1. This civil miscellaneous second appeal at the instance of the mortgagee is directed against the order passed by the learned district Munsif, Tiruchirapalli, in O. P.No. 65 of 1981, filed by the respondentherein under Ss. 9 and 17 of the Tamil Nadu Debt Relief Act (Act No. 40 of 1979) (hereinafter referred to as the Act) and affirmed by the lower appellate court in C. M. A. No. 32 of 1982, holding that the mortgage debt in favour of the appellant stood discharged by the operation of the provisions of the Act and directing theappellant to return the original usufructuary mortgage deed and to deliver possession of the hypotheca to therespondent, The property in question bearing door No. 103. Mettu Street. Varaganeri, Tiruchirapalli, belonged to Zuleika Bibi, the mother of the respondent herein having been purchased by her on 7-2-1904. She had executed a mortgage in respect of this property in favour of Tiruchi City Co-operative Bank on 30-5-1970. Later. on 13-11-1970. Zuleika Bibi executed a usufructuary mortgage for Rs. 13,000/- in favour of the appellant fixing a period of five years for redemption. One of the items of consideration under the usufructuarymortgage was the discharge of the earlier mortgage dated 30-5-1970 in favour of Tiruchi City Co-operative Bank. Pursuant to the usufructuary mortgage, possession of the property was also delivered to the appellant 'and the appellant had been realising and enjoying the income from the property in lieu of interest. On 11-11-1979, Zuleika Bibi. executed a deed of settlement in favour of her son. the respondent herein, and directed him to redeem the mortgage in favour of the appellant. The respondent claimed that he was entitled to the benefits of the Act and also the Tamil Nadu Act 13 of 1980 as he was not assessed to any tax and was not otherwise disentitled from claiming the benefits of the Acts and that as the appellant had been in possession of the mortgaged property for more than ten years the entire mortgage was wiped out. On this footing the respondent requested allow redemption of the mortgage and return the also redeliver possession of the hypotheca; but the appellant evaded. Thereupon, on 24-4-1981. the respondent issued a notice to the appellant claiming that as a result of the operation of the provisions of the Act, the usufructuary mortgage in favour of the appellant had become wiped out and that the appellant should deliver possession of the hypotheca to the respondent. To this, the appellant sent a reply on 9-5-1981 stating that the respondent was not entitled to claim the benefits of the Act and that the respondent did not come under any of the exemptions under that Act. Inasmuch as the appellant declined to allow the respondent to redeem the mortgaged property and secure possession, the respondent filed 0. P. No. 65 of 1981, District Munsif's Court, Thiruchirapalli, for a declaration that the usufructuary mortgage dated 1311-1970 stood discharged and wiped out under the provisions of the Act and for directing the appellant to-produce the original usufructuary mortgage with an endorsement of discharge along with other documents of title and also deliver possession of the hypotheca to the respondent.
2. That application was resisted by the appellant on the ground that no grounds existed for granting the reliefs prayed for by the respondent and that the application was legally unsustainable. The execution of the mortgage by Zuleika Bibi on 13-111970 on receipt of consideration in a sum of Rs. 13,000/- was admitted. The execution of the settlement deed dated 11-11-1979 in favour of the respondent and his having become thus entitled to redeem the usufructuary mortgage in favour of the appellant was questioned. The appellant disputed the claim of the respondent that he was entitled to the benefits of the Act. The appellant also denied that the respondent was not assessed to tax and was therefore not disentitled to claim the benefits of the Act. The right to redeem the usufructuary mortgage Linder the terms of the settlement deed dated 11-111979 executed by Zuleika Bibi in favour of the respondent was also disputed.
