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Karuppanan Servai Vs. Daivasigamania Pillai - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberLetters Patent Appeal No. 52 of 1949
Judge
Reported inAIR1954Mad650; (1954)IIMLJ12
ActsTransfer of Property Act, 1882 - Sections 59A, 60 and 67; Limitation Act, 1908 - Schedule - Articles 124, 134 and 148
AppellantKaruppanan Servai
RespondentDaivasigamania Pillai
Appellant AdvocateR. Gopalaswami Aiyangar, Adv.
Respondent AdvocateD. Ramaswami Aiyangar, Adv.
DispositionAppeal allowed
Cases ReferredMuthaya Shetti v. Kanthappa Shetti
Excerpt:
(i) property - transfer - sections 59 a, 60 and 67 of transfer of property act, 1882 and articles 124, 134 and 148 of schedule to limitation act, 1908 - appeal arose out of suit for redemption - transfer by mortgagee as owner does not operate as discharge of mortgage by mortgagor - transferee entitled as against mortgagor at least to what his transferor was entitled - sale deed purported to be a transfer of property absolutely - it was not mere assignment of mortgage - it was impossible to construe payment of 'thirwa' by purchasers as payment in terms of mortgage bond - transfer under sale deed fall within scope of article 134 and appellant entitled to protection. (ii) redemption - respondents and his predecessors-in-title had knowledge of transfer more than 12 years before institution of.....venkatarama aiyar, j.1. this appeal arises out of a suit for redemption instituted by the respondent. the properties which are the subject-matter of this litigation consist of two plots survey no. 61 and survey no. 115 in the village tirumehoor in the district of macturai. they belonged to two brothers solamalai piliai and vaduhanatha pillai. on 7-8-1830 solamalai pillai executed a usufructuary mortgage for rs. 100 over survey no. 115 in favour of one srinisava iyengar, ex. d. 1. on 5-5-1892 solamalai pillai and vaduhanatha pillai executed a usufructuary mortgage ex. p. 1 over both survey no. 61 and survey no. 115 in favour of one venkatadri iyengar for rs. 500 directing him to redeem the mortgage ex. d. 1 in favour of srinivasa iyengar. the present action is for the redemption of this.....
Judgment:

Venkatarama Aiyar, J.

1. This appeal arises out of a suit for redemption instituted by the respondent. The properties which are the subject-matter of this litigation consist of two plots Survey No. 61 and Survey No. 115 in the village Tirumehoor in the District of Macturai. They belonged to two brothers Solamalai Piliai and Vaduhanatha Pillai. On 7-8-1830 Solamalai Pillai executed a usufructuary mortgage for Rs. 100 over Survey No. 115 in favour of one Srinisava Iyengar, Ex. D. 1. On 5-5-1892 Solamalai Pillai and Vaduhanatha Pillai executed a usufructuary mortgage Ex. P. 1 over both Survey No. 61 and Survey No. 115 in favour of one Venkatadri Iyengar for Rs. 500 directing him to redeem the mortgage Ex. D. 1 in favour Of Srinivasa Iyengar. The present action is for the redemption of this mortgage. Venkatadri Iyengar got into possession of Suryey No. 61 under this mortgage and before the time for redeeming Ex. D. 1 had arrived, he executed on 5-1-1893 a sub-usufructuary mortgage over both the items in favour of one Kandaswami Achari for Rs. 175 Ex. D. 2. On 21-12-1893 Venkatadri Iyengar borrowed a further sum of Rs. 50 from Kandaswami Achari on a simple mortgage of his mortgage rights under Ex. P. 1.

Kandaswami sued to enforce this simple mortgage in O. S. No. 146 of 1898 on the file of the Court of the District Munsif, Turumangalam, obtained a decree on 21-4-1898 Ex. D. 3 and in execution of the decree purchased the hypotheca on 1-11-1898 (vide the sale certificate Ex. D. 4) and got into possession of Survey No. 61. One of the points in controversy between the parties in this litigation is as to what was actually sold in execution of the decree in O. S. No. 146 of 1898 on the file of the District Munsif's Court, Tirumangalam, whether it was only the mortgage right under Ex. P. 1 or the properties themselves which were mortgaged thereunder.

Kandaswami as purchaser under Ex. D. 4 Instituted O. S. No. 591 of 1899 on the file of the court of the District Munsif, Madurai for redeeming the usufructuary mortgage over Survey No. 115 Ex. D. 1. The defendants to this action were the two sons of this original mortgagee Srinivasa Iyengar who was by this time dead; and also Solamalai. Pillai and Vaduhanatha Pillai. The sons of the mortgagee pleaded that Solamalai Pillai had redeemed them and that they had no further interest in the property. Solamalai Pillai and his brother were 'ex parte'. On 19-3-1900 the court decreed redemption on payment of Rs. 100 to Solamalai Pillai within two months. The amount was paid on 8-5-1900 (Ex. P. 2) and possession was taken through court on 8-8-1900 Ex. D. 5(c).

