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P. Subbiah Iyer and anr. Vs. Pichiah Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1970)1MLJ132
AppellantP. Subbiah Iyer and anr.
RespondentPichiah Pillai and ors.
Cases ReferredGopilal v. Abdul Hamid
Excerpt:
.....be invoked by defendants 2 and 3 in that case, as they failed to show that what they acquired was absolute property or what is known in the english law as fee-simple title and not merely the interests of the first defendant mortgagee. it should be noted that the defendant in that case had failed to produce and prove the sale deed in her favour and it has, therefore, been held that the defendant cannot invoke the shorter period of limitation under article 134 of the limitation act as against article 148. the supreme court did not go into the further contention of the plaintiff in that suit that it is for the defendant to plead and prove the facts, including the date of knowledge, which would attract the bar of limitation under article 134 schedule i of the limitation act of 1908. in..........both the courts below found that the clause in the othi deed, exhibit b-1, giving the mortgagee absolute title to the hypotheca on the : expiry of the period of redemption of seven years is a clog on the equity of redemption. but they, however, found that the suit was barred by limitation under article 134 of the limitation act of 1908 and on account of adverse possession. both the courts below found that the first defendant had effected improvements to the value of rs. 4,500 and observed that if the suit for redemption had been decreed, the plaintiffs would have to pay the said amount. they also found that the plaintiffs are not entitled to relief under madras act iv of 1938.3. there can be no doubt in this case that the clause in exhibit b-1 that the mortgagee shall enjoy the.....
Judgment:

R. Sadasivam, J.

1. Appellants filed O.S. No. 81 of 1960, on the file of the Sub-Court, Tirunelveli, to redeem the othi, Exhibit B-1 dated 1st March, 1919 executed by Pichu Iyer in favour of Sitarama Iyer for Rs. 7,500. Pichu Iyer died in January, 1929. The first plaintiff Subbiah Iyer is the last son of Pichu Iyer. Defendants 4 and 5 are the sons of Sangu Iyer and Krishna Iyer respectively, the second and third sons of the said Pichu Iyer. Pichandi Iyer, the eldest son of Pichu, Iyer, predeceased his father leaving two sons, Sivaramakruhna Iyer and the second plaintiff Sundaresa Iyer. Sivaramakrishna Iyer died leaving his widow Akilandammal, the sixth defendant in the suit. The plaintiffs and defendants 4 to 6 claim that they are entitled to redeem the suit mortgage as the successors-in-interest of the mortgagor Pichu Iyer. Defendants 1 to 3 claim to be absolute owners of the hypotheca by virtue of the clause in the othi deed Exhibit-B-1 under which the mortgagee Sitarama Iyer became absolutely entitled to the hypotheca after the expiry of a period of seven years and also by virtue of an oral sale of the hypotheca by Pichu Iyer to Sitarama Iyer and the successive alienations by which they ultimately got title. The contesting defendants 1 to 3 claimed to have become owners of the hypotheca by limitation and adverse possession and alternatively claimed a turn of Rs. 4,500 spent by them for effecting improvements to the hypotheca. The appellants-plaintiffs claimed relief under Madras Act IV of 1938.

2. Both the Courts below found that the clause in the othi deed, Exhibit B-1, giving the mortgagee absolute title to the hypotheca on the : expiry of the period of redemption of seven years is a clog on the equity of redemption. But they, however, found that the suit was barred by limitation under Article 134 of the Limitation Act of 1908 and on account of adverse possession. Both the Courts below found that the first defendant had effected improvements to the value of Rs. 4,500 and observed that if the suit for redemption had been decreed, the plaintiffs would have to pay the said amount. They also found that the plaintiffs are not entitled to relief under Madras Act IV of 1938.

3. There can be no doubt in this case that the clause in Exhibit B-1 that the mortgagee shall enjoy the hypotheca as absolute owner with full power of alienation if it is not redeemed within a period of seven years is a clog on the equity of redemption and in fact, the learned advocate for the contesting respondents did not dispute the same.

