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K. Ambu Nair Vs. E.C. Kelu Nair and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1930Mad305
AppellantK. Ambu Nair
RespondentE.C. Kelu Nair and anr.
Cases ReferredTani Bagavan v. Haribin Bhavani Dubai
Excerpt:
- - 21,157-2-2 under a registered mortgage deed dated 8th december 1892 but that the properties were being enjoyed by defendant 2's tarwad as tenants after the mortgage, that defendant 2's tarwad having fallen into arrears of rent, defendant 1's tarwad filed o s. 31,000 which was fixed as the amount due on the mortgage for principal and arrears of rent and costs is paid within three years from the date of the decree, the mortgagor was to redeem the properties from the mortgage, that in default of such payment the mortgagee was to recover possession of the properties in execution of that decree and enjoy the same on usufructuary mortgage right, and that if rs. 31,000 was paid at any time thereafter, possession was to be given up to the mortgagor together with all the mortgage right,.....1. defendant 1 is the appellant. this appeal arises out of a suit tiled by the plaintiff to redeem a mortgage. the plaintiff prays that defendant 1 may be directed to surrender possession of the properties mentioned in sch. a to the plaint to the plaintiff on payment by him within a time to be fixed by the court of such amount as may be found due to defendant 1 towards the usufructuary mortgage referred to in the plaint on taking an account of the amounts received by defendant 1 and the amount which he is liable for in respect of damages for waste committed on the properties and to hand over to the plaintiff all the title deeds, rent deeds and other documents connected with the property. the plaintiff also claims mesne profits at the rate of 2,000 paras of paddy per year.2. the case for.....
Judgment:

1. Defendant 1 is the appellant. This appeal arises out of a suit tiled by the plaintiff to redeem a mortgage. The plaintiff prays that defendant 1 may be directed to surrender possession of the properties mentioned in Sch. A to the plaint to the plaintiff on payment by him within a time to be fixed by the Court of such amount as may be found due to defendant 1 towards the usufructuary mortgage referred to in the plaint on taking an account of the amounts received by defendant 1 and the amount which he is liable for in respect of damages for waste committed on the properties and to hand over to the plaintiff all the title deeds, rent deeds and other documents connected with the property. The plaintiff also claims mesne profits at the rate of 2,000 paras of paddy per year.

2. The case for the plaintiff is that the properties described in Sch. A to the plaint originally belonged to defendant 2's tarwad, that the said properties along with two other items of property held by the tarwad on arwar or mortgage right were usufructuarily mortgaged by the tarwad to defendant 1's tarwad for Rs. 21,157-2-2 under a registered mortgage deed dated 8th December 1892 but that the properties were being enjoyed by defendant 2's tarwad as tenants after the mortgage, that defendant 2's tarwad having fallen into arrears of rent, defendant 1's tarwad filed O S. No. 22 of 1898 in the Sub-Court of South Kanara for recovery of possession of the properties and arrears of rent or in the alternative for recovery of the mortgage amount, that O.S. No. 22 of 1898 was ultimately compromised between the parties and a rajinama decree was passed on 2nd January 1899 to the effect that if Rs. 31,000 which was fixed as the amount due on the mortgage for principal and arrears of rent and costs is paid within three years from the date of the decree, the mortgagor was to redeem the properties from the mortgage, that in default of such payment the mortgagee was to recover possession of the properties in execution of that decree and enjoy the same on usufructuary mortgage right, and that if Rs. 31,000 was paid at any time thereafter, possession was to be given up to the mortgagor together with all the mortgage right, that it was also provided that for 3 years after the date of the rajinama decree the mortgagor should be enjoying the properties paying assessment thereon and pay the defendant 1's tarwad and annual rent of 2000 paras of paddy, that defendant 2's tarwad having failed to pay the rent as mentioned, in the rajinama decree, the mortgagee obtained possession of the properties on 16th March 1900, that there was a second mortgage for Rs. 1675, on which the mortgagee obtained a decree for sale of the equity of redemption in O.S. No. 44 of 1912, that in execution of a personal decree against defendant 2's tarwad the right of the mortgagor was purchased by one Subraya Kamathi in 1909 subject to the usufructuary and simple mortgage rights held by defendant 1's tarwad over the said properties and Subraya Kamathi conveyed his right to the plaintiff on 22nd April 1913, that the plaintiff who has thus become absolutely entitled to the equity of redemption deposited Rs. 6,115-12-0 being the amount due to defendant 1 as per decree in O.S. No. 44 of 1912 and redeemed the simple mortgage dated 7th December 1901, that as regards the two items of property sub-mortgaged under the deed dated 8th December 1892, they were redeemed and a portion of the mortgaged properties was acquired by the Local Fund Department and the mortgagee received two sums of Rs. 490 and 450 towards the mortgage for which credit has to be given, that the mortgagee has been committing waste by cutting timber trees and pulling down buildings etc., that he is liable for damages to the extent of Rs. 6,700 as per particulars given in the plaint which amount also is to be deducted from the amount due under the mortgage and that when the plaintiff applied in execution to get back possession of the properties as mentioned in the rajinama decree, the defendants contended that execution was barred by limitation and this contention was upheld both by the lower Court and the High Court. The plaintiff, therefore, files this suit to redeem the properties.

