//
you're reading...
legal issues

Limitation Act, 1963-Article 63-Possession of mortgage property by mortgagee-When becomes adverse against mortgagor-Held: On sale of mortgage property in favour of mortgagee, his/her status as mortgagee comes to an end and upon purchase, claims property as absolute owner-Possession becomes adverse to the mortgagor-original owner. Code of Civil Procedure, 1908-Order 34-Sale of part of property already mortgaged by mortgagor, to purchaser-Suit for declaration of title and possession of property by purchaser against mortgagee 12 years later-Maintainability of-Held: Suit for redemption of mortgage should have been filed and suit for declaration of title and possession is not maintainable -Mortgagee was in possession of the property, and also purchaser was claiming through mortgagor-Moreover, suit being filed after 12 years was time barred-Limitation Act, 1963-Article 63. Order 1, Rule 9-Non-impleadment of subsequent purchaser in money suit-Sale of property in execution of money decree and plaintiff becoming owner of property-Effect of-Held: Non-joinder is of no consequence since it was an independent transaction, he was neither necessary nor proper party and as such sale would bind him. Tamil Nadu Debt Relief Act, 1979-Mortgaged property sold in favour of mortgagee after four years-Plea of mortgagor and subsequent purchaser that mortgagee in possession of property for more than ten years as usufructuary mortgagee, as such mortgage statutorily discharged-Held: After auction sale, mortgagee became owner of property-Hence, provisions of the Act not applicable and benefit cannot be claimed. `A’, original owner of the property, mortgaged the property to defendant No. 1 in 1962 and since then defendant No. 1 was in possession of the property as usufructuary mortgagee. `A’ took another loan from defendant no 1 on other pro-note. In 1964 `A’ sold part of the property to respondent-plaintiff and the sale deed recited the factum of mortgage by `A’ to defendant no. 1. Since `A’ did not repay the amount under the separate pro-note, defendant no 1 filed money suit against `A’ and a decree was passed against `A’. In execution proceedings, the suit property was sold in public auction in 1966 and defendant no. 1-mortgagee purchased the same with the permission of the Court, sale certificate was issued and she took possession of the property. Subsequently, defendant no 1 sold the property to defendant No. 2. In 1980, respondent – plaintiff filed a suit for declaration of title and possession of part of the property against defendant No. 1. Respondent – plaintiff alleged that the respondent – plaintiff had purchased part of the suit property and had become owner of that portion; that defendant no. 1 was in possession of the property only as mortgagee of the property and continued to remain the same even after auction sale by court; that defendant no. 1 being in possession for more than ten years as mortgagee, mortgage was statutorily discharged under the Tamil Nadu Debt Relief Act, 1979 and as such was bound to deliver possession of the property. Defendant no. 1 contended that the suit was not maintainable since respondent – plaintiff ought to have instituted a suit for redemption of mortgage and not for declaration of title; that after the auction sale and confirmation thereof by Court, defendant no. 1 became owner of the property as she acquired title by adverse possession; that the debtor was not entitled to any benefit under the 1979 Act; and that the suit was barred by limitation. Trial Court passed decree in favour of respondent – plaintiff for title and possession of the property. Defendant no. 1 then filed an appeal. Lower Appellate Court allowed the appeal and set aside the decree passed by the trial court holding that after the auction sale by the Court and its confirmation, defendant No. 1 no more continued to be mortgagee in possession and her title was adverse to the mortgagor; that suit for redemption of mortgage should have been filed and not for declaration of title and possession of mortgage-property; that the suit was barred by limitation; and that defendant no. 1 filed money suit against `A’ and even though plaintiff was not impleaded, decree passed and sale of property was binding on the plaintiff. Aggrieved respondent – plaintiff filed Second Appeal. High Court upheld the order of trial court and allowed the appeal. Hence, the present appeal. Appellant – defendants contended that the Lower Appellate Court rightly dismissed the suit filed by the respondent – plaintiff; and the High Court erred in restoring the decree passed by trial court in favour of the respondent-plaintiff for title and possession of the property. =Allowing the appeal, the Court HELD: 1.1. In the instant case, it is correct to say that once the property was sold to defendant no. 1 who was mortgagee in possession, she could not be continued as mortgagee inasmuch as after the sale, she was claiming the property as an absolute owner thereof, her status as mortgagee came to an end with the purchase of property and in the eye of law, it could be said that she was claiming title over the property which was adverse to the owner of the property; and that when `A’ sold part of the suit property to the respondent – plaintiff, the property was already mortgaged to defendant No. 1 who was in possession of the property and that since the respondent – plaintiff was claiming through A – original owner, the respondent – plaintiff ought to have filed a suit for redemption of mortgage and not for declaration of title and possession of property; and as such respondent’s suit was not maintainable. [113-e-f; 116-f-g] 1.2. The auction took place on August 3, 1966 and the sale was confirmed and sale certificate was issued in favour of defendant No. 1 on September 5, 1966. Admittedly, the respondent – plaintiff filed suit in 1980, which was, after a period of twelve years and it was barred under Article 61 of the Limitation Act, 1963. Hence, Lower Appellate Court was right in dismissing the suit. [116-e-g] Padma Vithoba Chakkayya v. Mohammed Multani and Anr., AIR (1963) SC 70: [1963] 2 SCR 229 and Soni Lalji Jetha (deceased) through his LRs. v. Soni Kalidas Devchand and Ors., AIR (1967) SC 978: [1967] 1 SCR 974, relied on. L. Shankaran Laxmi and Ors. v. Adim Kunju, AIR (1965) Ker 132 and K. Gopalan Thanthri v. Ittira Kelan and Ors., AIR (1970) Ker 305 (FB), referred to. 2. In the suit for recovery of money, decree passed therein and execution proceedings and auction sale did not relate to mortgage dues but an independent transaction and a separate pro-note and recovery of that amount. In such suit, respondent was neither necessary nor proper party and non-joinder of plaintiff was of no consequence. Further, in execution of money-decree in that suit, defendant no.1 purchased the property with the leave of the court and became the owner of the property and plaintiff had no right to raise an objection against the right of defendant no. 1. [117-c] Ramaswami Gounder v. Ramaswami Gounder (1974) 1 Mad LJ 350: 87 LW 454, referred to. 3. Regarding deemed discharge of debt under the Tamil Nadu Debt Relief Act, 1979, on auction-sale in favour of defendant no. 1 in 1966, she became the owner of the property or in any case, she was claiming to be in adverse possession of the suit property. After 1966, defendant no. 1 was not holding the property as mortgagee in possession. Hence, the provisions of the Act were not applicable and neither `A’ nor respondent – plaintiff could claim benefit of the said Act. [117-e] R. Sundaravaradan, R.N. Keshwani and Ramlal Roy for the Appellants. A.T.M. Sampath and Mrs. R. Meena Kumari for the Respondents.