4. The first question for consideration in this appeal is whether there was an oral sale of the hypotheca by Pichu Iyer in favour of Sitarama Iyer on 1st March, 1926. If there is pleading and evidence about this oral sale, there would be no justification for interfering with the concurrent finding of the Courts below that Sitarama Iyer became absolutely entitled to the hypotheca. But there is no plea in the written statement of the first defendant that there was an oral sale by Pichu Iyer in favour of Sitarama Iyer. In paragraph 4 of the written statement of the first defendant it is stated that Sitarama Iyer became absolute owner of the properties since 1st March, 1926 as per the stipulation in the deed. The first defendant has submitted in that paragraph that Pichu Iyer agreed to and accepted the absolute ownership of Sitarama Iyer and had the patta transferred to his name after 1st March, 1926 and hence the right of redemption if any, has been extinguished by act of parties and the possession of Sitarama Iyer since that date was converted into possession as absolute owner.

('After discussing the evidence His Lordship proceeded : )

5. There is practically no evidence to support the oral sale which has not even been pleaded in the written statement, or the arrangement mentioned in paragraph 4 of the written statement of the first defendant. In fact, the Courts below have not dealt with the arrangement pleaded in paragraph 4 of the written statement independently, but only as evidence of the oral sale put forward during the trial of the case. Even the arrangement pleaded in paragraph 4 of the written statement of the first defendant is really based on the invalid stipulation in the deed Exhibit B-1, giving absolute title to the mortgagee after the expiry of the period of redemption. The learned advocate for the contesting respondents relied on the arrangement pleaded in paragraph 4 of the written statement of the first defendant only in support of his contention that adverse possession commenced even from 1st March, 1926. It is true that if there was an arrangement between Pichu Iyer and Sitarama Iyer as pleaded in paragraph 4 of the written statement of the first defendant, the subsequent possession of Sitarama Iyer and his successors-in-interest would be advene to Pitchu Iyer and his successor-in-interest. The decision in Kandaswami v. Ponnuswami : AIR1929Mad16 , would clearly support such a contention. In Padma Vitoba v. Md. Multani (1963) 2 S.C.J. 172 : (1963) 3 S.C.R. 289 : A.I.R. 1963 S.C. 70, it was held that if the mortgagor and mortgagee subsequently entered into a transaction under which the mortgagee is to hold the properties thereafter not as a mortgagor, but as owner, that would be sufficient to start adverse possession against the mortgager if the transaction is for any reason inoperative under the law. But in this case even the finding of the lower appellate Court is that the pleadings and the evidence do not clearly bear out the oral agreement of sale between Pichu Iyer and Sitarama Iyer in or about 1926. In fact, the learned District Judge has relied only on the conduct of the parties in dealing with the hypotheca subsequent to 1926 as showing that Sitarama Iyer and his successors-in-interest enjoyed the suit properties with patta in their names as owners and not as mortgagees. The transfer of patta was not in pursuance of the oral sale but only by virtue of the terms of Exhibit B-1. We have shown how the conduct of Sitarama Iyer and his successors-in-interest in executing absolute conveyance is consistent with the invalid stipulation in Exhibit B-1 and cannot be relied on as unequivocally showing that the said conduct was a result of the oral sale put forward by the contesting defendants during the trial, or the arrangement mentioned in paragraph 4 of the written statement of the first defendant. Thus, we are unable to accept the case of the contesting defendants as regard the oral sale for which there is no plea, or the oral arrangement for which there is really no evidence.

6. The next question for consideration in this appeal is whether the suit claim is barred by limitation. On the pleadings, there can be no doubt that the claim falls under Article 134 of the Limitation Act 1908. The plaintiffs came to know from the reply notice sent by defendants 1 to 3 that they were claiming absolute title to the properties covered by Exhibit B-1. In Vythilinga Pillai v. Kuthiravattah Nair : (1906)16MLJ358 , it has been held that Article 134, Schedule I of the Limitation Act applies only to cases where the vendor purports to sell the property as his absolute property and the vendee purchases it as such. The plaintiff in that suit sued for redemption of certain lands. It was held that Article 134 of the Limitation Act could not be invoked by defendants 2 and 3 in that case, as they failed to show that what they acquired was absolute property or what is known in the English law as fee-simple title and not merely the interests of the first defendant mortgagee. In Nani Bai v. Gita Bai : [1959]1SCR479 , it has been held that in order to attract the operation of Article 134 of the Limitation Act of 1908 the defendant has got affirmatively to prove that the mortgagee or his successor-in-interest has transferred a larger interest than justified by the mortgage and if there is no such proof, the shorter period under Article 134 is not available to the defendant in a suit for possession after redemption. It should be noted that the defendant in that case had failed to produce and prove the sale deed in her favour and it has, therefore, been held that the defendant cannot invoke the shorter period of limitation under Article 134 of the Limitation Act as against Article 148. The Supreme Court did not go into the further contention of the plaintiff in that suit that it is for the defendant to plead and prove the facts, including the date of knowledge, which would attract the bar of limitation under Article 134 Schedule I of the Limitation Act of 1908. In Venkatasubbiah v. Jamma Mosque : AIR1941Mad666 , it has been held that where the vendor not in possession of a full title, such as a mortgagee under a mortgage by conditional sale, purports to convey an absolute title, the transaction constitutes a transfer within the meaning of Article 134 of the Limitation Act. Having regard to the averments in the plaint in this case, there can be no doubt that the case clearly falls under Article 134, Schedule I of the Limitation Act of 1908.