2. In execution of a decree passed against Kandaswami in S. C. S. No. 1269 of 1910 on the file of the court of the Subordinate Judge of Madhurai, his interest in the two items was brought to sale and purchased by one Balaguru Naidu (vide Sale Certificate Ex. D. 11). He got into possession of the properties and on 14-6-1922 he sold them to one Rajammal for a sum of Rs. 900 Ex. D. 14. On 23-1-1926 Rajammal released her interest in favour of one Alagaraswami Naidu Ex. D. 16 and he in turn sold the properties to the defendant on 23-3-1940 under Ex. D. 20. On 19-8-1943 the respondent who is the son of Solamalai Pillai instituted the suit out of which the present appeal arises for redeeming the usufructuary mortgage Ex. P. 1. The plaint alleges that in execution of the decree in O. S. No. 146 of 1898 on the file of the court of the District Munsif of Tirumangalam it was only the mortgage right under Ex. P. 1 that was brought to sale; that under Ex. D. 4 what passed to Kandaswami was only the mortgage right under that document; that it was only that mortgage interest that passed to Balaguru Naidu under Ex. D. 11; that as purchaser from him under Ex. D. 14 Rajammal could acquire only the mortgage interest to which her vendor was entitled; that likewise, the defendant as purchaser from Rajammal under Ex. D. 20 acquired only that mortgage interest and that, therefore, the plaintiff as representing the mortgagor Solamalai Pillai was entitled to a decree for redemption.

The defendant pleaded that what was sold in execution of the decree in O. S. No. 146 of 1898 was not merely the mortgage right under Ex. P. 1 but the properties themselves; that under the sale certificate Ex. D. 4 Kandaswami acquired full ownership over the properties; that Ex. D. 11 conveyed that absolute title to Balaguru Naidu; that the purchasers under Exs. D. 14 and D. 20 thus became owners of the property and not merely assignees of the mortgage interest under Ex. P. 1; and that the plaintiff had no right to redeem. It was further contended that as the defendant and his predecessors-in-title had been in possession as full owners of the properties from 8-8-1900 (vide Ex. D. 5(c) ), they had acquired a title by adverse possession and that in any event the suit was barred by Article 134 of the Limitation Act.

The District Munsif of Madurai taluk held on a construction of Ex. D. 4 that what was sold in court auction in execution of the decree in O. S. No. 146 of 1898 was not merely the mortgage right under Ex. P. 1, but the properties themselves and that, therefore the title of the mortgagor had been extinguished by the sale. On the question of limitation he held that Article 134 would not be applicable as there was no transfer by the mortgagee of the hypotheca but only a court sale. But he also held that as Kandaswami and his successors had been in possession as absolute owners for a period of over 40 years, they had acquired a title by adverse possession. In that view he dismissed the suit. On appeal by the plaintiff the District Judge agreed with the District Munsif that Ex. D. 4 conveyed not merely the mortgage right over the properties themselves absolutely and that the title of the mortgagor had been extinguished. In this view he did not consider it necessary to express any opinion on the question of limitation. The appeal was accordingly dismissed.

The plaintiff preferred S. A. No. 416 of 1046 against the decision and that was heard by Satyanarayana Rao J. He held that on a proper construction of Ex. D, 4 what was sold was only the mortgage interest under Ex. P. 1 and that, therefore the court auction did not put an end to the right of the mortgagor to redeem. On the question of limitation, he held that no question of adverse possession could arise as between mortgagor and mortgagee; and dealing with Article 134, Limitation Act, he held that it did not apply to court sales under Exs. D. 4 and D. 11 and-that though the sale under Ex. D. 14 would be a transfer under Article 134, it would not be a transfer by the mortgagee under Ex. P. 1, but by persons who had succeeded to his rights and that Article 134 had no application to such transfers. In the result, he held that the suit was within time under Article 148 and granted a decree for redemption. Against this judgment the defendant, has preferred the present appeal under the Letters Patent.