"The Old Bailey, Known Also as the Centra...

Image via Wikipedia

CASE NO.:
Appeal (civil) 6544 of 1999

PETITIONER:
Rukmani Ammal and Anr.

RESPONDENT:
Jagdeesa Gounder

DATE OF JUDGMENT: 09/11/2005

BENCH:
Arijit Pasayat and C.K. Thakker

JUDGMENT:
JUDGMENT

C.K. THAKKER, J.

The present appeal is directed against the judgment and decree passed by
the High Court of Madras in Second Appeal No. 1939 of 1986. By the said
appeal, the High Court set aside the judgment and decree passed by the
Subordinate Judge, Tindivanam in Appeal No. 6 of 1983 which in turn set
aside the judgment and decree passed by District Munsif, Tindivanam in
Original Suit No. 63 of 1983.

To appreciate the controversy raised in the present Appeal, factual
background may be stated in brief:

The appellants herein were original defendants and respondent was the
original plaintiff. One Annamalai was the absolute owner of the property
bearing R.S. 81 situated at village Peravur in Taluka Tindivanam,
admeasuring 1 acre and 52 cents (hereinafter referred to as the `suit
property'). Annamalai mortgaged the said property by a usufructuary
mortgage to defendant No. 1 Rukmani Ammal by a document Ex. B-5 dated June
27, 1962 to secure repayment of Rs. 400 on a pro-note. Defendant No. 1 was
put in possession of the property. Annamalai had also taken another loan
from Rukmani Ammal on another pro-note executed by him. On August 13, 1964,
Annamalai sold 67 cents from the suit property to plaintiff-Jagdesa by a
registered sale-deed Ex. A-1 for Rs. 800/-. There was a recital in the
sale-deed that the defendant No. 1 was in possession of property as a
mortgagee and the plaintiff had thus purchased the equity of redemption
from Annamalai. Since the defendant No. 1 was not repaid the amount of
another loan under pro-note, she instituted a money suit being Small Cause
Suit No. 176 of 1965 wherein a decree was passed. The suit-property was put
up for sale in execution of money decree. The auction took place on August
3, 1966. The defendant No. 1 purchased the property with the leave of the
Court. Sale was confirmed on September 5, 1966 and sales certificate Ex.
B-7 was issued in her favour, and she took delivery of possession through
Court on January 18, 1967. The property was subsequently sold by Rukmani
Ammal (Defendant No. 1) to Krishna Gounder (Defendant No. 2) on August 16,
1979 by a sale-deed, Ex. B-19.