7. The further question to be considered in this case is when the absolute transfer in favour of the contesting defendants became known to the plaintiffs, as the period of limitation begins to run from such time. In paragraph 9 of the plaint, it is stated that the first plaintiff went to Aladiyoor village on 1st October 1948 and learnt about the possession of defendants 1 and 2 and that it was only on 30th October, 1948, when the plaintiff's lawyer received the reply notice dated 29th October, 1948, the plaintiffs and defendants 4 and 5 came to know of the claim of defendants 1 and 2 for the so-called absolute title to the suit properties. The relevant plea of the first defendant in his written statement, which has been adopted by defendants 2 and 3, is contained in paragraph 9. It is stated in that paragraph that it is false to state that the first plaintiff came to know of the possession of the first defendant only on 1st October, 1948 when he 'happened to go to Aladiyoor village. It is pleaded that the plaintiffs are fully aware of the possession of the first defendant and his predecessors-in-title as well as others from the dates of the respective transfers. In paragraph 14 of the plaint it is stated the cause of action arose on 30th April, 1948 when the plaintiffs received the reply notice containing the claim of defendants 1 and 2 to an absolute title to the suit properties. There is only a general denial of this plea in the written statement of the first defendant. There is no plea that the cause of action arose earlier on the date of the alleged oral sale or arrangement, or subsequently at any time beyond 12 years prior to suit.

8. We have pointed out that on the averments contained in the plaint the case is governed by Article 134 of Schedule I of the Limitation Act of 1908. The learned Advocate for contesting respondents relied on the decisions in Raghunatida v. Mahadeo , and in Khadi Khan v. Murad Khan A.I.R. 1942 Pesh. 39, in support of his contention that in such cases as the present one the burden is on the plaintiff to show that the suit is within time by showing that he came to know of the transfer in favour of the contesting first defendant within 12 years of the date of suit. The decision is based on two principles, namely, that it is the duty of the plaintiff to prove that his case is within limitation and that a fact which is within the special knowledge of a person has to be proved by that person. In construing similar provisions in Article 48 of Schedule I of the Limitation Act, of 1908, a Bench of the Calcutta High Court in Kalyani Prasad Singh v. Borrea Coal Co. A.I.R. 1946 Cal. 133 and the Supreme Court in Manji & Co. v. Jatashankar Dossa : [1962]1SCR492 , have adopted the same principles and found that the burden of proof is on the plaintiff to prove that he had knowledge of the conversion of his movable property within 3 years prior to suit. But it has been pointed out in those decisions that the burden is a shifting one and that it is sufficient for the plaintiff to show a prima facie case that the cause of action is not barred by limitation. But the parties have adduced evidence in this case and the case has to be decided on evidence and not merely on the burden of proof.

[After discussing the evidence His Lordship said : ]

9. If we act on the evidence in this case and not on conjectures and surmises, there can be no doubt that the appellants plaintiffs came to know of the absolute title put forward by the first defendant only oh receiving the reply notice and the suit is, therefore, Clearly within time.