3. The first question for determination in this appeal is whether Kandaswami acquired full ownership over the properties by reason of the court sale in execution of the decree in O. S. No. 146 of 1898 on the file of the Court of the District Munsif of Tirumangalam, and whether the right of the mortgagor to redeem Ex. P. 1 was extinguished thereby. Under Section 60, T. P. Act the right of redemption can be extinguished only by act of parties or decree of court. No question of any act of parties terminating the right of redemption arises here. The question is whether it has been extinguished by a decree of court. In -- 'Raghunath Singh v. Hansraj Kunwar' it was held that the decree of court contemplated in this section is the final decree in a mortgage action foreclosing the mortgagor of his right to redeem. Vide also --'Chinna Subbarao v. Matapalli Raju'. AIR 1950 FC 1 (B). Admittedly no suit was filed on the basis of Ex. P. 1 for redemption or for foreclosure. The contention of the appellant is that it is open to a sub-mortgagee in an action to en-force his mortgage to obtain a decree foreclosing the right of not merely his mortgagor but also of the main mortgagor to redeem; that in O. S.| No. 1-16 of 18G8 Solamalai Pillai, the owner, was impleaded as second defendant obviously for the purpose of giving him an opportunity to exercise his right of redemption and that the decree Ex. D. 3 and the sale thereunder would operate to extinguish the right of redemption in respect of Ex. P. 1.

That a sub-mortgagee can sue to foreclose the right of not merely his mortgagor but of also the owner is well settled, vide -- 'Vengannan Chettiar and Sons v. Ramaswami Pillai', AIR 1943 Mad 498 (C) and a final decree passed in such an action would operate to extinguish the right of redemption. But the question is, was such a decree passed in o. S. No. 146 of 1898. The plaint in that suit has not been filed and it is not known why Solamalai Pillai was impleaded as a party. But the decree Ex. D. 3 makes it clear ;hat he was only a 'pro forma' party to the action. Ex. D. 3 mentions the amount due to the sub-mortgagee from his mortgagor and directs that in default or payment the 'hypothecated property' should be sold and that any balance remaining after payment of the amount due to the plaintiff should be paid to the first defendant who was the son of the mortgagee. There is no adjudication of the rights of parties under Ex. P. 1. The amount due by Solamalai Pillai to the first defendant is not declared; no period is fixed for his redeeming Ex. P. 1; and there is no provision for any payment of surplus sale proceeds to him.

In AIR 1943 Mad 498 (C) discussing the rights of sub-mortgagees against the original mortgagor, the Chief Justice observed as follows :

'A sub-mortgagee has two courses open to him. He can, if he wishes, limit his suit to the sub-mortgagor, in which case he can only ask for the sale of the sub-mortgagor's interest in default of payment of the decretal amount.

On the other hand, he may join the original mortgagor, and ask for a decree for the sale of the mortgaged property in default of payment. In this case the relief to which he is entitled is to be gathered from form No. XI in App, D. to the Civil Procedure Code. In that form the original mortgagor is described as defendant No. 1 and the original mortgagee as defendant No. 2. The form provides for a declaration of the amount due to defendant No. 2 on his mortgage and then directs that defendant No. 1 shall pay into court the amount due to defendant No. 2 and that on payment into court of the money the plaintiff shall be at liberty to apply for payment out. In default of payment, the plaintiff may apply to the court for a final decree for sale. The form also provides that if defendant No. 2 pays into court to the credit of the suit the amount adjudged due to the plaintiff, but defendant No. 1 makes default in the payment of the amount due to defendant No. 2, the latter shall himself be at liberty to apply to the Court for a final decree for sale.'

In O. S. No. 146 of 1898 Kandaswami plainly chose to adopt the first course and the decree Ex. D. 3 is the one appropriate for such a course. It is not in conformity with form No. XI in App. D. to the Civil Procedure Code. Indeed at the time of Ex. D. 3 Solamalai could not have exercised his right of redemption of Ex. P. 1 as the period fixed for redemption had not expired. In -- 'Muthu Vijia v. Venkataclialam Chetty', 20 Mad 35 (D) in affirming the right of a sub-mortgagee to obtain a decree for sale against the original mortgagor, Subramauia Aiyar J. observed :

'A sub-mortgagee can ask for a sale of the original mortgagor's interest in cases and in circumstances which would have entitled the original mortgagee on the date of the sub-mortgage to claim such relief.'

There cannot be any doubt, therefore that Ex. D. 3 could not be read as declaring the right of redemption in respect of Ex. P. 1 and that neither the decree nor the execution proceedings in pursuance thereof could operate to extinguish the right of the mortgagor to redeem Ex. P. 1.

4. It is argued that according to the sale certificate Ex. D. 4, the properties sold were the lands themselves and not merely the mortgage right over them and that the mortgagor who was a party to the suit could not claim any rights in opposition thereto. But if Ex. D. 4 is read in the light of the decree, it can be construed only as transferring the mortgage interest under Ex. P. 1. No doubt, both the items of lands are described, but that is only for precise identification of the mortgage which is what is actually sold and that is described as

'the right (in respect of) the usufructuary mortgage for Rs. 500 (regarding the properties aforesaid) in favour of the father of the first defendant by the second defendant, subject to the sub-mortgage for Rs. 175 in favour of the plaintiff by first defendant's father.'

