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IN THE HIGH COURT OF ORISSA
S.C. Mohapatra, J.
AHALYA DEVI - APPELLANT
Versus
KUMAR ROUT AND OTHERS - RESPONDENT
Second Appeal No. 17 of 1981
Decided On : 20-02-1989
MORTGAGE - POSSESSION - DISCHARGE - SECTION 17 OF THE ORISSA MONEY LENDERS ACT, 1939 - INTERPRETATION - MORTGAGE WITH CONDITIONAL SALE - POSSESSION NOT DELIVERED - NO DISCHARGE.
Fact of the Case:
Plaintiff advanced a loan of Rs. 1,000/- to deceased Defendant Purnananda who secured the loan amount by execution of a mortgage deed on 11-8-1969 which was registered. When the amount was not paid as stipulated in the deed, Plaintiff filed the suit for declaration of right, title and interest by foreclosing all the rights of the Defendant and to deliver possession of the disputed property or in the alternative for a preliminary decree for payment of the principal with interest amounting to Rs. 1,6201- failing which for realisation of the same by putting the property to sale.
Finding of the Court:
The mortgage in Ext. 1 is not a possessory mortgage under the Act to attract Section 17 of the Act. The mortgagee must be in possession. Thus, the mortgage becomes possessory mortgage from the date mortgagee comes into possession of the land given as security for the loan. In this dispossession of Bhramar from 1970 would make the mortgage a possessory mortgage. Prior to it, the mortgage shall be treated to be a mortgage with conditional sale and not a possessory mortgage. u/s 17(1) of the Act on completion of seven years, a possessory mortgage stands discharged. A possessory mortgage losses its character of such mortgage no sooner possession is taken away by the mortgagee. On completion of six years, Purnananda took away possession from Bhramar (D.W. 3), who was possessing on behalf of the Plaintiff. Thus, before expiry of seven years, possessory mortgage lost its character of such mortgage and there was no scope for discharge of the same u/s 17(1) of the Act.
Issues: Whether the mortgage in Ext. 1 is a possessory mortgage under the Act to attract Section 17 of the Act.
Ratio Decidendi: Section 17 of the Act is a protective legislation for the benefit of the debtors. Legislature in its wisdom decided that possession for seven years by the mortgagee would have the effect of discharge of the mortgage. Thus, annual yield for seven years received or receivable by the mortgagee with possession of the land was provided to be sufficient to discharge the loan with interest. On this basis for any misconduct of the debtor if the mortgagee suffers there may be penal consequences or a suit for damages may lie if the facts so disclose. Under the Act, there being no prohibition with penalty for violation thereof, Section 17 cannot be interpreted to be penal in character. Accordingly, the finding of fact that the Plaintiff was in possession of the mortgaged land for six years, there would be proportionate reduction of the debt. In absence of any other provision in the Act, it shall be deemed that 6/7th debt with interest has been discharged. Balance 1/7th debt with interest is to be paid by the mortgagor. Thus comes to Rs. 231/-.
Final Decision: Appeal partly allowed. Suit decreed to the extent of Rs. 231/- only. Unless the amount is paid within two months from today the Plaintiff shall be entitled to recover the same with interest at 9% from the date of filing of the suit till recovery. Deposit in the Court shall amount to payment. The suit is, accordingly, decreed in part with proportionate costs.
JUDGMENT :
S.C. Mohapatra, J. - Plaintiff is the Appellant in this Second Appeal against a confirming judgment.
2. Plaintiff advanced a loan of Rs. 1,000/- to deceased Defendant Purnananda who secured the loan amount by execution of a mortgage deed (Ext. 1) on 11-8-1969 which was registered. When the amount was not paid as stipulated in the deed, Plaintiff filed the suit for declaration of right, title and interest by foreclosing all the rights of the Defendant and to deliver possession of the disputed property or in the alternative for a preliminary decree for payment of the principal with interest amounting to Rs. 1,6201- failing which for realisation of the same by putting the property to sale.
3. Case of the Plaintiff is that the deceased Defendant did not deliver possession despite the terms of agreement in Ext. 1 and, accordingly, as per the term, he becomes the owner of the property. At least he is entitled to the amount advanced with interest. Defendant Purnananda in his written statement claimed that possession of the disputed property was delivered to the Plaintiff who appropriated the usufructs through her bhag tenant Bhramar. It was asserted that Plaintiff appropriated the crops for seven years and accordingly, the mortgage stood discharged u/s 17 of the Orissa Money Lenders Act, 1939 (hereinafter referred to as 'the Act'). On the death of Purnananda, the substituted Defendants, the sons and daughter of Purnananda filed a written statement to the same effect.
4. Two witnesses were examined by the Plaintiff and three witnesses were examined by the Defendants. Plaintiff proved the mortgage deed (Ext. 1) and Defendants proved certified copy of the decree in another suit for money (Ext. A). Trial Court on assessment of evidence held that Plaintiff was possessing the land through D.W. 3 Bhramar and appropriated the usufructs for seven years. Accordingly, the mortgage stood discharged u/s 17(1) of the Act. In appeal by the Plaintiff, learned District Judge held that the mortgage being in the month of August when crop was standing, after harvest crop was handed over and Plaintiff continued in possession till end of 1976 where after Defendants have taken back possession and accordingly, dismissed the appeal against which this Second Appeal has been held by the Plaintiff.
5. u/s 100(3), Code of Civil Procedure, the memorandum of appeal is to precisely state the substantial question of law involved in the appeal. Under Sub-section (4) there of High Court if satisfied that a substantial question of law is involved in any case, it shall formulate that question and as provided in Sub-section (5) the appeal is to be heard on the question so formulated. Order 41 Rule 11, CPC provides that appeal is to be heard on admission. Order 42, Rule 1 provides that the provisions of Order 41 shall be applicable to Second Appeals. Thus, the question of la w is to be formulated by the High Court at the stage of admission. This Court while admitting the appeal passed the following order:
Ground No. 4 is certified to be raising a substantial question for hearing this appeal. Admit.
Ground No. 4 in the memorandum of appeal reads as follows:
For that the learned Court below has acted illegally and erroneously in not directing his attention to the interpretation of the mortgage document Ext. 1 and coming to a finding that it is a possessory mortgage. It is submitted that the deed not provide that the usufruct shall be adjusted either to interest or principal and in the absence of any such condition the said Ext. 1 cannot be held to be a possessory mortgage contemplated u/s 17 of the O.M.L. Act.
6. Mr. M.M. Das, learned Counsel for the Appellant submitted that Courts below have not considered whether the mortgage in Ext. 1 is a possessory mortgage under the, Act to attract Section 17 of the Act. He relied- upon the Explanation to Section 17 to urge that a mortgage on conditional sale as Ext. 1 does not provides for the requirements of the explanation and, a
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