3. Before the learned District Munsif, on behalf of the respondent Exs. A. 1. to A. 8 were marked and the respondent was examined as P. W. I and his brother-in-law was examined as P. W. 2. while, on behalf of the appellant. Exs. B. I to B. 4 were filed and the husband of the appellant was examined as R. W. 1. On a consideration of the oral as well as the documentary evidence the learned District Munsif found that the respondent was entitled to claim the benefits of the Act, that the deed of settlement dated 11-11-1979 wasexecuted by Zuleika Bibi in favour of the respondent, that under the terms thereof, the respondent had a right to redeem the usufructuary mortgage dated 13-11-1970 in favour of the appellant and that having regard to the possession of the property by the appellant is a usufructuary mortgage for over 10 years. The mortgage debt stood discharged by the operation of the provisions of the Act. On those conclusions, O. P. No. 65 of 1981 filed by the respondent was allowed, Aggrieved by that, the appellant preferred an appeal in C. M. A. No. 32 of 1982 before the District Court, Tiruchirapalli. The lower appellate Court, on a reconsideration of the oral aswell as the documentary evidence, concurred with the conclusions of the trial court and dismissed the appeal. It is the correctness of this that is challenged in this second appeal.
4. The first contention of the learned counsel for the appellant is that the respondent is not entitled to redeem the usufructuary mortgage in favour of the appellant as he has not established that he is entitled to the benefits of the Act. It was also further submitted that the respondent had failed to make out that he was entitled, to claim the benefits of the Act as on the dale when the Act came into force viz., 15-7-1978 and therefore, the respondent should not be permitted to redeem the usufructuary mortgage. In the petition filed by the respondent, 'in para 7. the respondent had stated that he is entitled to the benefits of the Act and that he is not assessed to any tax and he is not disentitled to claim the benefits of the Act in any manner whatsoever. In the counter filed by the appellant, he had denied that the respondent is entitled to the benefits of the Act. In this state of the pleadings. it became necessary for the respondent to establish that he was entitled to the benefits of the Act. It is not the case of either the respondent or the appellant that the respondent owns any property other than the property settled by his mother in his favour tinder the deed of settlement dated 11-11-1979. It is common ground that the respondent had some business in electrical goods. The respondent, examined as P. W. 1, in the course of his evidence, stated that he was not assessed to any profession tax. Ex. A. 3 is a communication received by the respondent from the Commissioner, Tiruchirapalli Municipality to the effect that for the years 1978-79, 1979-80 and 1980-81. the respondent had not been assessed to profession tax. This would also substantiate the evidence of P. W. I that he had not been assessed to profession tax at all. In the course of his crossexamination, P. W. I reiterated that he had not paid any profession tax. The suggestion that a sum of Rs. 12 was paid as profession tax by P. W. I was denied by him. In respect of 1981-82, P. W. I statements that there was no assessment for profession tax. 'The nature of the crossexamination of P. W. I at the instance of the appellant clearly established that even according to the appellant, if at all the respondent was disqualified, it was on the ground that payment of profession tax and not on any other ground. Even with reference to such payment, the evidence of P. W. I supported by Ex. A. 3 clearly indicates that the respondent had not been assessed to the profession tax at all. On the other hand, R. W. L. in the course of his chief-examination stated that the respondent pays profession tax but he could admit in the Course of his cross-examination that there was no document excepting Ex. B. 4. That document purports to be an extract from the profession tax demand register for the year 1981-82. The name of the respondent is not given there. Apart from this, several columns relating to the income, collection assessment etc.. have all been left blank. Even R. W. I admitted that he does not know whether the respondent paid profession tax for 1981-82. R W. 1, no doubt, stated that it is wrong to I state that-no profession tax was assessed and recovered from the respondent from 1974 to 1979 and that the profession tax was levied but tile respondent did not pay. However, R. W. I would frankly admit that there are no records whatever to establish this. Thus the payment of profession tax was the only ground upon which the claim of the respondent that he was entitled to the benefits of the Act was attempted to be negatived. But on a consideration of the evidence Ex. A. 3 and P. W. I and Ex. B. 4 and R. W. L. it is clearly established that at no point of time the respondent was assessed to profession tax so as to disqualify him from claiming the benefits of the Act. It is true that by reason of the settlement deed dated 11-11-1979 the respondent became the owner of the property over which the usufructuary mortgage had been created in favour of the appellant. Even with reference to the house property. it is seen from Exs. A. 4 to A. 6 that the annual rental value was only Rs. 264/- and the half yearly property tax was only Rs. 40.50 and that would not assistto negative the claim of the the benefits of the, Act to the disqualifications in S-3 of the Act. Undoubtly,therefore, the courts below were quite correct in holding that the respondent was entitled to claim the the benefits of the act.