The reference to the property as being subject to the sub-mortgage for Rs. 175 Ex. D. 2 can only mean the usufructuary mortgage and not the equity of redemption. Moreover, if the right of redemption could be extinguished under Section 60, T. P. Act only by a decree for foreclosure and if the decree passed is not one of foreclosure, it is difficulty to see how proceedings taken in execution of that decree could extinguish the right of redemption.

5. It is also argued that in the plaint in O. S. No. 591 of 1899 Kandaswami claimed that he had become the owner of the properties by reason of his purchase under Ex. D. 4 that Solamalal who was defendant No. 3 did not traverse it, but remained 'ex parte' that under the decree passed in that suit Solamalai was treated as standing in the shoes of the mortgagee Srinivasa Iyengar ard redeemed by Kandassami on payment of Rs. 100 and that possession was also taken from Solamalai in execution of this decree. No significance can be attached to this as on the date of the decree Solamalai had no right to redeem Ex. P. 1. Nor can what happened in that suit affect the true effect of the purchase by Kandaswami under Ex. D. 4. We accordingly agree with Satyanarayana Rao J. that what was sold under Ex. D. 3 and purchased under Ex. D. 4 was only the mortgage rights under Ex. P. 1 and that the plaintiff has not lost his right to redeem the same by reason of the proceedings in O. S. No. 146 of 1898, District Munsif's Court, Tirumangalam or O. S. No. 591 of 1899, District Munsif's Court, Madurai.

6. It is next contended on behalf of the appellant that the suit is barred by limitation either under Article 134 or under Article 14, Limitation Act. Article 334 in so far as it is material for the present appeal runs as follows:

'To recover possession of immoveable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration--12 years when the transfer becomes known to the plaintiff.'

As to the nature of the transfers to which this article is applicable the Privy Council observed in -- 'Skinner v. Kunwar Naunihal Singh', AIR 1929 PC 158 (E) as follows:

'The transfer of property mortgaged contemplated by Article 134 is admittedly something other than an express transfer of the original mortgage. The Article contemplates a transfer by a mortgagee purporting to transfer a larger interest than that given by the mortgage or at any rate an interest unencumbered by a mortgage'.

For the Article to apply, therefore, there must be a transfer by a mortgagee and that transfer must be in his assumed character as owner and not as mortgagee. Transfer as defined in Section 5, T. P. Act means an act by which one person conveys property to another and it has accordingly been held that sales in 'invitum' are outside the scope of Article 134 and that purchasers of the interest of a mortgagee in court auction sale cannot claim the benefit of that Article. -- 'Vide Ahamed Kutti v. Raman Nambudri', 25 Mad. 99 (F); --'Sudarsan Das v. Ramkripal Das ', (G). Therefore, even construing Ex. D. 4 as purporting to convey the full ownership in the lands and not merely the mortgage rights under Ex. P. 1, it does not fall within the purview of Article 134, nor the purchase by Balaguru Naidu in execution of the decree against Kandaswami, Ex. D. 11. Coming next to Ex. D. 14, that was a sale by Balaguru Naidu to Rajammal and it purports to convey the full ownership of the lands to the purchaser; and it is clearly a transfer within the meaning of Article 134.

The appellant contends that limitation commences under Article 134 on 14-6-1923, the date of Ex. D. 4 and the present action for redemption which was instituted on 19-8-1943 is barred by limitation. The answer of the respondent to the contention is that Article 134 is in terms limited only to transfers by mortgagees and not by their representatives in interest; that as Ex. D.14 is a sale not by Venkatadri Iyengar, the original mortgagee, but by Balaguru Naidu who stepped into the shoes of the mortgagee through two court auction sales (Ex. D. 4 and D. 11), a transfer by him is outside the scope of Article 134 and that therefore, the suit is within time under Article 148 of the Limitation Act. This argument found favour with Satyanarayana Rao J. who held, agreeing with the decision in -- 'Munawar All v. Jagmilan Ram' : AIR1927All177 , that the sale by Balaguru under Ex. D. 14 was not protected by Article 134. He observed,

'In my opinion therefore, the Article has no application to the case of a private purchaser from the court auction purchaser of a mortgagee's interest. No doubt he might have acquired the mortgagee's interest, but he cannot be treated as a mortgagee within the meaning of Article 134, and for its application.'