3. Defendant 1 (mortgagee) who is the contesting defendant admits the mortgage set out in the plaint and the decree in O.S. No. 22 of 1898. He admits having taken possession of the properties covered by the decree in execution of it. He also admits that the plaintiff became the purchaser of the equity of redemption but disputes that the sale certificate relied on by the plaintiff covers the entire mortgage property. He denies, however, that the plaintiff has any subsisting right to redeem on the ground that the original mortgage had been superseded by the decree in O.S. No. 22 of 1898 and that the plaintiff's only remedy is by execution which having become barred, the right to redeem is extinguished. He admits that he got a decree in O.S. No. 44 of 1912 on the simple mortgage of 7th December 1901 and that the mortgage has been redeemed. Ho denies that his getting the decree saves the plaintiff's right to redeem or gives him any cause of action. He denies that the property acquired by the Local Fund Department under the Land Acquisition Act formed any portion of the mortgage properties. He denies also that some other items which he specifies in para. 9 of the written statement formed part of the mortgage. He raises certain objections to the schedules in paras. 10 and 11. He denies that he committed any waste but on the contrary states that he and his ancestors effected improvements for about Rs. 30,000 of which sum he claims payment before redemption.

4. Defendant 3 who is the younger brother of defendant 2 filed a written statement admitting the plaintiff's claim.

5. The plaintiff as the karnavan of his Echekan tarwad sues defendant 1 as the karnavan of the Kodath tarwad and defendants 2 and 3 as representing the Beloor Maloor tarwad.

6. The Subordinate Judge passed a decree for redemption. He held that the present suit was maintainable and is not barred by reason of the judgment to the effect that the execution of the rajinama decree in O.S. No. 22 of 1898 was held to be barred by limitation. He was of opinion that the rajinama decree having been kept alive the relationship of mortgagor and mortgagee and the mortgagee having entered into possession in such a character under that decree the right of redemption is not put an end to and that the provision in that decree that execution might issue only gives a speedy and less expensive method of redemption and does not take away the right of a suit to redeem after three years which is the period of limitation for execution.

7. As regards the other issues relating to the various items, the parties put in a joint statement which the Judge refers to in his judgment the effect of which was that the objections to certain properties were not pressed, the plaintiff did not press his claim for damages and defendant 1 did not press his claim for improvements. As regards mesne profits, the correctness of the claim was not disputed, the Judge found that the plaintiff was entitled to mesne profits at 2000 paras of paddy a year. Hence the appeal.

8. The main contention of the appellant is that the present suit is maintainable as the plaintiff's only remedy is to obtain relief by execution of the decree in O.S. No. 22 of 1898 within the period of limitation prescribed by law and that as he has not done so the right to redeem has become extinguished. It is also contended that the suit is barred under-section 47, Civil P.C., also by res judicata by reason of the decree in O.S. No. 22 of 1898 and that there was no admission of the plaintiff's right by the defendant to prevent the bar of limitation.

9. For the respondents it is contended that on a proper construction of the decree in O.S. No. 22 of 1898 which was founded on the rajinama put in by the parties the relationship of mortgagor and mortgagee was not put an end to by that decree, that as the mortgagee admittedly entered into possession under the clause entitling him to possession as mortgagee the relationship of mortgagor and mortgagee was not extinguished by the decree and that the right given to execute the decree has simply the effect of giving the mortgagor an alternative remedy of a suit for redemption. It is contended that as the effect of the clause in the rajinama limiting the rights of the parties to execution is to curtail the period of limitation of 60 years prescribed by Article 148, Lim. Act, to three years which is the period prescribed for execution proceedings by Article 182, there is a manifest clog on the equity of redemption and that such a clause in an ordinary mortgage document would be invalid and the consent decree puts it in no higher position. Under Clause 2 of the rajinama decree as the sum of Rs. 31,000 had to be deposited in Court before an application for possession can be made by the mortgagor, there is no question of keeping the decree alive by steps-in-aid of execution and under Section 48, Civil P.C., the decree can even in such cases be kept alive only for 12 years. It is also contended that the mortgagee having got a second mortgage and sued on the second mortgage on the basis that the first mortgage was subsisting and having obtained a decree on that basis it is not open to him to repudiate his position as mortgagee especially as that suit was long after the right of execution under Article 182, Lim. Act, became barred by limitation.

10. In order to appreciate these contentions it is necessary to set out the terms of the mortgage deed, rajinama, and the consent decree in O.S. No. 22 of 1898 in some detail. There is practically no dispute on the facts. The mortgage which is dated 8th December 1892 is filed as Ex. A in the suit. It purports to be a deed of illadarwar i.e., a usufructuary mortgage deed. The main terms are as follows:

We have hereby usufructuarily mortgaged to you all the under mentioned entire properties... for Rs. 27,157-2-2 and we have received the amount of consideration as detailed below... we have received the sum of Rs. 27,157-2-2 in full as detailed above. Therefore, for the said entire amount you shall enter into the under-mentioned entire property and enjoy the same on illadarwar right by paying the tirva every year to the first of us. We shall pay the sum of Rs. 27,157-2-2, the kanam amount, to you whenever we get the same in one lump sum on the vishuday of that year and get back the said properties, the original documents and this document also together with your receipt for such payment.

11. Then follows the schedule of the properties.

12. It is admitted that although the deed purported to be a deed of usufructuary mortgage entitling the mortgagee to immediate possession, possession was not given. In such eases the law gives the party two remedies. One remedy is to sue to get possession which the party is entitled to under the terms of the mortgage deed and the other is to sue to get back the mortgage money. Section 68, Clause (c), T.P. Act, gives the mortgagee the right to sue for the mortgage money in case where the mortgagee being entitled to possession of the property, the mortgagor fails to deliver the same to him or to secure the possession thereof to him without disturbance by the mortgagor or any other person. There was some doubt as to whether this entitled the mortgagee to claim a charge on the property but it has now been held that he can apply for sale and we need only refer to Subbamma v. Narayya [1918] 41 Mad. 259.