5. Earlier it has been seen that the mortgage had been executed by the mother of the respondent in favour of the appellant on 13-11-1970 and on the date when the Act came into force, the liability under the mortgage was subsisting. On the execution of the deed of settlement in favour of the respondent on 11-1-1979. the liability to discharge tile mortgage which had become due and had remained it debt on the date when the Act came into force. became that of the respondent under the terms of the deed of settlement. It is therefore clear that there was a debt and the respondent the meaning of was a creditor already does not in that the respondent disqualified and claim benefits subsequently after the execution of the deed of settlement in his favour. There is, therefore, nothing wrong on the basis of the materials available in this case in holding that the respondent was a debtor even on the date on which the Act came into force. The appellant had not placed any materials to clearly convince the court that the respondent was not in a position to claim the benefits of the Act prior to 15-71978 or even prior to 11-11-1979, the date of the execution of the settlement in his favour by his mother. Under those circumstances. the respondent should be .held to be entitled to the benefits of the Act even from the (late when the Act came into force and not only subsequently. The first contention of the learned counsel f(~r the appellant cannot. therefore. be accepted.
6. The learned counsel for the appellant next contended that even assuming that the respondent was entitledto claim the benefits of the Act, yet, as one who succeeded to the equity of redemption of the mortgagor, he could not redeem, unless the original mortgagor was entitled to the benefits of the Act and if she was not, then the respondent cannot take advantage of the provisions of the Act for seeking a redemption of the usufructuary mortgage in favour of the appellant. Reliance, in this connection was also placed by the learned counsel uponthe decision in Ghewarchand v. Nagarajan (1980) 1 MLJ 39 t. Though this argument might at first blush appear to be attractive, on a closer examination. it is seen that there is no substance in it. It is seen fromExs. A. I and A. 2 that the mother of the respondent had been only a housewife and it does not appear that she had any other source of income. In the notice issued under Ex. A. 7, in para 9, the respondent had clearly stated that her mother did not own any other property except the mortgaged property and that she did nothave any other income. In the reply Ex. A. 8, the appellant has stated that the respondent or Zuleika Bibi will not be entitled to the benefits of the debt laws: but it is not stated on what basis either Zuleika Bibi or the respondent will lie so disentitled. P. W. 2 had been examined for the purpose of proving the execution of the settlement deed P-x, A. 2 by Zuleika Bibi in favour of the respondent as he had figured as one of the attestors to that document; Besides being an attestor, P; W. 2 is also the son-in-law of Zuleika Bibi His evidence is to the effect that excepting the house usufructuarily mortgaged in favour of the appellant, Zuleika Bibi did not have any other property. R. W, I would state that he does not know whether Zuleika Bibi had other properties besides the house. A careful scrutiny of the evidence does not disclose that Zuleika Hibi owned any property other than the house. Exs. A. 4, A, S and A. 6 show that the annual rental, value of the house earlier owned by Zuteika Bibi for 1978-79, 1979-80 and 1980-81 was fixed at Rs. 264/- and the halt yearly property tax was assessed at Rs, 40-50/- If this was the position with reference to 1978-79, 1979-80 and 1980-81, then the annual venial value as well as the property tax assessment could not have been higher in the four half years immediately preceding I st of March, 1978. It is not the case of the appellant that Zuleika Ribi was assessed to such property tax as to take her out of the definition of a 'debtor' under S, 10) of the Act, In the absence, therefore, of any evidence regarding the owning of other properties by Zuleika Bibi, the conclusion is irresistible that she owned only one item of house property, which was also usufructuarily mortgaged in favour of the appellant and that property was also assessed to property tax at rates much lower than that contemplated under the provisions of the Act. so that Zuleika Bibi herself was a person who was entitled to claim the benefits of the Act on the date on which the Act came into force viz 15-7-1978. In this view of the matter, the appellant cannot be heard to contend that the original mortgagor Zuleika Bibi was not a person entitled to the benefits of the Act and therefore, the respondent as the successor to her interest, cannot also claim the benefits of the Act. The decision in Ghewarchand v. Nagarajan (1980) 1 MU 391 relied upon by the learned counsel for the appellant does not in any manner assist, for that case dealt with t -provisions of Tamil Nadu Act IV of 1938, as subsequently amended, which are very different from the provisions of the Act with which we are concerned in this case. Apart from that, on the materials available in this case, it is clear that Zuleika Bibi herself was a person entitled to claim the benefits of the Act and therefore the question of a person, not being entitled to the benefit of the Act, executing a settlement deed to enable the settle to claim such benefits and thereby defeating the provisions of the Act. would not arise at all. This contention of the learned counsel for the appellant has also to fail.