The appellant disputes the correctness of this view and contends that 'mortgagee' in Article 134 must be construed as including the representatives-in-interest of the mortgagee and he cited the decision in -- 'Ghasiram v. Krishna', : AIR1915All422 (I); -- 'Abdul Aziz v. Munnilal' : AIR1930All417 and -- 'Kannuswami Thanjiroyan v. Muthuswami Pillai', AIR 1918 Mad 1201 (K), in support of his position. In -- ' : AIR1915All422 (I)', one Shambu executed a usufructuary mortgage in favour of one Hulasi on 6-9-1856. In execution of a decree against Hulasi the mortgage was sold and purchased by one Ghasi in 1877. On 11-12-1898 Ghasi sold his rights to one Likhi purporting to be full owner. The heirs of the mortgagor sued to redeem the mortgage dated 6-9-1856 and it was contended on their behalf that Article 134 was inapplicable because the transfer was not by the mortgagee Hulasi, but by his representative in-interest Ghasi.

In overruling this contention Chamier J. observed:

'It is contended that Article 134 does not apply to the case, because defendants 4 to 7 did not purchase from the original mortgagee of the property. It is conceded that a purchaser from the son or other heir of the original mortgagee of the property would be entitled to rely upon Article 134, but it is contended that a person who purchases from the auction purchaser of the rights of the original mortgagee is not entitled to rely upon that Article. Several cases, supposed to bear upon this question, have been cited to me; but on examination they are all found to be totally irrelevant, and it is useless to discuss them. I have no hesitation in holding that a person who purchases by private treaty from an auction purchaser of the rights of the original mortgagee is entitled to rely upon Article 134. The auction purchaser of the rights of the mortgagee steps into the shoes of the mortgagee.'

7. This decision was followed in -- ' : AIR1930All417 (J)', where Dalai J. observed:

'In my opinion, the law is clear on the point that if Munnilal had been in possession for 12 years after purchase or if any of his predecessors-in-interest had been a purchaser by private treaty from an auction purchaser, the suit would have been barred. The ruling of a single Judge reported in -- ' : AIR1915All422 (I)', is well supported by authority such ss the case reported in -- 'Venku Shettithi v. Ramachandrayya', AIR 1926 Mad 81 (L).'

In this court there is a decision of a Bench reported in -- 'AIR 1918 Mad 1201 (K)', directly dealing with this point. The facts of that case were that the owner of the suit property had executed a usufructuary mortgage over it in 1885; that was sold in execution of a decree against the mortgagee. Against the purchaser in that execution, a rent decree was passed and in execution of that decree, his interest was sold in court auction in 1893. The purchaser under this rent sale sold the property in 1896 as absolute owner under Ex. III and the purchaser under Ex. III sold the properties in turn to the defendant in the suit in 1906. The suit for redemption was instituted in 1911. The defendant pleaded that it was barred by limitation under Art, 134. It was held by this court that while the court auction sales would not be governed by Article 134, the sale under Ex. III by the court auction purchaser in 1896 fell within the scope of that Article and that the suit which was laid more than 12 years from that date way barred. The following observations of Spencer J. may be quoted:

'Against that, it is argued that the purchaser of the mortgagee's interests is not himself a mortgagee within the meaning of the Article. In a similar case decided by Chamier J. in -- ' : AIR1915All422 (I)', it was held 'contra' that the auction purchaser of the rights of the mortgagee steps into the shoes of the mortgagee and that the subsequent purchasers by private treaty from the auction-purchaser can rely on Article 134 to defeat a plaintiff seeking to redeem......I am, therefore, of opinion that as 12 years have elapsed since the date of the transfer under Ex. III the suit is time barred under Article 134.'

This decision, it must be stated, was not brought to the notice of the learned Judge whose Judgment is now under appeal.

8. The respondent relies on the decision in --' : AIR1927All177 (H)'. There, the court auction purchaser of a mortgagee's interest purported to sell the property as absolute owner and the purchasers resisted the suit for redemption on the ground that it was barred under Article 134. In rejecting this contention, Iqbal Ahmad J. observed as follows:

'I am unable to agree with the lower appellate court as to the applicability of Article 134 to the present case. Article 134 is limited to the cases where the property mortgaged has been transferred by the mortgagee for a valuable consideration. That Article applies only to cases where a transferee for value from a mortgagee takes that which is 'de facto' mortgage upon a representation made to him and in the full belief that it is not a mortgage, but an absolute title. That article, in my opinion, cannot protect persons who are not transferees from the mortgagee, but are transferees from persons other than the mortgagees or their heirs.'