13. Suit No. 22 of 1898 was filed by the plaintiff, the main relief asked for being to recover possession which was wrongly withheld and the alternative relief was for sale if for any reason possession could not be given. This appears from the rajinama decree passed in that suit (Ex. C). It recites that the suit was for a decree either to get delivery of the mortgaged properties described in the plaint Sch. A and three years' mesne profits and further profits till date of delivery or in the alternative to recover the mortgage money with interest at six per cent per annum by sale of the mortgage properties. The main relief was a relief which flowed from the rights created by the mortgage document and was to enforce such rights which necessarily kept the relationship of mortgagor and mortgagee alive. The alternative relief was to extinguish that right and to get back the mortgage money which was asked if the first relief could not be granted. So that it is clear that the primary object of the mortgagee in filing that suit was to get possession as mortgagee. The rajinama was on the footing that possession was to be given as mortgagee and that the rights were to subsist. This is clear from the terms of the rajinama decree which simply embodies the terms entered into by the parties. The decree, after setting out the scope of the suit and the parties who appeared, says:

upon perusing the rajinama put in by the parties and given below it is ordered that the terms of the said rajinama be and the same are hereby passed into a decree.

14. The rajinama which is set out in the decree runs as follows:

1. We should pay in one lump sum to plaintiff within three years from this date on the liability of the plaint property mentioned in Sch. A of the plaint, Rs. 31,000 settled to be paid to plaintiff by us in respect of the plaint kanam amount and the arrears of rent due for this year, that is, due up to this 1074, Kollum and also for costs of suit and redeem the said property from plaintiff's arwar and take possession of the same together with the documents. If we fail to pay the amount on that vaide (due date), plaintiff should take possession of the plaint property from us by taking out execution of the decree which will be passed in terms of this raji, and should enjoy the same on payment of tirva by arwar right. When the property is being enjoyed taking possession of the same in that manner if we pay the said kanam amount of Rs. 31,000 to plaintiff on any year on the vishusankramana vaide, he should immediately relinquish his arwar right on the said property and deliver the same to us. If he fails to deliver the same to us in that manner we should take possession of it by taking out execution.

2. We ourselves should enjoy the said property on payment of tirva thereof till the above mentioned vaide of three years and pay to plaintiff rent fixed at the rate of 2,000 paras of paddy par annum every year from the ensuing 1075, Kollum before the end of Vrichika month, that is before 10th December conveying the same to Thilayipallayapore of Kollutu village and measuring the same by geni phara and obtain his receipts. If we fail to pay the said fixed rent or any portion thereof within the vaide in that manner, plaintiff should take possession of the plaint property by taking out execution, and enjoy the same on payment of tirva by arwar right and he should recover from us the said arrears of rent, that is, the price amount of the said paddy at the then rate by taking out execution. When he takes possession and enjoys the property in that manner if we pay the kanam amount of Rs. 31,000 mentioned in para. 1 on the vishusankaramana vaide of any one year in one lump sum, he should relinquish his arwar right and deliver the said property back to us. If he fails to deliver the same in that manner, we should take possession of it by taking out execution.

3. We ourselves should bear our costs of this suit. We should withdraw the suit No. 27 of 1898 filed by Nos. 5 to 51 among us. In that suit the plaintiff should bear his costs and we should bear our costs. To this effect we have agreed to the settlement made in the presence of the grihastas.

4. Number 1 among us is the karnavan of our tarward, No. 2, Kelu is the next karnavan. Defendants 6, 25 and 20 are dead. They have no other heirs except ourselves.

Therefore it is prayed that a decree may be passed in the manner stated above. Khauli submitted on the said date by the plaintiff Kodatha Kora Nair. It is true that the raji was effected between me and the defendants in the presence of the grihastas as stated above by them. I have consented to pass a decree in that manner.

15. It is admitted that under this raji the mortgagee took possession under Clause 2 which provides that if the mortgagor did not pay the rent of 2,000 paras of paddy per annum as provided for in that clause, the plaintiff in that suit should be entitled to take possession of the plaint property by taking execution and enjoy the same on payment of tirva by arwar right i.e., mortgage right. The right under this clause of the mortgagor was to get back possession if he desired on payment of Rs. 31,000 on the vishu day of any one year. The mortgagee having taken possession under this clause, it is clear that his possession is possession as mortgagee on the footing that the mortgage between the parties subsists and there is nothing in the decree which puts an end to the relationship of mortgagor and mortgagee. As we said before, the main object of the suit was to recover possession under the mortgage deed and the decree only effectuates that possession. The mortgagee is to enter as mortgagee under the covenant for possession; the mortgage deed and even if the rajinama decree should be taken to be the creation of a fresh right and the extinguishing of the one created by the mortgage propria vigore it creates the relation of mortgagor and mortgagee with all the incidents of a mortgage with possession. In fact the position which both the parties took up till we come to the suit was that the relationship was only that of mortgagor and mortgagee.

16. On 7th December 1901, defendant 1's tarwad, who were already the mortgagees under the first deed of mortgage dated 8th December 1892 and the rajinama decree dated 2nd January 1899, took a second mortgage of the properties from defendants 2 and 3's tarwad for Rs. 1,675 and O.S. No. 44 of 1912 was filed by the mortgagee to enforce his right under the mortgage. The plaint in that suit is filed as Ex. K and in para. 2 of the plaint it is stated that the second mortgage was taken on the responsibility of the equity of redemption of the immovable properties described in the plaint schedule which were held by the plaintiff's tarwad on a usufructuary mortgage for a sum of Rs. 31,000. It appears from the plaint that in the meantime the equity of redemption was purchased by one Subraya Kamathi who was defendant 3 in that suit. Para. 7 of the plaint runs as follows:

Defendant 3 had lately purchased the equity of redemption of some of the hypothecated properties in execution of a money decree obtained by him against defendant 1 subject to the suit hypothecation bond and the usufructuary mortgage referred to above and he is therefore made a party.

