is not reconstructing any contract between the parties but giving effect to a relationship created by operation of law. We do not find ourselves- in agreement with the view expressed in Bhukhan Mian's case AIR 1938 Pat. 479 on this point.
19. Now we proceed to take into consideration Section 49 of the Registration Act. It runs as follows:
'No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall:
(a) affect any immovcable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered.
Provided that an unregistered document affecting immoveable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.'
It may be mentioned here that under Section 17(1)(c), a non-testamentary instrument which acknowledges the receipt of payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title, or interest, is required to be registered, but there was no such provision in the relevant law in the former Jaipur State at all material times so far as this case is concerned. Clause (a) of Section 49 provides that an unregistered mortgage deed does not affect any immovable property comprised in the deed. Clause (c) provides that such a document cannot be received as evidence of any transaction affecting such property. The unregistered mortgage-deed is, therefore, inoperative to effect the purpose for which it is executed by virtue of Clause (a).
By virtue of Clause (c), it cannot be received as evidence of the mortgage, or for any other purpose affecting the immovable property; It has been held by their Lordships of the Privy Council in AIR 1919 PC 44, that the unregistered document can be availed of for the purpose of showing the character and nature of the possession if the possession is transferred under the document. This Privy Council case has been invariably followed by all the High Courts in India. A person in possession under an unregistered mortgage deed may be in a position to show apart from the deed the nature of his adverse possession and the quantum of interest which he claims in the property. Section 49 does not in any way militate against the admissibility of such evidence. Section 91 of the Evidence Act also does not exclude such evidence.
Further, if assistance is to be taken from the document, it can be used for the purpose of showing the character and nature of the possession, as held by their Lordships of the Privy Council. Let us analyse the evidence in the present ease in this light. As already mentioned, there is a statement of the counsel appearing for the defendants when examined under Order 10, Rule 1, C. P. C., that his clients claimed to be in possession of the property as they had advanced a loan of Rs. 401/- and they further claimed Rs. 299/- on account of repairs etc. The Expenditure on repairs has not been found to have been proved and it may be taken that the assertion is true only so far as it relates to Rs. 401/-.
Ex. P-1 also gives the circumstances under which the possession of the shop was delivered by the plaintiffs or their predecessors in title to the predeces-sors-in-title of the defendants. Ex. P-1 further recites the fact of payment of Rs. 401/-. As already pointed out under the relevant law in force at the time when Ex. P-1 ,was executed, it was not necessary that any document evidencing such payment should be registered. This transaction could be effected without a registered document and when that part of the document is taken into evidence for the purpose of proving the quantum of interest of the defendants, it is not hit by Section 49 of the Registration Act.
This fact of payment cannot be used for the purpose of creating any right in the property, but may be taken to be a transaction in itself. Explanation 3 to Section 91 of the Evidence Act and illustration (c) points out that such a receipt can be taken into consideration as it is not a term of a contract. This being the position, the document can be used for proving the character and nature of the interest of the defendants in the disputed shop as also the quantum of interest which they claimed in the disputed shop. In this connection, we may refer to the following observations of Jagannadhadas J. in AIR 1950 Orissa 213:
'To determine the character of the possession, the quantum of the interest under which possession is purported to have been taken, has to be ascertained by a reference to the document itself. That quantum is necessarily defined and limited by the terms of the document and does not offend against Sections 17 and 49, Registration Act or Section 91, Evidence Act, The attempt to use the document to prove the quantum of the interest and the character of posses-sion thereunder is not the use of the document for the purpose of enforcing the mortgage itself under the document. The document is not used as the source of the mortgagee's title -- the title itself having been acquired by adverse possession and prescription. I would therefore respectfully follow and adopt this view of the majority in ILR 47 Mad 203: (AIR 1924 Mad 292) :'
20. We have taken notice of all the arguments that have been advanced in Hansia's case and we may say with utmost respect that we do not agree with the view taken in that case. We may, however, emphasise that in the foregoing discussion, we have considered Section 28 with reference to Article 144 of the Limitation Act. It is on account of Article 144 that the question of adverse possession comes in and the person in possession acquires only a limited right in spite of the fact that he is in physical possession of the property. Section 28 when considered with other Articles, may confer the full right of ownership-under Section 28 if the period of limitation for instituting a suit for possession has expired even in case of person who had claimed only a limited right.
When considering this question in relation to Article 144, the intention of the person holding the possession becomes relevant, but under other Articles, | intention may have no relevance at all. Take for example, Article 148 of the Limitation Act. It applies to a case where there is a mortgage in the eye of law. It provides for the period of limitation for a suit against a mortgagee to redeem or recover possession of immovable property mortgaged. After the expiry of the period of limitation prescribed therein, the right of the mortgagor becomes extinguished and the mortgagee becomes full owner in spite of the fact that the mortgagee claimed no other interest except that transferred to him under the mortgage.
21. The next question that arises is as to which Article of the Limitation Act governs the suit of the plaintiffs for redemption of the mortgage so created by the operation of law and when does limitation start. We have already pointed out that the defendants had acquired the rights of the mortgagee by 12 years' adverse possessign. Till the expiry of 12 years, the defendants had not acquired the rights of the mortgagees. They were in permissive possession of the disputed shop and liable to be ejected at the instance of the plaintiffs in a suit for possession. But after they have acquired the rights of mortgagee, there is no reason to hold that Article 148 is not applicable. The applicability of Article 148 is not to be restricted to a case where there is a valid mortgage by a contract between the parties. It is as much applicable to any other case in which the suit is against a mortgagee in whatever way the mortgagee may have acquired the rights of mortgagee. In our opinion, to the present case, Article 148 is applicable.