These observations undoubtedly support the contention of the respondent. But it has to fie observed that no reference is made in the Judgment to the earlier decision of Chamier J. in : AIR1915All422 (I) or to the decision of this court in AIR 1918 Mad 1201 (K) where it was approved. It must be mentioned that in : AIR1927All177 (H) the suit for redemption was in the result dismissed as barred under Article 144, though Article 134 was held inapplicable and this conclusion was based on the decision in -- 'Ram Piari v. Eudh Ram', : AIR1921All389 (M). There, the facts were that there was a usufructuary mortgage in 1861; in 1899 the usufructuary mortgagee executed a mortgage as if he were the owner. This mortgagee filed a suit to enforce his mortgage, obtained a decree, and purchased the property in Court auction in 1902 and then sold the properties as absolute owner under two sale deeds dated 1904 and 1905. A suit for redemption was filed in 1915 and the question was whether it was in time. The contention that it was barred under Article 134 was rejected, the court observing 'Article 134 is excluded by the fact that the vendors of the defendants had not purchased from the mortgagee.'

But it was held that the defendants had acquired a title by adverse possession and a suit was in consequence barred under Article 144. Then dealing with the contention that under Article 148 the mortgagor had a period of 60 years for redeeming the mortgage, the court observed

'Where the property mortgaged is passed from the mortgagee to a third party who has obtained rights thereunder for valuable consideration in good faith and in full belief that he was purchasing the transferor's proprietary interest and the transferor represented that he held that proprietary interest, it cannot be said that such a transfer is a transfer of the mortgage interest so as to render Article 148, Limitation Act (No. 9 of 1908) applicable .... Article 148 cannot, therefore, apply to the present suit and if that Article does not apply, the only other possible Article that can apply is Article 144.'

This decision is thus a clear authority for the position that when the transfer does not purport to be an assignment of the mortgage, but an out and out sale, the transferee is not a mortgagee within the meaning of Article 148 and that a suit against such a transferee is not one for redemption governed by Article 148, but one for ejectment governed by Article 144 and that the title of the mortgagor could be extinguished by adverse possession of the transferee.

9. This decision was approved by a Bench of this Court in -- 'Natesa Thevar v. Narayanaswami Padayachi', : AIR1952Mad844 (N). In that case there was a usufructuary mortgage dated 14-2-1891. The mortgagee executed two simple mortgages on which suits were instituted by the sub-mortgagees and in execution of the decrees obtained by them the properties were sold in 1902 and 1904. The court auction purchasers sold the properties as absolute owners in the year 1913 and the defendant in the suit was a representative-in-interest of that purchaser. A suit for redemption instituted in 1946 was held by the Courts below to be barred under Article 134. In this court a contention was raised that Article 134 was inapplicable to a transfer by a person who was not the original mortgagee and reference was made to the decisions in : AIR1930All417 . The learned Judges noticed the conflicting views expressed on the question, but did not consider it necessary to pronounce any decision on it, as the auction purchasers, and their transferees in the case before them could not be considered to be mortgagees.

This is what they stated :

'It has to be observed that in AIR 1918 Mad 1201 (K), what was acquired by the auction purchasers was only the mortgage rights and. not the absolute title to the properties mortgaged. Whatever justification there might be for charade rising the auction purchaser in such a case as one stepping into the shoes of the mortgagee, none exists in a case, as in the present one where the auction purchasers acquired full ownership in the suit properties and not a limited mortgage right and therefore could not be called mortgagees within the meaning of Article 134. They never occupied such a position with reference to the suit properties, they having purported to have purchased not the limited mortgage interest but the whole interest in the property. The expression 'mortgagee' cannot include a person who has acquired full interest in the property and not the limited mortgage right.'

In the view that the auction purchasers and their representatives were not mortgagees, it was held that Article 144 would apply and that that would exclude Article 143. The decision in : AIR1921All389 (M) was followed and the case was remitted for a finding on the question of adverse possession. It is argued for the appellant on the basis of the decisions in : AIR1921All389 (M) and : AIR1952Mad844 (N) that the present suit is governed by Art, 144 and that it is barred by adverse possession commencing from 1900 as found by the District Munsif. We entertain considerable doubt as to the soundness of the decision in : AIR1921All389 (M) that Article 148 will apply only when the person sought to be redeemed is a mortgagee or his assignee and that where the transfer by the mortgagee purports to convey an absolute interest, the transferee is not a mortgagee liable to be redeemed under that Article.

Whatever the parties to the transaction might believe in or declare, no person can confer on his transferee a title better than his own; and if in fact his interest is only that of a mortgagee, his transferee can succeed only to that interest, notwithstanding that the deed purports to transfer full ownership to him; and his rights and obligations under the transfer will only be that of a mortgages.