17. It is prayed that in default of payment of the sum of Rs. 3,931-9-6 which is claimed as being due on the second mortgage sued on the property may be sold and the sale proceeds applied:

in payment of what may be found due to plaintiff subject to or free from the previous usufructuary mortgage in favour of the plaintiff's tarwad as the Court deemed fit.

18. The judgment in that suit is filed as Ex. L. It appears from the judgment that all the parties admitted that the prior usufructuary mortgage was subsisting (see para. 8 of the judgment). This second mortgage seems to have been taken in the name of defendant 2 in that suit. The question was raised as to whether it was benami for the plaintiff and whether the plaintiff could sue and the Judge held that it was taken benami. In para. 15 of the judgment the Judge passes a decree and directs that the decree amount should be paid by the sale of the suit mortgage property:

subject to the previous usufructuary mortgage in favour of the plaintiff's tarwad if defendant 1 and his tarwad do not pay the amount in six months from this date.

19. The decree Ex. M follows these directions and Clause 2 of the decree runs as follows:

that if such payment is not made on or before 22nd May 1913, the undermentioned plaint properties be sold subject to the previous usufructuary mortgage in favour of plaintiff's tarwad and that the proceeds of the sale (after defraying there out the expenses of the sale) be paid into Court and applied in payment of what is declared due to the plaintiff's tarwad as aforesaid together with subsequent interest and subsequent costs and that the balance, if any, be paid to defendant 1.

20. It is clear therefore from these proceedings that in 1912 i.e. about 20 years after Ex. A the deed of mortgage and over 12 years after the rajinama decree the mortgagee treated the first mortgage as subsisting and got a decree on the second mortgage on that basis.

21. It appears that during the pendency of this suit the equity of redemption was sold and was purchased by defendant 3 in that suit. Ex. D is the sale certificate issued to Subraya Kamathi and it shows that the property was sold in execution of the decree in suit No. 184 of 1900 which was filed by Subraya. Kamathi against the mortgagors on a personal debt. The sale certificate shows that on 20th December 1909 the property was purchased for Rs. 210. The sale was subject to the two previous mortgages and this accounts for the very small sum of Rs. 210 paid for this very valuable property. Subraya Kamathi assigned this sale certificate to the plaintiff's tarwad on 22nd April 1913, by Ex. F. This sale is for Rs. 1,250 and specifically states that it is subject to all equities, which means, we take it that it is subject to all the rights created by the previous mortgages.

22. There seems to have been litigation as regards the purchase by Subraya Kamathi as appears from Ex. G, judgment dated 22nd November 1915 in O.S. No. 330 of 1914 on the file of the District Munsif's Court of Mangalore, where the District Munsif upheld the purchase by Subraya Kamathi and the assignment by Subraya Kamathi. It also appears that this judgment was confirmed in appeal by the Subordinate Judge in Appeal No. 5 of 1917 and by the High Court in S.A. No. 1,423 of 1917.

23. So far as the suit on the second mortgage is concerned, the mortgagors rather than have the property sold paid the amount due under that decree. It appears from Ex. Q that on 17th December 1918 the person representing judgment-debtor paid into Court Rs. 6,115-12-0 due under that decree. In prayer 2 of the execution application it is prayed that the amount may be paid to respondent 1 (plaintiff) in full satisfaction of the decree in O.S. No. 44 of 1912. In the remarks column this is what is stated:

That out of Rs. 31,000 made payable in raji decree in O.S. No. 22 of 1898 some amounts have been paid to the Kodath tarward and the petitioner reserves his right of tendering the balance amount after deducting the above-named payments and the damages caused by the Kodath tarwad by a separate petition.

24. Upon this notice was ordered and ultimately we find that on 12th March 1919 the following order was passed:

By consent it is ordered that the amount in deposit shall be paid to respondent 1 (plaintiff) in full satisfaction.

25. Ex. S which is dated 27th August 1913 is a notice sent on behalf of Kelu Nair (plaintiff) to Ambu Nair who is defendant 1 in the suit. It states that certain trees on the mortgage properties were cut down and that the mortgagee who was in possession of the properties under the mortgage deed had no right to cut down the trees or authorize the cutting down of the trees. The letter winds up as follows:

You shall therefore immediately make enquiry about this unlawful act which is being done through your want of vigilance and take the necessary steps in the matter, and inform me or Kelu Nair in writing of it. If you will not do so, you are hereby informed that since this act is causing great damage, the lawful value of the timber which has been cut till now and which may be cut hereafter will be appropriated from the kanom amount due to you under the above compromise decree.

26. This letter is clearly written on the footing that the relationship of mortgagor and mortgagee subsists as also the right of redemption and that if any act of waste is committed or is allowed to be committed, the amount of damages would be deducted from the mortgage money due on redemption. To this, the reply Ex. T dated 8th September 1913 is sent by the mortgagee. It runs as follows:

I am in receipt of your registered letter dated 27th August 1913 on behalf of Echikana Charakere Kelu Nair. As mentioned therein I am not award of the fact that the properties mortgaged to my tarwad were sold in auction and that they were assigned to the said Kelu Nair. I had not empowered anybody to cut trees from the properties mortgaged to me. The trees were not cut even. I did not cause any loss even.

