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C.P. Kandaswami Mudaliar (Deceased) and anr. Vs. Palaniammal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1973)2MLJ457
AppellantC.P. Kandaswami Mudaliar (Deceased) and anr.
RespondentPalaniammal and ors.
Cases ReferredLilachand v. Tukaram
Excerpt:
- .....by adverse possession.2. the trial court held that the plaintiff is entitled to redeem the suit mortgage and, therefore, granted a preliminary decree for redemption, partition and separate possession of the plaintiff's half share. the said decision of the trial court has also been affirmed by the lower appellate court.3. in this second appeal by the first defendant it is contended that the decree and judgment of the courts below granting redemption cannot be sustained in law. the learned counsel for the appellant, however, did not challenge the findings of fact given by the courts below that the plaintiff was entitled to a half share in the mortgage property and the plea based on a family arrangement by which the entire mortgaged property had exclusively been allotted to his.....
Judgment:

G. Ramanujam, J.

1. The first defendant is the appellant. The suit is one for redemption, of a usufructuary mortgage dated 3rd January, 1922 and for partition and separate possession of the plaintiffs' alleged half share in the suit properties. The suit was resisted mainly by the appellant as the first defendant, contending that the mortgage had been discharged by him on 30th June, 1949 and that as there is no subsisting mortgage, there is no question of its redemption. He also contended that he had become the absolute owner of the suit properties by virtue of this purchase on 30th June, 1949 and that, in any event, he had perfected title to the suit properties by adverse possession.

2. The trial Court held that the plaintiff is entitled to redeem the suit mortgage and, therefore, granted a preliminary decree for redemption, partition and separate possession of the plaintiff's half share. The said decision of the trial Court has also been affirmed by the lower appellate Court.

3. In this second appeal by the first defendant it is contended that the decree and judgment of the Courts below granting redemption cannot be sustained in law. The learned Counsel for the appellant, however, did not challenge the findings of fact given by the Courts below that the plaintiff was entitled to a half share in the mortgage property and the plea based on a family arrangement by which the entire mortgaged property had exclusively been allotted to his vendor had not been established. To appreciate the legal contention put forward by the learned Counsel for the appellant, it is necessary to set out a few facts.

4. The suit property originally belonged to the second defendant, his brother Nachimuthu Pandaram and their mother Karunai Ammal who usufructuarily mortgaged the same in favour of the first defendant on 3rd January, 1922 for a sum of Rs. 100. Later, the first defendant purchased the interest of Nachimuthu Pandaram from his heirs. The plaintiff has purchased the interest of the second defendant in the mortgaged property. It was the case of the first defendant that the mortgaged property absolutely belonged to Karunai Ammal, that after her death the suit property came to be allotted exclusively to Nachimuthu Pandaram under a family arrangement, that the second defendant was allotted some other properties in lieu of his interest in the suit property that, therefore, the second defendant had no right, title or interest in the suit property and that, therefore, the plaintiff could not have acquired any interest from the second defendant in relation to the suit property. As already stated, the Courts below have found that the family arrangement set up by the first defendant had not been established. The Courts below have also found that Nachimuthu Pandaram and the second defendant became entitled to a half share each in the suit property. We have to find out whether the plaintiff who has been held to be entitled to a half share in the suit property by virtue of his purchase of that share from the second defendant can redeem the mortgage in favour of the first defendant who had purchased the half share therein from Nachimuthu Pandaram.

5. The learned Counsel for the appellant contends before me that in view of the fact that the first defendant has purported to purchase the entirety of the property from the heirs of Nachimuthu Pandaram, his possession has become adverse and that he is no longer in the position of a mortgagee under Exhibit B-1. He further contends that the sale by the heirs of Nachimuthu Pandaram was with a direction to discharge the mortgage, and therefore, the mortgage should be deemed to have been discharged and as such no decree for redemption could be passed after the mortgage debt is wiped out. It is also contended that even if a suit for redemption could be maintained, it could have been filed within 12 years from the date of the sale by the heirs of Nachimuthu under Exhibit B-3 dated 30th June, 1949 and that the suit in this case having been filed in 1964 it was barred by time. The learned Counsel has referred to the following decisions in support of his contention.

6. In Sheik Dawood v. Moldeen Batcha 48 M.L.J. 264 : A.I.R. 1925 Mad. 566, it has been held that where a usufructuary mortgagee in possession of property purchase the property in lieu of the debt due from the mortgagor, a direction by the vendor to keep the property as absolute owner amounts to delivery and, therefore, the vendee's possession from the moment of sale is adverse to the vendor. In Chinna Subba Rao v. Mattapalli Raju (1950) 1 M.L.J. 752 : A.I.R. 1950 F.C. 1 : (1949) F.C.R. 484 : (1949) F.L.J. 398, the Federal Court recognised the principle that the right of redemption being an incident of a subsisting mortgage would stand extinguished if it is found that the mortgage has been discharged. Badri Singh v. Baldeo Singh : AIR1962Pat198 , was also a similar case where the mortgagees had purchased the property from the mortgagors and asserted adverse title and the Court held that the mortgagee could do so. But in the above three cases the entire mortgaged property had been purchased by the mortgagee and there was a merger of the mortgagee's interest with the rights of ownership. But in this case, as already stated, the mortgagee has purchased only a half share of the mortgaged property and the plaintiff has acquired the equity of redemption in the other half. Therefore, the principle of the above decisions may not apply to the facts of this case.

