IMPORTANT POINTS
Right of usufructuary mortgagor to recover possession commences when mortgage money is paid out of rents and profits or partly out of rents and profits and partly by payment or deposit by mortgagor. Until then, limitation does not start.
Usufructuary mortgagee does not become an owner merely on the expiry of 30 years from the date of the mortgage.

JUDGMENT

Adarsh Kumar Goel, J.

1. Leave granted in SLPs.

2. These matters have been put up before this Bench in pursuance of the order passed by a Bench of two Judges on 18.08.2008, as under:-

“As it appears that observations made by this Court in Prabhakaran & Ors. vs. M. Azhagiri Pillai & Ors., reported in 2006 (4) SCC 484, in regard to the interpretation and/or application of Article 61 of the Schedule appended to the Limitation Act, 1963 are contrary to the principles laid down by this Court in a large number of decisions, including Jayasingh Dhyanu Mhoprekar & Anr. vs. Krishna Babaji Patil & Anr., [1985 (4) SCC 162] as also various decisions referred to by the Full Bench of the High Court, we are of the opinion that the matter should be heard by a larger Bench.”

Before adverting to the question of reconciling conflicting opinions in various decisions, including the two decisions referred to above, we consider it appropriate to mention that by the impugned judgment, the Full Bench of the High Court of Punjab and Haryana at Chandigarh, considered the question "whether there is any time limit for usufructuary mortgagor to seek redemption?” and decided the said question in the negative, in favour of the respondent-mortgagor as follows:-

“Therefore, we answer the questions framed to hold that in case of usufructuary mortgage, where no time limit is fixed to seek redemption, the right to seek redemption would not arise on the date of mortgage but will arise on the date when the mortgagor pays or tenders to the mortgagee or deposits in Court, the mortgage money or the balance thereof. Thus, it is held that once a mortgage always a mortgage and is always redeemable.”

The correctness of the above view is the subject matter of consideration before this Court.

3. The predecessor of the respondents mortgaged the suit property on 11.08.1903 to the predecessor of the appellants for a sum of Rs.80/-. The appellant-plaintiffs filed a suit for declaration that the suit land having not been redeemed for a period of more than 60 years, the defendants lost all rights, title and interest therein and the appellants became the owners by prescription.

4. The trial Court considered the matter under Issue No.2 and held that limitation starts running from the date when the mortgagee demands the money and the mortgagor refused the same. Discussion on the said issue is as follows:-

“There is merit in the second contention made on behalf of the defendants. It is case of usufructuary mortgage and in case of usufructuary mortgage and no period for the payment of mortgage amount was fixed. It is not the case of the plaintiffs that the plaintiffs ever made demand for the mortgage amount and they refused. In this situation, no cause of action could accrue to the plaintiffs, which could only accrue on demand of the mortgage amount from the defendants and refusal of same by the defendants. This view also finds support from the decision in the case of Nilkanth Balwant Natu & Ors. vs. Vidya Narasinh Bharathi Swami & Ors. AIR 1930 PC 188). The law laid down in several cases referred to by the learned counsel for the plaintiffs relating to the interpretation of provisions of Section 28 and Article 148 of the Limitation Act, does not apply on the facts of the instant case at all as the periods of limitation is to run from the date on which the cause of action arises. In the result, I hold that the plaintiffs have not become owners of the suit land on the expiry of period of more than 60 years. Issue No.1 is thus decided in favour of the plaintiffs and against the defendants, and Issue No.2 is decided against the plaintiffs and in favour of defendants.”

The above view was affirmed by the appellate Court as follows:-

“I find force in the contention of the learned counsel for the respondents. The present one is a case of usufructuary mortgage and in case of such a mortgage no period of payment is fixed. A reading of the mortgage deed would show that no time had been fix