27. There is no repudiation here of the allegation that the relationship of mortgagor and mortgagee subsists. It is not alleged that the mortgagor has lost his rights to redeem. These notices were in 1913. It is therefore clear that from 1892 till 1917 there was no question raised that the possession of the mortgagee under the mortgage dated 8th December 1892 and the compromise dated 2nd January 1899 was possession under a subsisting mortgage for Rs. 31,000 which was liable to be redeemed.

28. The plaintiff in this suit acting under the power conferred by Clause (2) of the rajinama decree Ex. C deposited Rs. 31,000 in Court and filed an application for execution praying for redelivery of possession of the properties. This application was opposed by the mortgagee on the ground that the execution of the decree was barred by limitation. There were other grounds of objections which it is not necessary to consider now. It was contended for the plaintiff who was petitioner 1 in the execution application that time began to run only in default of the respondents to deliver possession on the petitioner's depositing the mortgage amount on the vishu day of any one year they chose within the period of 60 years fixed for redemption under the Limitation Act and that his cause of action only arises when the mortgagee refused to deliver possession on the money being paid. The Subordinate Judge, however, upheld the contention that the application was barred by limitation. As regards the maintainability of a fresh suit to redeem he did not decide the question. All that he said in para. 8 of the judgment was:

whether a fresh suit for redemption by the petitioners will be barred by the aforesaid decree is a question which we need not go into at present.

29. It appears also from the order dated 10th November 1920 that both the parties wanted the question of limitation to be taken up as a preliminary question. The order is filed as Ex. I. Against this order an appeal was filed in the High Court and on 20th December 1921 the appeal was dismissed and the order of the Subordinate Judge was confirmed. The judgment of the High Court is filed as Ex. 2 in the case. The learned Judges held that Article 181 is the article applicable to a case like the present, that the starting point of limitation was the date when the right to apply for execution accrued and that the right to apply for execution accrued from the date of the decree and they preferred to follow the decision of the Bombay High Court in Maruti v. Krishna [1899] 23 Bom. 592, to the decision of the Allahabad High Court in Cheddi v. Lalu [1902] 24 All. 300. The learned Judge observed:

On our construction of this decree it is not a case of option given to the mortgagors to make payment on successively recurring debts and a number of other cases which have been quoted by the learned vakil for the appellants need not be dealt with by us for that reason.

30. The learned Judges did not express any opinion as to whether a suit for redemption would be maintainable. This judgment has become final and therefore it has to be taken that the remedy to redeem by way of executing the decree has become barred. The effect of this judgment is that the compromise which is embodied in the rajinama decree Ex. C virtually cut down the period of redemption from 60 years to 3 years if it should be held that executing the decree is the only method by which the mortgagor or his representatives could redeem.

31. We do not think the rajinama decree in O.S. No. 22 of 1898 renders the present suit res judicata. There was no adjudication in that suit of any of the questions raised here. We need only refer to the decision of their Lordships of the Privy Council in Maina Bibi v. Vakil Ahmed . In that case the heirs of deceased Mohammad filed a suit and obtained a decree that on payment of a certain sum of money they should get possession from the widow who claimed to be in possession in lieu of her decree debt and that if the money was not paid in six months the suit should be dismissed. They did not pay as directed and several years afterwards filed a suit for possession conditionally and alternatively on payment of the sum.

32. The main contention of the appellant before us is that Section 47, Civil P.C., which corresponds to Section 244 of the Act of 1882 and to Section 11 of the Act of 1861 bars a separate suit in all cases where the party can execute the decree. Section 47 runs as follows:

All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.

33. The contention is that the clause in para. 2 of the rajinama decree which states that if the mortgagors pay the kanom amount of Rs. 31,000 mentioned in para. 1 of the decree on the vishu sankaramana vaide of any one year in a lump sum, he the mortgagee should relinquish his arwar right and deliver the said property back to the mortgagors and that if he fails to deliver the same in that manner they should take possession of it by taking out execution, limits the right to the execution and that if that right is extinguished the right of redemption also is extinguished as a separate suit would not lie. As we pointed out before, so far as the parties to the rajinama decree were concerned, they neither at the time of the rajinama decree nor for several years thereafter thought that the right of redemption would be barred in 3 years. Till the execution application was put in 1920, in the various proceedings the parties acted on the footing that the mortgage was still subsisting and could be redeemed. It cannot be said that the parties when they entered into the rajinama agreed that there should be this clog on the equity of redemption, that the equity should be barred in 3 years when the law allowed 60 years to redeem. Even assuming that they did, it is clear that if such a clause was put in a mortgage document, it would be void as a clog on the equity of redemption.

34. Section 60, T.P. Act, enacts that at any time after the principal money has become payable, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage money, to require the mortgagee (a) to deliver the mortgage deed, if any, to the mortgagor, (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor and (c) at the cost of the mortgagor either to retransfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished, provided that the right conferred by this section has not been extinguished by act of the parties or by order of a Court.

35. It should be observed here that unlike other sections dealing with mortgages, Section 60 does not permit parties to contract themselves out of its provisions. In Muhammad Sher Khan v. Raja Seth Swami Dayal A.I.R. 1922 P.C. 17, the question was 'whether a clause which suspended the right to redeem was valid. Their Lordships of the Privy Council after referring to Section 60 observed the section is unqualified in its terms and contains no saving provision, as other sections do, in favour of contracts to the contrary. Their Lordships, therefore, see no sufficient reason for withholding from the words of the section their full force and effect.'