To take the converse case, if a mortgagee purports to sell the hypotheca as owner, and before the lapse of 12 years from the date of sale the mortgagor seeks to recover possession from the purchaser, can he do so without paying the mortgage amount? Can he say that as the transferee claims to be a purchaser and not an assignee of a mortgage, he is not a mortgagee and has therefore no right to ask for the payment of the mortgage amount; and that as the sale deed was in operative to confer title as owner and as no title had been acquired by prescription, he was liable to be ejected as a trespasser? The answer is simple. The transfer by the mortgagee as owner does not operate as a discharge of the mortgage by the mortgagor and the transferee is entitled as against the mortgagor at least to what his transferor was entitled. If he is then entitled as against the mortgagor to the rights of the original mortgagee, is he not also subject to the obligations of his transferor in favour of the mortgagor? The real question in such cases is riot what the transferee purported to acquire, but what in fact he did acquire and if what he did acquire was only the interest of the mortgagee, he is liable under the law to be redeemed as a mortgagee and Article 148 will apply.

10. In AIR 1929 PC 158 (E), the facts were that one T. Skinner executed a usufructuary mortgage in September 1863. He died in 1864 leaving behind a will by which he bequeathed his estate to his three sons in succession for life with a remainder in fee simple to his daughter. Believing himself to be absolutely entitled to the estate, one of the sons T. V. Skinner renewed the mortgage of 1863 in 1867 and in 1872 his interest in the estate was sold in execution of money decree and purchased by the mortgagee. Believing that he had become entitled to the estate as absolute owner, his successor-in-interest sold the estate on 24-9-1903 to the Nawab of Rampur who in turn sold it to the defendant in 1904. After the death of the three sons, the daughter filed a suit for redemption on 11-5-1920. The High Court of Allahabad held that the suit was barred under Article 134. The Privy Council agreed that this Article applied, but they held that as limitation under that Article commenced to run during the lifetime of a life estate-holder, it did not under Article 140 avail against the remainderman and therefore, Article 134 did not bar the plaintiff.

Then, holding that as the suit was laid within 60 years it was in time, that is under Article 148, the Privy Council observed :

'It is conceded and is plain that Article 134 does not protect the transferee of a mortgage by express transfer, and it appears to their Lordships idle to suppose that it protects a person who has taken a transfer only of a mortgage, but has taken it without his knowledge mistakenly supposing that he was getting something better in circumstances like the present, where he cannot maintain his superior title by reliance of any period of limitation. Resting as he does on the interest of mortgagee he is liable to be redeemed. The period of redemption began, it is true, in the lifetime of T. Skinner .... But the statutory period runs for 60 years and had not expired when the plaintiff filed the present suit.'

In the view of their Lordships of the Privy Council, then, the fact that the transfer took the form of a sale and not assignment of a mortgage did not preclude the applicability of Article 148 and the liability, of the transferee to be redeemed as a mortgagee. It may also be mentioned that the decision in : AIR1921All389 (M) is cited in the judgment of the High Court in -- 'Naunihal Singh v. A. G. Skinner' : AIR1925All707 which was reversed on appeal in AIR 1929 PC 158 (E). It is extremely doubtful whether : AIR1921All389 (M) could be regarded as good law after the decision of the Privy Council in AIR 1929 PC 158 (E). It is unnecessary to discuss this matter further, as we are of opinion that the present case is governed by Article 134, and that, therefore, Article 144 which is a residuary Article has no application.

11. To understand the true scope of Article 134 it is necessary to read it along with Article 148. Article 148 provides a period of 60 years for redemption of a mortgage and Article 134 cuts down that period to 12 years when there is a transfer by the mortgagee. Article 134 is, therefore, an exception to Article 148. In both the Articles the same word 'mortgagee' is used. It must clearly have the same meaning in both the Articles. If 'mortgagee' in Article 148 should mean only the original mortgagee, then the present action for redemption of Ex. P. 1 would not be maintainable as against the defendant who is purchaser from Balaguru. But if 'mortgagee' in Article 148 includes all persons who succeed to the interest of the mortgagee, it must bear that meaning under Article 134 as well and the appellant will be entitled to its benefit. If the defendant is under liability to be redeemed under Article 148, he is also entitled to the protection afforded by Article 134. Likewise, the right of a mortgagor to redeem under Article 148 is subject to the bar enacted in Article 134 in favour of a transferee.

12. Section 59-A, T. P. Act provides that 'reference in this Chapter to mortgagors and mortgagees shall be deemed to include reference to persons deriving title from them respectively'.

This section which was introduced by the Amending Act of 1929 is only a statutory recognition of what had been already laid down as the law and under this definition, a mortgagee for the purpose of redemption would include all persons who derive title from him and it is immaterial whether that title is derived by sale in 'invitum' or by private treaty or whether it is by act of parties or by operation of law. Therefore, Balaguru Naidu who acquired the interests of the mortgagee under court sale must be held to be a mortgagee within the definition in Section 59-A and would be a mortgagee both for the purpose of Article 148 and Article 134.