7. Lastly, the learned counsel for the appellant contended that the courts below were in error in having directed delivery of possession of the property to the respondent, as according to him, there is no provision for such delivery of possession under S. 17 of the Act. On the other hand. the learned counsel for the respondent would draw attention to S. 9(i)(a) of the Act and contend that thereunder on account of the uninterrupted possession and enjoyment of the mortgaged property by the appellant for 10 years. the mortgage debt was deemed to have been wholly discharged on the expiry of the period of 10 years and the discharge of the mortgage would mean that the relationship of mortgagor and mortgagee is at an end and delivery of possession of the security had to be effected to the mortgagor. Strong reliance in this connection is also placed by the learned counsel for the respondent upon this decision in Prithi Nath Singh v, Suraj Ahir : 3SCR302 . In the cases of mortgages, it is open to the debtor entitled to the benefits of the Act to seek a declaration regarding the amount due under the mortgage depending upon the period during which the mortgagee had been in possession of the mortgaged property. If such period of enjoyment of the mortgagee was in excess of 10 years or more, then, statutorily, discharge of the mortgage is brought about, while, if such enjoyment had been for a period of less than 10 years, then, the Court may direct the payment of amounts by the mortgagor before he can seek to redeem the mortgaged property. In a case of statutory discharge, as in this case, brought about by S. 9(5)(a) of the Act, the position is that the relationship of mortgagor a n of mortgagee is severed on account of the operation of the statute and no amount is payable by the debtor to the mortgagee as a condition precedent for redemption of the mortgage. That would mean that the mortgage comes to an end and the right of the mortgagee to continue to remain in possession of the mortgaged security is also terminated and thereafter, the mortgagee has no right to remain in possession, but is bound and obliged to make over possession of the mortgaged property to the erstwhile mortgagor. Precisely that has been directed to be done by the courts below in this case. That such is the real position is also clearly brought our by the decision of the Supreme Court in Prithi Nath Singh v. Suraj Ahir : 3SCR302 relied on by the learned counsel for the respondent, and it has been field thereunder as follows : (at page 1042).
'When the mortgage money is paid by the mortgagor to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage was to secure payment of money advanced by way' of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be, an interest different from that of a mortgagee 's interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan' must come to an end on the payment of mortgage money.
(5) Further, the definition of usufructuary mortgage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgagee property ceases when the mortgagee money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and to appropiate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortage comes to an end and the right of the mortgage to remain in possession also comes to an end'.
8. These observations of the Supreme Court would squarely apply to this case, though the discharge is brought about by operation of the provisions of the Act and not by payment. That would not, however make any difference to the applicability of the principle that after the discharge of the mortgage,, the, mortgagee has no right to continue in possession, but is bound to deliver possession of the hypotheca to the erstwhile mortgagor. The courts below have merely recognised and given effect to this principle and no exception can. therefore, be taken to the orders passed in that regard by the courts below. No other point was urged. Consequently, the Civil Miscellaneous Second Appeal is dismissed with costs.
9. Appeal dismissed.