PUNJAB & HARYANA HIGH COURT
Rajiv Narain Raina, J.
Raj Kumar and Ors. - Appellant
Versus
Ami Chand and Ors. - Respondent
RSA Nos. 1603 and 1604 of 2008 (O&M)
Decided On : 01-07-2015
mortgage - property rights - Transfer of Property Act, 1882, Limitation Act, 1963 - section 62 of the Transfer of Property Act, 1882, article 61 of the Schedule to the Limitation Act, 1963
Fact of the Case:
The plaintiffs, mortgagees of the suit property, brought a suit for declaration to claim ownership of the property by effluxion of time. The trial court decreed the suit, but the court of first appeal reversed the decision. The Supreme Court held that in the case of a usufructuary mortgage, limitation would run only after redemption money is paid, and there is no foreclosure by limitation until then.
Finding of the Court:
The trial court found that the plaintiffs were in cultivating possession as mortgagees for over 30 years, and the defendant's claim of adverse possession was negated. The appeal court held that the plaintiffs were in possession as mortgagees but had not become owners by way of foreclosure. The appeals were dismissed.
Issues: The central issues were whether the plaintiffs were owners in possession of the suit property and whether the suit was time-barred. The court also considered the nature of the mortgage and the applicability of the legal provisions.
Ratio Decidendi: The court found that the mortgage was a usufructuary one, and the bar of limitation would run as per law. The legal position clarified by the Supreme Court in similar cases was applied to dismiss the appeals.
Final Decision: The appeals were dismissed as they did not give rise to any other substantial question of law, and the parties were ordered to bear their own costs.
1. This order disposes of RSA No. 1603 of 2008 titled Raj Kumar and others vs. Ami Chand deceased through his L.Rs. Man Singh and others & RSA No. 1604 of 2008 titled Raj Kumar and others vs. Man Singh and others.
2. These two appeals were adjourned sine die on December 08, 2009 to await the decision of the Supreme Court in SLP (Civil) CC 11029 of 2008 arising out of RSA No. 1029 of 1988 tilted Singh Ram (D) through LR vs. Sheo Ram and others decided on August 18, 2008 and rendered by the Full Bench of this Court.
3. The plaintiffs are the appellants in these appeals. They were mortgagees of the suit property. They brought a suit for declaration to the effect that they had become owners of the property in dispute by effluxion of time with the expiry of 30 years. The suit was decreed by the trial court but was reversed by the court of first appeal on the ground that in the case of a usufructuary mortgage, where no period of limitation is prescribed to seek redemption, then the right to redemption is not foreclosed. The lower appellate court followed the law laid down by the Full Bench of this court meanwhile in Ram Kishan and others vs. Sheo Ram and others, 2008(1) RCR (Civil) 334 which had been pronounced by then clarifying the legal position. The view expressed by this court has been upheld by the Supreme Court in case reported in Civil Appeal No. 5198 of 2008 after leave was granted in the above noted SLP reported in case Singh Ram v. Sheo Ram, (2014) 9 SCC 185: 2014 (4) RCR (Civil) 179. The Supreme Court has commended itself to the view that in the case of a usufructuary mortgage, limitation would run only after redemption money is paid otherwise there is no foreclosure by limitation. Verily said, once a mortgage is always a mortgage and always open to redemption.
4. The respondents have filed applications bearing CM No. 5526-C of 2015 in RSA No. 1603 of 2008 and CM No. 5530-C of 2015 in RSA No. 1604 of 2008 praying that these appeals deserve to be dismissed in view of the law settled by the Supreme Court which applies squarely to the facts of these appeals. The ratio of the ruling in the Supreme Court judgment is in the Court holding that the special right of a usufructuary mortgagor under section 62 of the Transfer of Property Act, 1882 to recover possession commences in the manner specified therein, i.e. where mortgage money is paid out of rents or profits or partly out of rents or profits and partly by payment or deposit by mortgagor of the redemption money. Until then, limitation does not start to run for purposes of article 61 of the Schedule to the Limitation Act, 1963. The usufructuary mortgagee is not entitled to file a suit for declaration that he has become an owner merely on the expiry of 30 years from the date of the mortgage. The decision on the law point commended by this court in the Full Bench ruling in Ram Kishan was affirmed and the contrary view taken by the Full Bench of the High Court of Himachal Pradesh at Shimla in Bhandaru Ram (D) Thr. L.R. Ratan Lal vs. Sukh Ram,: AIR 2012 (H.P.) 1 (FB) was overruled by the Supreme Court.
5. On facts, the position was that the suit land was mortgaged by the ancestors of the defendant with the ancestors of the original plaintiffs for more than 40 years prior to the filing of the suit in 1996 and the period of redemption of 30 years had already expired. Hence, the original plaintiffs became owners in possession of the disputed land by prescription, or so they argued. The plaintiffs stated that they asked defendant Ami Chand to admit the plaintiffs claim as owners in possession of the land in dispute but the defendant refused to acknowledge the plea. Hence, the cause of action arose to file the lawsuit and it was instituted in the civil court.
6. On notice, defendant appeared and filed written statement along with a counter-claim. In his written statement, the defendant denied plaintiffs as mortgagees in possession of the agricultural land in dispute
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