36. The proviso as regards the right being extinguished by act of the parties has been in several cases held to mean an act done after the mortgage has been entered into, such as release of the right to redeem or of sale. In Fairclough v. Swan Brewery Co. Ltd. [1912] A.C. 565, Lord Macnaghten observed:

It is now firmly established by the House of Lords that the old rule still prevails and that equity will not permit any device or contrivance being part of the mortgage transaction or contemporaneous with it to prevent or impede redemption.

37. It has been argued that the strict rule of the Courts of equity has been relaxed and reference has been made to G and C Kreglinger v. New Patagonia Meat Gold Storage Co. Ltd. [1914] A.C. 25. We do not think the rule that you cannot clog the equity of redemption at the time of the mortgage has been affected by this decision. Lord Parker at p. 60 observes:

if once you come to the conclusion that the parties intended that the property should be reconveyed on payment of the moneys secured, any provision which would prevent this must be rejected as inconsistent with and repugnant to the true intention. But, on the other hand, if you once come to the conclusion that this was not the real intention of the parties, then the transaction is not one of mortgage at all.

38. The conclusion which the learned Lord came to has been thus summarised by him:

My Lords, after the most careful consideration of the authorities I think it is open to this House to hold, and I invite your Lordships to hold, that there is now no rule in equity which precludes a mortgagee, whether 'the mortgage be made upon the occasion of a loan or otherwise, from stipulating for any collateral advantage, provided such collateral advantage is not either (1) unfair and unconscionable, or (2) in the nature of a penalty clogging the equity of redemption, or (3) inconsistent with or repugnant to the contractual and equitable right to redeem.

39. There can be little doubt that the intention of the parties in the present suit when they entered into the compromise embodied in Ex. C was clearly to keep the mortgage alive, that possession was taken under the mortgage and there is nothing to suggest that the parties ever intended that the equity of redemption should be lost if the mortgagor did not repay the mortgage money in 3 years, for, this is the effect of clause put in as to recovery in execution of possession. There can be little doubt that this clause if interpreted as extinguishing, the right to redeem if execution is not taken out within the time limited by law, that is 8 years, works a great hardship on the mortgagor. It is stated by the counsel for the respondent that the property is now worth more than a lakh of rupees, counsel for the appellant says that he is not in a position to give the value of the property. But having regard to the extent and nature of the property as disclosed in the schedules to the plaint, the income of the property which even according to the deed of compromise was considerable and the fact that the mortgagees were willing to lend money on a second mortgage, there can be little doubt that the value of the property at the date of the compromise and at the date when the mortgagor applied for execution by depositing Rs. 31,000 into Court was considerably in excess of the mortgage money.

40. Even if the decision in G and C Kreglinger v. New Patagonia Meat and Gold Storage Co. Ltd. [1914] A.C. 25, establishes a new principle, we think the proviso to Section 60, which refers to the extinguishment of the right by act of the parties must, having regard to the authorities above cited, be an act subsequent to the transaction and it is difficult to see how, when the law has been codified by Section 60 which as interpreted by their Lordships of the Privy Council prevents any party from contracting himself out of it, it is possible to relax the rule on any of the considerations which influenced the Court in the case reported in Kreglinger v. New Patagonia Meat and Cold Storage Co. Ltd. [1914] A.C. 25. Altered conditions may be a good ground for relaxing a rule of equity but can hardly be a ground for not applying the provisions of a statutory enactment.

41. It has been argued that even if the clause in the rajinama as to the execution was invalid and unenforceable, the fact that the compromise has been made a decree of Court validates the transaction. It should be noted in the present case that all that the Court did was to embody in the decree the terms of the compromise. It is not suggested that there was any adjudication or any enquiry by the Court before the rajinama decree was passed. All that the parties consented to as the agreement as embodied in the rajinama decree. We do not think in these circumstances the fact than an illegal term in an agreement is by consent of parties embodied in a consent decree could make that term enforceable or could be a defence in a subsequent suit to redeem. We may in this connexion refer to the decision of their Lordships of the Privy Council in Great North West Central Railway v. Charlebois [1899] A.C. 114. In that case a term which is ultra vires of a company was embodied in a contract and also in a consent decree of Court. It was contended that the fact that the term is embodied in the decree prevented the parties from disputing it. Lord Hobhouse in delivering the judgment of their Lordships of the Privy Council observed:

But the difficulty is to reconcile an opinion that the contract is ultra vires with an opinion that a judgment obtained as this was, is a binding judgment. The authorities referred to by the Supreme Court do not relate to contracts ultra vires. It is quite clear that a company cannot do what is beyond its legal powers by simply going into Court and consenting to a decree which orders that the thing shall be done.

42. After pointing out that the legality of the act was not one of the points substantially in dispute and that if that was the subject of a fair compromise in Court, it may make a difference. His Lordship said that a judgment obtained upon such a contract which is ultra vires cannot be of more validity than the invalid contract on which it was founded.

43. So far as the decrees founded on contracts are concerned, it has always been held that the Court can give relief in a separate suit or in execution proceedings where the terms of the consent decree are against the provisions of any statute. In Nagappa v. Venkata Rao [1901] 24 Mad. 265, a suit was filed by the landlord for arrears of rent and possession. The parties arrived at a compromise and the decree contained a stipulation that if default should be made in payment of rent within the time fixed for payment each year, the lease should be forfeited. Default was made and the plaintiff applied in execution for possession and arrears of rent. It was held that inasmuch as the decree passed by the Court was a mere adoption of the contract which existed between the parties to it, it was competent to the Court to relieve against the forfeiture under the general provisions of the law. In Lakshmanaswami Naidu v. Rangamma [l903] 26 Mad. 81, it was held that any terms of a contract which are opposed to public policy are invalid and would not be enforced by the Courts and that if such terms are embodied in a compromise decree those terms would not be enforced. In this case the compromise decree provided for the sale of an office attached to a temple involving service of a personal nature and entitling the holder to receive emoluments, In Krishnabai v. Hari Govind [1907 31 Bom. 15, there was a consent decree passed which created the relationship of landlord and tenant and which contained a clause for forfeiture if the rent was not paid. There was nothing in the decree which provided any relief against the terms embodied in the decree. The plaintiff filed a suit for possession on the ground that the right to possession which was conferred by the consent decree accrued owing to forfeiture. It was held that as the consent decree created the relationship of landlord and tenant, the Court could relieve against forfeiture. Sir Lawrence Jenkins, C.J., after stating that as it was an incident of those relations that the right of forfeiture was subject to relief, that incident must still apply when those relations are established by a decree passed in accordance with the agreement, observed:

It was laid down in Wentworth v. Bullen [1829] 9 B. & C. 850, and has since been repeatedly affirmed that the contract of the parties is not the less a contract, and subject to the incidents of a contract, because there is super added a command of a Judge and this in my opinion lends a sanction to the conclusion. I have expressed.

44. Beaman, J. observed:

By private agreement converted into a decree, parties cannot empower themselves to do that which they could not have done by private agreement alone and referred to Great North West Railway v. Charlebois [1899] A.C. 114.

45. Applying these principles to the facts of the present case the position is this. The compromise of the suit on the mortgage Ex. A, which is now the foundation of liability, did not put an end to the relationship of mortgagor and mortgagee but on the contrary affirmed it. The decree perpetuated the relationship of mortgagor and mortgagee and did not dissolve that relationship. It enforced the right of the mortgagor under the mortgage to obtain possession, and provided for the right of the mortgagor getting back possession on payment of Rs. 31,000. The ordinary incidents of that relationship are that even though a term is fixed for redemption by the parties the party is allowed to redeem within the period of 60 years provided by the Limitation Act and that any provision in the agreement which in effect limits the right to redeem by a clause that the right is to be exercised by execution (which necessarily reduces the period to 3 years) is as invalid as if there was a clause saying that if the property is not redeemed in three years the property should be lost. This clause was embodied in the decree by consent of all parties. It is therefore a case where the parties have done what Section 60, T.P. Act, prohibits, In a suit to redeem it seems to us to be no defence to state that the sole remedy is the remedy by execution, which remedy the parties had no right to insert as being a clog on the equity of redemption. In this view, Section 47, of this Code would not debar the plaintiff from filing a suit to redeem.

46. We think that on a proper construction of the compromise decree the clause that the mortgagor should take possession of the property by executing the decree is not the sole right which the mortgagor has. Unlike a decree for redemption under the Transfer of Property Act the decree does not say that if money is not paid as stipulated the right to redeem is lost. What the parties contemplated was that they should be entitled to the benefit of the summary way of getting possession. The fact that the plaintiff does not choose to exercise that right would not deprive him of the larger remedy he has of getting possession by suit. If he had applied within three years by execution to redeem the property, he would have had to pay only a few rupees as stamp duty under the Court-fees Act and he would have got possession on payment into Court of Rs. 31,000 If he wants to have it done by a suit, a very heavy stamp duty of about Rs. 1492 would have to be paid and as a matter of fact such a stamp duty was paid in the present suit to redeem. It also appears to us that the existence of that clause would not prevent redemption as the case falls within the decision of their Lordships of the Privy Council in Sri Rajah Papamma Rao v. Sri Vira Pratapa H.V. Ramachandra Razu [1896] 19 Mad. 249, where the facts were shortly these. The plaintiffs sued to redeem a mortgage on the ground that it was discharged by the rents and profits appropriated by the mortgagee. The mortgagor undertook in the mortgage deed to repay a sum of Rs. 2,011 with interest by four annual instalments, mortgaging as security a village belonging to them. The mortgagee sued the mortgagors upon this bond and prayed for a decree directing the defendants to pay the amounts then due with interest by means of the mortgage property. The decree of the District Judge was:

In accordance with the custom prevailing in the Courts in this presidency three months' time will be allowed to the defendants within which to pay up the whole sum now decreed, principal and interest and costs, failing which the plaintiff shall be put in possession of the immovable and moveable property specified in the bond sued upon, and in the plaint and schedule, as provided in the terms of the bond.

47. We may state in passing that in this case the decree was a consent decree which directed that if the mortgage was not redeemed in 3 years, the mortgagee should take possession of the properties. Under this decree, the mortgagee took out execution and got possession as the mortgagee in the present case acting under Clause 2 of the rajinama decree got possession in execution. Then the plaintiffs mortgagors filed the suit to redeem, alleging that if an account was taken it will be found that the whole mortgage has been discharged by the usufruct. The defence was that by virtue of the terms of the decree the property had become the absolute property of the mortgagee and that it was not competent to the parties to go behind the decree. The Subordinate Judge dismissed the suit on the ground that the mortgage was foreclosed if the money was not paid in 3 years. On appeal this judgment was reversed by the High Court. Their Lordships of the Privy Council affirmed the decision of the High Court. Lord Hobhouse in delivering the judgment of their Lordships of the Privy Council after referring to the decree of the District Judge and the fact that the decree stands because no appeal was tiled against that decree observed:

The decree therefore stands and is binding on the parties; and the mortgagee took possession under it. He has since sold the property but that does not affect the rights of the mortgagor. The question is in what character was the possession taken. If in the character of a mortgagee, the mortgagor had a right to redeem, which was not barred by the time the suit began.

