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SUPREME COURT OF INDIA
MOHAN M. SHANTANAGOUDAR, R. SUBHASH REDDY, JJ.
SHANKAR SAKHARAM KENJALE (DIED) THROUGH HIS LEGAL HEIRS – APPELLANT(S)
VERSUS
NARAYAN KRISHNA GADE AND ANOTHER – RESPONDENT(S)
CIVIL APPEAL NO. 4594 OF 2010
Decided On : 17-04-2020
(A) Transfer of Property Act, 1882 – Section 58 – Redemption of mortgage – Right of redemption under a mortgage deed can come to an end or be extinguished only by a process known to law, i.e., either by way of a contract between parties to such effect, by a merger, or by a statutory provision that debars mortgagor from redeeming mortgage – A mortgagee who has entered into possession of mortgaged property will have to give up such possession when a suit for redemption is filed, unless he is able to establish that right of redemption has come to an end as per law – This emanates from legal principle applicable to all mortgages – “Once a mortgage, always a mortgage”. (Para 14)
(B) Indian Trust Act, 1882 – Section 90 – Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950 – Sections 3, 5 and 8 – Redemption of mortgage – Resumption of suit land under Abolition Act and its subsequent re-grant in favour of mortgagee (Appellants) – Resumption of watan land to Government under Abolition Act does not affect rights of an alienee of Watandar or his representative of such land under Watan Act or that of any person claiming through or under him – In respect of watan land that has been lawfully leased and wherein lease is subsisting on the day appointed for coming into force of Abolition Act – Rights of lawful permanent Mirashi tenant, survive resumption of suit land to Government by virtue of the proviso to Section 3(3) as well as Section 8 of Abolition Act – Rights of permanent tenants over watan lands were intended to subsist even after coming into force of Abolition Act – Failure on part of mortgagor to pay occupancy price and seek a re-grant is not fatal to his rights as a Mirashi tenant as tenancy in his favour continued to subsist despite introduction of Abolition Act – Relationship of mortgagor-mortgagee between parties did not cease to exist by virtue of such Act – Re-grant to Appellants’ predecessor based on actual possession as mortgagee cannot be divorced from existence of underlying mortgagor-mortgagee relationship between parties – Conditions stipulated under Section 90 of Indian Trusts Act, 1882 are satisfied – Advantage derived by Appellants (mortgagee) by way of re-grant must be surrendered to benefit of Respondents (Mirashi tenant – -mortgagor), subject to payment of expenses incurred by them in securing re-grant – High Court was justified in decreeing suit filed by Respondents and setting aside judgments of Trial Court and First Appellate Court – Appeal dismissed. (Paras 8,9, 13, 15, 17 and 22)
Facts of the Case:
Instant appeal arises out of the judgment dated 08.06.2009 passed by the High Court of Judicature at Bombay in Second Appeal No. 439 of 1987. Vide the impugned judgment, the High Court set aside the findings of the Trial Court and the First Appellate Court and directed the Trial Court to draw a preliminary decree of redemption of mortgage in favour of the Respondents herein.
Findings of the Court:
Mortgagee could only obtain re-grant in his favour by availing himself of his position as a mortgagee, as such re-grant is traceable to the possession of the land accorded to him by virtue of the mortgage deed. Further, the said re-grant was certainly in derogation of the rights of the mortgagor who was the permanent Mirashi tenant and thereby protected by virtue of the subsisting tenancy.
Result : Appeal dismissed.
JUDGMENT
MOHAN M. SHANTANAGOUDAR, J.
1. The instant appeal arises out of the judgment dated 08.06.2009 passed by the High Court of Judicature at Bombay in Second Appeal No. 439 of 1987. Vide the impugned judgment, the High Court set aside the findings of the Trial Court and the First Appellate Court and directed the Trial Court to draw a preliminary decree of redemption of mortgage in favour of the Respondents herein.
2. The factual background to this appeal is as follows:
1.1 The land in question was Paragana watan property/Inam land (hereinafter ‘suit land’). Such watan properties and watans were governed by the provisions of the Bombay Hereditary Offices Act, 1874 (hereinafter ‘Watan Act’). Smt. Laxmibai, wife of one Bhawani Raje Ghadge, was the watandar of the suit land. She had inducted one Mr. Ramchandra (successor of the Respondents herein) as a permanent Mirashi tenant of the land. Such tenancy was hereditary in nature.
2.2 On 14.05.1947, the said Ramchandra (hereinafter ‘Mirashi tenant—mortgagor’) executed a mortgage deed in favour of one Shankar Sakharam Kenjale (hereinafter ‘mortgagee’) mortgaging the suit land with a condition of sale for an amount of Rs. 900/- advanced by Shankar Kenjale for the purpose of Ramchandra’s household and personal sundry expenses. Per the terms of this deed, a period of ten years was envisaged for the repayment of the mortgage money and the mortgagee was placed in possession of the suit land.
2.3 Meanwhile, the Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950 (hereinafter ‘the Abolition Act’) came into force with effect from 25.01.1951 with a view to abolish Paragana and Kulkarni watans and to make provision for the performance of functions of some of these offices. Under this Act, Paragana and Kulkarni watans were abolished and watan lands were resumed to the Government, subject to Section 4. It is needless to observe that the suit land, being watan property, was also resumed to the Government subject to Section 4, which empowered the holder of the watan to seek re-grant of the land upon payment of the requisite occupancy price within prescribed period.
2.4 Notably, the original watandar did not seek re-grant of the suit land. However, relying on a Government Resolution dated 17.05.1956 (not placed on record) permitting persons in actual possession of the watan lands to seek re-grant, the mortgagee (successor of the Appellants herein) paid the requisite occupancy price and obtained a re-grant of the suit land in his favour in the year 1960.
2.5 The Respondents herein (successors of the mortgagor) then filed a suit for redemption of mortgage against Shankar Sakharam Kenjale (mortgagee) in Regular Civil Suit No. 190 of 1978 before the Civil Judge, Junior Division, Vaduj. It was contended that they had requested the mortgagee to accept the mortgage money and reconvey the land, but he had failed to do so. Vide judgment dated 09.12.1983, this suit was dismissed. It was observed that the deed dated 14.05.1947 was in the nature of a mortgage by conditional sale and not an outright sale. Further, it was found that with the coming into force of the Abolition Act and the failure of the original watandar and the Mirashi tenant–– mortgagor to secure a re-grant of the suit land, the said land stood resumed to the Government and the relationship of mortgagor-mortgagee between the parties ceased to exist. In light of this, it was held that the mortgagor’s right of redemption had also extinguished and the subsequent re-grant in favour of the mortgagee could not be seen as one on behalf of the mortgagor so as to pass on the benefits of the same to him.
2.6 The Respondents herein then preferred an appeal before the District Judge, Satara in Civil Appeal No. 25 of 1984. On 24.03.1987, this appeal was dismissed. The District Court reiterated the reasoning of the Trial Court that by virtue of the failure of the watandar and the Mirashi tenant—mortgagor to obtain a re-grant of the suit land in their favour,
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