7. Ananthan v. Krishna Pillai A.I.R. 1957 T.C. 145, has been referred to. In that case the question was whether the possession of the mortgagee after the mortgage debt has been satisfied is adverse to the mortgagor. The Court held that where there is a conscious act on the part of the mortgagor of paying the mortgage amount, getting possession of part of the mortgage security, obtaining all the deeds back from the mortgagee and executing a registered receipt, there will be clearly adverse possession if the mortgagor allows the mortgagee to continue to be in possession of a portion of the mortgaged property. Kunjayamma v. Kunchali : AIR1970Ker289 , also is a similar case. In that case the mortgage amount got wiped off by adjustment against arrears of michavaram as agreed to between the parties. The question was whether the mortgagee's possession of the mortgaged property after the mortgage debt is wiped off was adverse to the mortgagor. The Court held that the suit for redemption will not lie but a suit for possession alone is maintainable as there was no subsisting mortgage on the date of the suit and that the suit, if treated as one for possession, was barred by time under Article 144 of the Limitation Act. The principle laid down in the above case cannot be applied here as there was no agreement to scale down the debt and it is only by operation of law the debt is scaled down. The usufructurary mortgage in favour of the first defendant being dated 3rd January, 1922, its redemption will get barred only after the lapse of twelve years from the date when a Court under Section 19-A of the Madras Act (IV of 1938) declares that the' mortgage debt had been completely scaled down under Section 9-A of that Act as a result of the mortgagee having been in possession of the mortgaged property for thirty years. In this case the suit has been filed on 4th June, 1964 for a declaration that the. debt has been wiped out and for redemption in consequence of such declaration. Hence it will be within the period of twelve years from the date when the debt has been declared to have been wiped' off as per the said Section 9-A.

8. Kesab Lal v. Bhola Nath : AIR1930Cal402 , was a case where a part of the mortgaged property was sold by the mortgagor to the mortgagee in possession and from the consideration received the whole mortgage was satisfied. The mortgagee, however, continued to be in possession of the remaining part of the property even after the satisfaction of the mortgage debt. It was held by the Court that the possession of the mortgagee after the mortgage was satisfied was adverse to the mortgagor. But in that case the sale of' part of the mortgaged property was by the mortgagor. In the case on hand the purchase was of a portion of the equity of redemption from the representatives in interest of one of the co-mortgagors and not the entirety of the equity of redemption. Therefore, that decision cannot obviously apply. Lalji Jetka v. Kalidas : [1967]1SCR873 , was a case where a mortgagee in possession purchased the mortgaged property from the mortgagor. The question was whether if the sale transaction is voidable, possession of the mortgagee would become adverse from the date of his purchase. The Supreme Court observed:

It is a well settled proposition that a mortgagor can sell the mortgaged property to his mortgagee and thus put the mortgagee's estate to an end and thereafter all the right, title and interest in the property would vest in the mortgagee. Such a sale would be valid and binding as between them and thenceforth the character of possession as a mortgagee would be converted into possession as an absolute owner. Even if such a sale is held to be voidable and not binding on a subsequent purchaser, the character of possession based on assertion of absolute ownership by the mortgage does not alter, and if that possession continues throughout the statutory period it ripens into a title on the property.

Here again the entire mortgaged property had been sold by the mortgagor to the mortgagee and, therefore, the mortgagee's possession subsequent to his purchase was held to have become adverse to the mortgagor and that is not the case here. In Prithi Nath Singh v. Suraj Ahir : [1963]3SCR302 , the mortgage money had been paid by the mortgagor to the mortgagee, but the mortgagee continued in possession of the mortgaged property. The Supreme Court expressed the view that when the mortgage money has been paid up the right to redeem ceases and that a suit for redemption cannot be maintained. But that was a case where the mortgagor by his conscious act paid the mortgage money but did not take steps to recover the mortgaged property from the mortgagee even though he had become entitled to possession of the property as a result of extinction of the mortgage. It was, therefore, held that the mortgagor's right only to sue for possession and not for redemption. But in the case on hand there has been no payment by the plaintiff who has become entitled to a half share in the equity of redemption and he seeks a declaration from the Court that the mortgage debt has been wiped out by operation of Section 9A of Madras Act (IV of 1938) and it is only after such a declaration is given by the Court the mortgage debt gets wiped out but not before. As has been pointed out by the Supreme Court in Mruthunjay Pani v. Narmada Bala Sasmal : [1962]1SCR290 , the governing principle is 'once a mortgage always a mortgage' till the mortgage is terminated by the act of the parties themselves, by merger, or by order of the Court. Admittedly the mortgage has not been extinguished by act of parties. There has also been no merger of the plaintiff's entire interest in the mortgaged property and there is also no order of Court putting an end to the mortgage before the filing of the suit. It has been clearly laid down in Lilachand v. Tukaram : [1960]1SCR693 , that where the mortgagee came into possession of the property pursuant to the usufructuary mortgage, his possession had a lawful origin and a mere assertion of an adverse title cannot affect the subsisting equity of redemption of the mortgagors or operate to shorten the period of limitation prescribed for a suit for redemption.

9. On a due consideration of the matter, I am of the view that the first defendant cannot by a mere assertion of his own or by a unilateral act on his own part convert his possession of a moiety of the property as a mortgagee into that of an absolute owner, which he can do so only if he had purchased the entire equity of redemption from the mortgagor. If there has been a sale of the entire mortgaged property by the mortgagors to the mortgagee thus putting an end to the mortgage, even if the sale has been held to be invalid subsequently, the mortgagee's possession subsequent to the date of the said sale would become adverse, for by the conscious act of parties the mortgage would have been put an end to. Therefore, the contention of the learned Counsel for the appellant that the plaintiff cannot maintain a suit for redemption and that even if it could be maintained it is barred by limitation cannot be accepted. I therefore agree with the view taken by the Courts below and dismiss the second appeal. There will, however, be no order as to coast. No leave.


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