13. Looking at the principle of the thing also, it is difficult to discover any reason why the transferees from the mortgagees should be entitled to protection under Article 134 and not transferees from the representatives of the mortgagee. Indeed the need for protection is greater in the latter than in the former class of cases. Persons who take a transfer from the original mortgagee have the means of knowing and may be presumed to know that the transferor possesses only a mortgage interest in the property. But as time elapses, knowledge of the original mortgage would have faded and purchasers are likely to be misled by long possession and might purchase the property in the belief that the representative of the mortgagee was the full owner. That this is a serious possibility will be clear when it is remembered that the period provided for redemption is the longest prescribed for any suit in the Limitation Act. It is 60 years. As observed by Seshagiri Aiyar J. in -- 'Muthaya Shetti v. Kanthappa Shetti', AIR 1919 Mad 1097 (P), Article 134 is really a branch of the law of prescription and the reason for giving the protection of the statute of repose is weightier in the case of the transferees from representatives of the mortgagee than in the case of transferees from the original mortgagee.

14. In the result, we must hold that the transfer by Balaguru under Ex. D. 14 will fall within the scope of Article 134 and the appellant will be entitled to the protection afforded by it if the requirements of that Article are satisfied.

15. The question is whether the plaintiff had, as required by Article 134, knowledge of the alienation under Ex. D. 14 and whether the suit was instituted after a period of 12 years from the date of such a knowledge. It is argued for the respondent that there is no averment in the written statement that the plaintiff or his pre-decessor-in-title had knowledge of the transfer and that therefore, the plea of limitation must fail. That will be taking too technical a view of the pleadings. The defendant did distinctly plead that the suit was barred by limitation under Article 134. As for knowledge, the defendant pleaded that Kandaswami and his successor-in-interest had been, to the knowledge of Solamalai and persons claiming under him, in adverse possession from 1900 onwards claiming title as owners. Though these allegations were made in support of a title by adverse possession, they are sufficient to satisfy the requirements of Article 134. No issue was framed whether the suit was barred by Article 134, though the point is discussed in the judgment of the learned' District Munsif. As observed by Satyanarayana Rao J.

'no attention seems to have been paid by either party to the third column of Article 134 and to establish that the knowledge was either within or without the period of 12 years.'

The appellant filed C. M. P. No. 7017 of 1949 for admission of additional evidence in the appeal. The evidence sought to be admitted consists of documents and they are stated to have a bearing on the question of limitation. This petition Is opposed by the respondent. If additional evidence is to be admitted, the plaintiff must be given an opportunity to rebut it. Having regard to the fact that no issue was framed raising the question of limitation under Article 134, we think that in the interests of justice the parties should be given a fresh opportunity to adduce evidence on the point. We accordingly frame the following issues :

'Whether the plaintiff or his predecessors-in-title had knowledge of Ex. D. 14 and if so, wasit more than 12 years prior to suit?'

The District Munsif of Madurai taluk will trythis issue and submit his finding thereon withintwo months of the receipt of this order. Time forobjection is two weeks. No order is necessary inC. M. P. N. 7017 Of 1949 as both the parties aregiven liberty to adduce all evidence bearing on theabove issue.

(Finding .....)

(After the return of the findings by the trial court, the Court delivered the following judgment: (Delivered by Venkatarama Aiyar J.) )

16. This appeal arises out of a suit for redemption instituted by the respondent. The defendants contested the suit on the ground that it was barred by Article 134, Limitation Act. We hold that Ex. D. 14 purported to be a transfer of the property absolutely and that it was not a mere assignment of a mortgage and that therefore it would fall within the scope of Article 134, if the other conditions were satisfied. One of those conditions is whether the plaintiff and his pre-decessors-in-title had knowledge of the transaction more than 12 years prior to the suit. There was on that point neither an issue nor a finding by the courts below. We accordingly directed the learned District Munsif to record a finding on that question. Both parties were given liberty to adduce fresh evidence. The learned District Munsif has now returned a finding that the plaintiff and his predecessors-in-title had knowledge of the transfer more than 12 years before the institution of the suit.

17. Mr. D. Ramaswami Aiyangar, learned counsel for the respondent, contends that as the evidence shows that 'thirwa' was being paid to the plaintiff, that is consistent only with the transferees remaining in possession as mortgagees, as the thirwa was payable only under the terms of the mortgage. But Ex. D. 14 is a sale deed which purports to convey the property absolutely and this is how it has been construed by ail the courts. It is, therefore, impossible to construe the payment of thirwa by the purchasers as a payment in terms of the mortgage bond. The evidence of D. w. 1 is that the plaintiff had been informed that the property was going to be sold and that has been accepted by the learned District Munsif. The finding of the lower court is one of fact, and there is evidence in support of it. There are no grounds for interfering with it.

18. We accept the finding, allow the appeal, and dismiss the suit with costs throughout.


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