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PATNA HIGH COURT
K.B.N.Singh and P.S.Sahay JJ.
Sushil Kumar Singh And Another
Versus
Braj Mohan Singh
Civil Writ Jurisdiction Case No. 984 of 1978 ; 985 of 1978 ;
Decided On : NOVEMBER 6, 1980
USUFRUCTUARY MORTGAGE - MORTGAGE BY CONDITIONAL SALE - DISTINCTION - CLOG ON EQUITY OF REDEMPTION - VALIDITY - BIHAR MONEY LENDERS ACT, 1974, SEC. 12 - INTERPRETATION.
Fact of the Case:
The petitioners, mortgagees under two usufructuary mortgage bonds, challenged the orders of the Deputy Collector and the Collector directing them to deliver possession of the mortgaged land to the mortgagors, claiming that the mortgages were not usufructuary mortgages but mortgages by conditional sale and that the right of redemption of the mortgagors was extinguished.
Finding of the Court:
The court held that the mortgage deeds in question were usufructuary mortgage bonds and not mortgages by conditional sale, as they lacked the essential characteristics of a mortgage by conditional sale. The court also held that the provision in the mortgage deeds that if the mortgagors failed to redeem the mortgages within a period of six years, the mortgages would be treated as a sale, was a clog on the equity of redemption and was an invalid condition which had to be ignored.
Issues: 1. Whether the mortgage deeds in question were usufructuary mortgage bonds or mortgages by conditional sale? 2. Whether the provision in the mortgage deeds that if the mortgagors failed to redeem the mortgages within a period of six years, the mortgages would be treated as a sale, was a valid condition?
Ratio Decidendi: 1. The court held that the mortgage deeds in question were usufructuary mortgage bonds and not mortgages by conditional sale, as they lacked the essential characteristics of a mortgage by conditional sale. The court noted that the mortgages were for a fixed period, that the mortgagee was to remain in possession of the property and enjoy the usufructs in lieu of interest, and that the mortgagors had the right to redeem the mortgages on or before a specified date. 2. The court held that the provision in the mortgage deeds that if the mortgagors failed to redeem the mortgages within a period of six years, the mortgages would be treated as a sale, was a clog on the equity of redemption and was an invalid condition which had to be ignored. The court noted that the right of redemption is a statutory right that cannot be taken away or limited by any contract between the parties.
Final Decision: The court dismissed the writ petitions, holding that the impugned orders of the Deputy Collector and the Collector were valid and that the petitioners were not entitled to possession of the mortgaged land.
K.B.N.SINGH, J.
1. In both these writ petitions common questions of law arise and they have been heard together and are being disposed of by this order.
2. The necessary facts for the disposal of these two writ petitions may shortly be stated. On the 26.03.1964, Braj Mohan Singh (respondent No. 1) and Ram Mohan Singh, father of respondents 2 to 4, of C.W.J.C. No. 984 of 1978 borrowed a sum of Rs. 2800.00 from Sushil Kumar Singh, the petitioner in the said writ petition, and put the mortgagee in possession of 1 acre and 13 decimals of land, describing the document as Shartia Sudbharna Meyad Panch Sal, a true copy of which has been filed as Annexure-1.
3. By a similar document dated the 28th of June, 1966 respondents 1 to 4 of C.W.J.C. No. 985 of 1978, who are the same persons as respondents 1 to 4 in the first writ petition, borrowed a sum of Rs. 11,000.00 and put the mortgagee Murlidhar Singh, the petitioner of C.W.J.C. No. 985 of 1978, in, possession of 3 acres and 61 decimals of land. This document has also been described as Shartia Sudbharna Wo Meyad Chhey Sal.
4. After coming in force of the Bihar Money Lenders Act, 1974 (hereinafter referred to as "the Act"), which provided automatic redemption of usufructuary mortgage after a period of seven years, respondents 1 to 4 filed two applications before the Deputy Collector Incharge Land Reforms, Monghyr (respondent No. 5) in respect of the aforesaid two mortgage bonds, claiming to recover possession of the mortgaged land as more than seven years had expired (which were numbered as Cases Nos. 186 and 187 of 1976-77 in relation to both the mortgages respectively. The mortgagees appeared and contested claiming that the mortgages in question were not usufructuary mortgages but mortgages by conditional sale and no payment had been made within the due period and consequently the right of redemption of the mortgagors was extinguished. Respondent No. 5 rejected the contention of the mortgagees in both the cases and directed the mortgagees to deliver possession of the mortgaged land by two separate orders dated 17-8-1976, as contained in Annexure-2 to each of the writ petitions. Against those orders the writ petitioners filed revisions before the Collector of Monghyr (respondent No. 6), who heard both the revisions together and by a common order dated 31-3-1978 dismissed the revisions filed by the writ petitioners, a copy of which has been filed as Annexure-3 to each of the writ petitions. Against this order the present two writ petitions have been filed by the mortgagees and a prayer has been made in both the writ petitions to quash Annexures-2 and 3. A counter-affidavit has been flied on behalf of respondents 1 to 4 in each of the writ petitions challenging certain assertions made in the writ petitions.
5. Mr. R.K. Verma, learned counsel appearing on behalf of the writ petitioners has urged that the mortgage bonds in question are anomalous mortgages and as Sec.12 of the Act applies only to usufructuary mortgage bonds and not to anomalous mortgages the impugned orders (Annexures-2 and 3) are wholly without jurisdiction. Learned counsel has placed reliance in this connection on a Full Bench decision of this Court in the case of Madho Singh V/s. State of Bihar (1978 BBCJ (HC) 86):(AIR 1978 Pat 172). The ground of attack that the mortgages in question are not usufructuary mortgages but anomalous mortgages is based on two factors, namely (a) that there is a covenant to pay the mortgage money on the due date and (b) that there is also a recital in the mortgage bonds that in case the mortgagees are dispossessed from the mortgaged security before the due date, the mortgagors are to pay damages and interest to the mortgagees. In the alternative it has also been argued that even if the condition that redemption has to be made by a particular date and not thereafter be construed to be a clog on the equity of redemption and, therefore invalid, still the mortgages would not be usufructuar
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