10. The only remaining question to be considered in this case is whether the appellants are bound to pay for the improvements effected by the contesting first respondent. Both the Courts below have found that the first defendant has effected improvements to the value of Rs. 4,500 and that in case the plaintiffs get a decree for redemption, they should not only pay the mortgage amount, but also the value of the improvements. Sri T. R. Mani appearing for the appellants contended that by virtue of Section 72 (b) of the Transfer of Property Act, a mortgagee in possession may spend such money as is necessary only for the preservation of the mortgaged property from destruction, forfeiture or sale and that the claim of the appellants for improvements is directly governed by Section 63-A of the Transfer of Property Act. In Arunachala Chetti v. Sithayi Ammal I.L.R. (1896) Mad. 327 it has been held that Section 72 (b) of the Transfer of Property Act does not permit a mortgagee in possession to effect improvements. In Gopilal v. Abdul Hamid : AIR1928All381 , a decision prior to the amendment of 1929, it has been held that the claim of a mortgagee for improvements is governed by the specific provision contained in Section 63 of the Transfer of Property Act and not by the general provision contained in Section 51 of that Act. It is true a mortgagee as mortgagee cannot claim for the value of improvements under Section 51 of the Transfer of Property Act as his claim would be governed by Section 63-A. Sri T. R. Mani referred to Section 59-A of the Transfer of Property Act and urged that unless otherwise expressly provided, reference in the Chapter on Mortgages to mortgagors and mortgagees shall be deemed to be references to persons deriving title from them respectively. A suit for redemption against a mortgagee in possession would fall under Article 148 of Schedule I of the Limitation Act of 1908. But a suit to recover possession of property which has been mortgaged but subsequently transfered by the mortgagee for valuable consideration is governed by Article 134 of Schedule I of the Limitation Act of 1908. Thus there is a distinction between a suit against mortgagee and the one against an absolute transferee from a mortgagee. The word ' mortgagee' would by virtue of Section 59-A of the Transfer of Property Act include persons deriving title of the said mortgagee. Thus if a mortgagee transfers or assigns his mortgage right to another, the transferee would also be a mortgagee, whose claim for improvements would fall under Section 63-A of the Transfer of Property Act. The claim of the first defendant in this case which is governed by Article 134 of the Limitation Act clearly falls within the terms of Section 51 of the Transfer of Property Act and there is nothing on principle to deprive him of the benefits of that section. In Ramkaur v. Pratap Singh (1919) 51 I.C. 689, the mortgagee was misled by a term of the mortgagee that after five years the transaction is to be treated as a sale and effected improvements. It was held in that case that ' the mortgagee had a reasonable ground to entertain a bona fide belief that, after expiry of the period stipulated for redemption, there is no intention on the part of the mortgagor to redeem, and that he is, therefore, the owner of the property '. In this view, it was held equitable that the mortgagor while retaining the benefit of the improvement, should pay its cost at the time of redemption. In Pandian Pillai v. Vellayappa Rowther 33 M.L.J. 316 there was a condition converting the mortgage into a sale and it was held to be a clog on the equity of redemption. But the mortgagee who was misled by the condition into believing himself to be an absolute owner, was allowed compensation for improvements under Section 51 of the Transfer of Property Act. It is true this case has been distinguished in Gopilal v. Abdul Hamid : AIR1928All381 , already referred to But the facts of the present case are very much stronger for invoking Section 51 of the Transfer of Property Act, Exhibit B-3, B-5, B-7 and B-9; are absolute transfers. Under Exhibit B-9, the first defendant claims to have got absolute title to the properties mortgaged under Exhibit B-1. It is true the absolute title claimed by the first defendant under Exhibit B-9 is defective. But it could not be said that he did not believe in good faith that he is absolutely entitled to the property purchased by him under that document. The requirements of Section 51 are fully satisfied in this case. The claim of the first defendant for improvements under Section 51 of the Transfer of Property Act cannot be defeated by stating that he is really a mortgagee as he could have got only the right, title and interest of the mortgagee under Exhibit B-1 and that his claim would be governed by Section 63-A of the Transfer of Property Act. In our opinion, the first defendant is entitled to claim the value of improvements, namely, Rs. 4,500 by virtue of Section 51 of the Transfer of Property Act.

11. Sri T.R. Mani did not challenge the findings of the Courts below that the plaintiffs are not entitled to claim any benefit of scaling down the debt due under the mortgage Exhibit B-1 by virtue of Madras Act TV of 1938.

12. In the result, the decrees and judgments of the Courts below dismissing the suit of the plaintiffs are set aside and the suit for redemption is decreed. But the appellants and respondents 4 and 5 should pay not only the mortgage amount, but also the value of the improvements, namely Rs. 4,500 fixed by the Courts. below. The appellants are entitled to costs of this Court and of the lower appellate Court. The parties shall bear their respective costs in the trial Court as ordered by the Subordinate Judge, as this is a suit for redemption. Time for redemption six months.


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