48. His Lordship after dealing with the contentions of Mr. Mayne further observed:

It is sufficient that the mortgagee, not being entitled to foreclosure, and not asking for it, got a decree which did not purport to work foreclosure. It purported to give possession, 'as provided in the terms of the bond.' That was impossible for there were no such terms; but it purported to do that, and did not purport to put an end to the bond and to the relations of mortgagor and mortgagee altogether. It could, though subject to correction on appeal, give possession, and did so. The mortgagee thereupon became mortgagee in possession; and as such he must submit to be redeemed.

49. It seems to us difficult to distinguish the facts of the present case from the facts of the case in the Papamma Rao v. Vira Pratapa [1896] 19 Mad. 249 referred to above. The decree with which their Lordships were dealing was an executable decree and for the purpose of Section 47 the addition of a clause allowing parties to execute makes no difference if the decree is in fact executable. The test applied by their Lordships is 'what was the character of the possession taken under the decree' and if the character was as mortgagor and mortgagee, their Lordships hold that the right to redeem followed.

50. Reference has been made by the appellant's advocate to Hari Ravji v. Shapurji Hormasji [1886] To Bom. 461, and it was contended that the decision in that case lays down a contrary rule. We do not think the facts of that case are similar to the facts of the case with which we are dealing now. In that case a suit was filed by the mortgagees to recover their mortgage money by sale and a de(SIC) was passed in accordance with the award of arbitrators to the effect that the defendants were to pay in all Rs. 2,369 to the plaintiffs on a date which would be fixed and should redeem the land which till payment was to remain in the possession of the plaintiffs. This state of things continued from September 1825 and in 1877 a suit was filed to redeem. The Subordinate Judge held that the mortgage had entirely merged in the decree and that execution was barred. This judgment was confined by the High Court. Their Lordships of the Privy Council held that as the execution of the decree was barred, no fresh suit for redemption would lie on the rights created by the decree. Their Lordships held that on the frame of the plaint the plaintiff could not fall back on a right to redeem the original mortgage as he in the plaint did not seek to redeem the mortgage of 1806 which on the face of it would be barred but for some acknowledgment and no such acknowledgment was alleged. Their Lordships left open the question whether if a proper suit was filed on the original mortgage and an acknowledgment was proved so as to get over the bar of limitation, that suit would be maintainable. In the case before us the suit to redeem is not barred as it is within 60 years of the date of the mortgage. It is clear from the facts of the case in Hari Ravji v. Shapurji. Hormasji [1886] To Bom. 461 that the suit was not a suit to enforce the term of the mortgage as to possession and keep the rights of the parties subsisting but was on the contrary a suit by the mortgagee to get back his money. In cases where the mortgagee sues to get back his money of course the decree fixes the period for payment and provides either for sale or foreclosure. And the effect of the decree is to put an end to the relationship of mortgagor and mortgagee after the period mentioned in the decree and to substitute new rights created by the decree. This is clearly brought out by the provisions of the Transfer of Property Act and Order 34, Civil P.C. which relate to mortgage decrees.

51. This case has been considered by the Bombay High Court in Abdul Rajack v. Vaman Ganesh : AIR1921Bom284 . That was a suit to redeem a mortgage of 1874. There was a previous redemption decree of 1881 the terms of which were that the plaintiff should pay the defendant Rs. 400 with interest by annual instalments and that if the plaintiff failed to pay any instalment, the defendant should take possession of the land mortgaged and receive the produce thereof in lieu of interest and on the plaintiff paying the principal amount at the end of any fasli year, the land belonging to the plaintiff should be returned to him. It was contended that the suit to redeem was barred by reason of the previous decree and reliance was placed on Hari Ravji v. Shapurji Hormasji [1886] Bom. 461. Sir Norman Macleod, C.J. observed:

This case belongs to that numerous class of cases in which the question arises whether the mortgagor is in effect bringing a suit to execute previous redemption decree, or whether he is seeking to exercise the right to redeem, as a right which was reserved to him by the previous decree. On the authority of Hari Ravji Chiplenkar v. Shapurji Hormasji Shet [1886] 2 Bom. 461, if the suit must be treated as a suit claiming a right to execute the previous decree, then undoubtedly it must be dismissed. But if it cornea within the Full Bench decision of this Court in Tani Bagavan v. Haribin Bhavani Dubai [1892] 16 Bom. 659, than the plaintiff is entitled to succeed. The decision must depend entirely on the nature of the decree in the previous suit; and the difficulty in reconciling the various decisions lies in the fact that the terms of the previous decree will generally vary, and further the decision of the question may depend upon whether the previous suit had been brought by the mortgagor or the mortgagee.

52. After referring to Tani Bagavan v. Haribin Bhavani Dubai [1892] 16 Bom. 659, the learned Chief Justice observes:

It seems to me that in the decree in suit No 480 of 1881 the right to redeem was reserved and that the plaintiff is now entitled to sue for redemption.

53. Applying this test to the present case it seems to us that the compromise decree far from putting an end to the right to redeem was passed on the basis that the mortgage right should subsist. We are of opinion that in any view of the case the present suit is not barred by Section 47 as contended for by the appellant.

54. In the view we take, it is unnecessary to consider the contentions raised by the learned Advocate General for the respondents as to the defendants being estopped from contending that the mortgage is not redeemable by reason of the various proceedings we have already referred to or the contention that the decree in the suit on the second mortgage obtained by the mortgagees on the basis that the first mortgage was subsisting operates as res judicata or as an estoppel, or the contention that the mortgagees having admitted for over the statutory period of 12 years, their possession as being possession under the mortgage a fresh title to redeem arises irrespective of the compromise decree. The appeal fails and is dismissed with costs.


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