1. This is a suit for redemption. The 3rd defendant's father obtained a mortgage from the 1st defendant's husband in the year 1876. According to the terms of that mortgage the amount of the debt was to be paid at the expiration of 8 years. Then it goes on to say 'in case if the interest on the said principal accruing every year or the principal not being paid, you shall immediately on the expiry of the stipulated period of 8 years take possession of the said land etc. and shall happily enjoy the same in succession from son to grandson and as long as the sun and moon last.' The mortgagee was not entitled to possession immediately according to the terms of the document, but he was to take possession of the property as owner after the time fixed for payment elapsed. On the '2nd July 1885 the 1st defendant's husband sent a petition Exhibit II to the Tahsildar in order that patta for the land might be transferred to the 3rd defendant's father. The petition stated 'I have put Nagalla Vobalakandu in possession for Rs. 1,475/- being principal and interest due by mo according to the document executed and registered on 26th August 1876.** Therefore please remove my name.' If Exhibit A is a redeemable mortgage then apparently Exhibit II taken by itself, it might be argued, would not affect the plaintiff's right to redeem but Exhibit I throws further light on what led to the petition Exhibit II. Exhibit I is a receipt for a sum of Rs. 250 paid on the date of the document, 20th November 1885. It contains this recital--'As owing to my inability to pay to you the money due under the deed of mortgage, I have on 2nd July 1885 relinquished the lands and for patta being issued to you &c.; ' It then acknowledges payment of a sum of Rs. 250 which is stated to be paid out of grace to the executant of the receipt. The language of the recital in our opinion is conclusive that at the time when Exhibit II was put in there was relinquishment of all right to the property by 1st defendant's husband. That relinquishment we shall assume for the decision of the case to be invalid to extinguish the right of redemption. But it shows that 3rd defendant's father was to hold possession from its date as owner with full rights to the property. Admittedly the 3rd defendant has been in possession of the property ever since, i.e., for a period much longer than 12 years. The question is whether that possession has made him the absolute owner of the property by prescription. The argument for the appellant is that his possession must be taken to have been under the rights possessed by him under Exhibit A. as mortgagee and it is strenuously argued by Mr. Seshagiri Aiyar the learned Vakil for the appellants that a mortgagee who is entitled to take possession under the mortgage cannot be permitted to acquire any higher right by virtue of his possession. It is no doubt true that the 3rd defendant was entitled to take possession under Exhibit A and we shall assume that possession so taken would be held by him as mortgagee. But assuming all this what was there to prevent both the mortgagor and the mortgagee from agreeing that the mortgagee should from a certain date hold possession as owner? Such an agreement may not be valid to confer immediate title on the mortgagee but as far as we are aware there is no principle of law which prevents both parties from agreeing what the character of the possession to be held by the mortgagee should be from a certain date. It is quite true that a mortgagee cannot by a mere assertion. of his own or by any unilateral act of his convert his possession as mortgagee into possession as absolute owner. That is a principle in favour of the mortgagor which prevents the mortgagee from altering the legal character of his possession by his own act or assertion. That has been laid down in several cases, one of the earliest of which is Ali Muhammad v. Lalta Baket. I.L.R. (1904) M. 336. But they have no bearing on the question of the effect of an agreement between both parties that the mortgagee should hold possession as owner and not as mortgagee.
2. The cases cited by Mr. Seshagiri Iyer do not establish the position taken up by him. Kurri Veera Beddi v. Kurri Bopi Reddi I.L.R. (1904) M. 336 merely laid down that where there is an ineffectual sale the vendee cannot set up that he has acquired any title by estoppel. It did not deal with the result of possession in him for more than the statutory period. To allow the defendant to set up a title by estoppel in such a case would be virtually allowing to escape the provision of the Transfer of Property Act which requires a registered conveyance to effect a sale. In the Privy Council case of Sri Raja Bapamma Row v. Sri Veer a Pratapa Ramachandra Raju I.L.R. (1896) M. 249 their Lordships held that possession was given Co the mortgagee in his character as mortgagee. In that view he was of course liable to be redeemed. In Dasharatha v. Nyahal Chand I.L.R. (1891) B. 134 the Court held that possession was obtained and held by the defendant as mortgagee. The character of the possession must of course determine what right would be acquired by virtue of possession. In Byari v. Puttanna I.L.R. (1890) M. 38 the ineffectual conveyance was executed by one of the members of an Aliyasantana tarwad with the conseut of two others. Such consent of course could not be binding on the tarwad. The person who executed the conveyance and those who consented to it had no severable interest in the tarwad property. The result therefore was that the former character of the possession which began previously to the conveyance was not altered by the conveyance or by the consent of some members only of the tarwad which could not operate as against the tarwad as a whole. We are of opinion that both parties were entitled to agree in what character the 3rd defendant could hold possession and that the plaintiff who purchased the equity of redemption from the 1st defendant cannot now claim to redeem on the footing that the 3rd defendant's possession has throughout been as mortgagee.
3. We dismiss the second appeal with costs.