22. Learned counsel for the defendants argued that the right to recover possession of immovable property accrued to the plaintiffs on the very date when the possession was transferred. He, however, concedes that there was no right to redeem available to them at that time. But his argument is that in the circumstances of the present case, the limitation started when the right to recover possession accrued. In our opinion, the third column of Article 148 is to be read with reference to the first column. The first column clearly provides that the suit must be against the mortgagee to redeem or to recover the possession of immovable property mortgaged. It is only such a suit to which Article 148 applied and unless a mortgage comes into existence, that Article cannot come into operation.
The right to recover possession under Col. 3 of Article 148 means the right to recover possession of immovable property mortgaged. As already pointed out, the right of mortgagee accrued to the defendants or their predecessors-in-title only after 12 years after the delivery of possession under Ex. P-1 and the date when 12 years expired is the date when limitation started running under Article 148 in the present case. As observed by their Lords-hips in Mt. Bolo v. Mst. Koklan, AIR 1930 PC 270, while interpreting the words 'right to sue' under Article 120, 'there can be no right to sue until there is an accrual of a right asserted in the suit and its infringement by the defendant against whom the suit is instituted.' Similarly, there can be no right to redeem or recover possession of the mortgaged property, unless the mortgage comes into existence.
It was argued that extinction of right under Section 28 takes effect retrospectively but that principle is applicable only to preclude the true owner from suing for the recovery of any rents or profits derived by the possessor from the property before the extinction of right though such claim is within the ordinary period of limitation. This is the application of the principle that 'When the principal right is extinguished by limitation, the extinction of an accessory right follows as a matter of course? Their Lordships of the Privy Council applied this principle in Cheang Thye Phin v. Lam Kin Sang, AIR 1929 PC 240, to a case of recovery of interest.
23. In the present case, possession may be taken to have been taken at the earliest on the date of the execution of Ex. P-1, which was on 16-1-1919 and 12 years expired from that date, on 17-1-1931. Under the Jaipur Limitation Act, 1943, Article 148 provided 30 years for a suit for redemption. The plaintiff's suit is within 30 years from 17-1-1931, and is, therefore, within limitation.
24. In the aforesaid discussion, we have taken no assistance of Ex, P-2, as it was contended by the learned counsel for the defendants that Ex, P-2 was altogether inadmissible in evidence, and for this he relied On the observations of their Lordships of the Supreme Court in Mt. Kirpaul Kuar v. Bachan Singh, AIR 1958 -SC 199, where it has been held that:
'The agreement between the parties cannot be admitted in evidence to show the nature of possession of one of the parties subsequent to its date. The party being in possession before the date of the document to admit it in evidence to show the nature of her possession subsequent to it would be to treat it as operating to destroy the nature of the previous possession and to convert what had started as adverse possession into a permissive possession and, therefore to give effect to the agreement contained in it which admittedly cannot be done for want of registration. To admit it in evidence for the purpose sought would really amount to getting round the statutory bar imposed by Section 49 of the Registration Act.'
The importance of Ex. P-2 to the plaintiffs is only that their suit was within 30 years from the date of its execution, but since we have held that the suit of the plaintiffs is within limitation, even if Ex. P-2 is not taken into consideration, it is not necessary for us to decide as to whether Ex. P-2 can be looked at for any purpose whatsoever.
25. Learned counsel for the plaintiff showed his preparedness to pay the amount of Rs. 571/- to the defendants, this being the amount he was liable to pay under Ex. P-2. We, therefore, leave Ex, P-2 altogether out of consideration.
26. Learned counsel for the defendants argued that the plaintiffs had not based their claim on Ex. P-1 and so they were not entitled to redeem on the basis of that document. It is true that the plaintiffs did not give any date of the mortgage in the plaint and have mentioned only Sambats 1978 and 1981 as the years of mortgage in the plaint but they got Exhibits P-1 and P-2 produced from the defendants. Learned counsel appearing for the defendants in the trial court also admitted that the disputed shop was mortgaged for Rs. 401/- on Pos Sudi Poonam, Sam-bat 1975. In view of these circumstances, it cannot be said that the defendants were not cognizant of the fact that the suit was liable to be decreed, if the points of limitation and registration were decided against them. We are of opinion that the defendants are in no way prejudiced if a decree is awarded to the plaintiffs for the redemption of the shop.
27. Lastly, it was contended that the heirs off the original mortgagors Godha and Bala Bux have not been brought on record.
28. We are in respectful agreement with the view taken in the case of Dwarka Prasad v. Gopi Nath, AIR 1952 Raj 69, of this Court on this point and we overrule this contention and held that the plaintiffs are entitled to redeem the disputed shop.
29. The result is that the plaintiffs' suit for redemption stands decreed the mortgage money beingRs. 571/-. We, therefore, accept the appeal, setaside the judgment and decree of the learned District Judge, Sikar dated 5-12-1951, dismissing thesuit of the plaintiffs and award a decree to the plaintiffs for the redemption of the disputed shop, themortgage amount payable being Rs. 571/-. Theusual preliminary decree will be drawn up. As theplaintiffs had not properly drafted their plaint, theyare not awarded any costs in all the three courts,Parties shall bear their own costs throughout.