On March 1, 1980, the plaintiff issued a notice to defendant No. 1 asking
her to hand over possession of 67 cents from the property to the plaintiff
but the defendant No. 1 refused to do so. The plaintiff, therefore, filed a
suit on June 6, 1980 for declaration of title and also for possession of
property. It was alleged by the plaintiff that defendant No. 1 was
mortgagee in possession of the property and since the mortgage was
usufructuary one and the defendant No. 1 was in possession for a continuous
period of ten years, the mortgage was deemed to be discharged under the
Tamil Nadu Debt Relief Act, 1979 and defendant No. 1 was bound to deliver
possession of the property to the plaintiff. It was also alleged by the
plaintiff that he was not aware of Small Cause Suit No. 176 of 1965 by
defendant No. 1 nor the decree passed in the said suit and attachment and
sale of property; that the Court auction was illegal and invalid as no
notice was issued to the plaintiff before undertaking auction sale nor an
opportunity was afforded to him. The auction, therefore, would not bind him
as it was fraudulent. A prayer was accordingly made to declare auction sale
invalid and to put plaintiff in possession of the property. According to
the plaintiff, he purchased 0.67 cents out of 1 acre, 52 cents of the suit
property and had become owner of that portion.

The suit was resisted by defendant No. 1, inter alia, contending that it
was not maintainable inasmuch as the plaintiff ought to have instituted a
suit for redemption of mortgage and not for declaration of title. It was
also contended that a decree was passed in favour of defendant No. 1 in the
previous suit and in execution of the said decree, the property was sold in
public auction and after obtaining leave of the Court, the defendant No. 1
purchased the property and had become full and absolute owner thereof. She
further contended that the debtor was not entitled to any benefit under the
Tamil Nadu Debt Relief Act. In any case, after the auction sale and
confirmation thereof by a Court, her possession of property was as owner of
the property and thus, she was in adverse possession. She had become owner
as she had acquired title by adverse possession and the suit filed by the
plaintiff was barred by limitation. It was also stated that the sale in
favour of defendant No. 1 was confirmed by a competent Court of law. The
defendant No. 1 had also sold the property to defendant No. 2 on August 16,
1979 under the sale-deed, Ex. B-19 and thereafter the suit of the plaintiff
against her was not maintainable and was liable to be dismissed. Defendant
No. 2 remained ex-parte.

The trial Court, on the basis of allegations and counter allegations of the
parties, framed necessary issues and by judgment and decree, dated November
18, 1982, held that the claim put forward by the plaintiff was well founded
and he was entitled to a decree for possession as prayed by him to the
extent of 67 cents. The Court observed that defendant No. 1 was in
possession only as a mortgagee of the property and even after auction sale
by the Court, she continued to remain in possession as the mortgagee and
could not get title by adverse possession. The trial court also held that
as defendant No. 1 was in possession of property since more than ten years,
the mortgage was statutorily discharged and the defendant No. 1 was bound
to hand over possession of the property to the mortgagor. As the plaintiff
had purchased 67 cents in R.S. 81, he was the absolute owner and was
entitled to that portion of the property. Accordingly, relief was granted
in favour of the plaintiff.

Being aggrieved by the decree passed by the trial Court, the defendant No.
1 preferred an appeal in the Court of the Subordinate Judge, Tindivanam.
The lower Appellate Court held that it was no doubt true that Annamalai was
the owner and mortgagor of the property and defendant No. 1 was in
possession as a mortgagee of the suit property. The Court, however, held
that after the auction sale by the Court on August 3, 1966 and confirmation
of sale and grant of sale certificate in favour of defendant No. 1 on
September 5, 1966, she no more continued to be mortgagee in possession and
her title was adverse to the mortgagor. Her possession was thereafter
adverse possession so far as the owner was concerned. In the circumstances,
relying on a decision of this Court in Soni Lalji Jetha (deceased) through
his LRs v. Soni Kalidas Devchand & Ors., AIR (1967) SC 978 : [1967] 1 SCR
974, the Court held that the defendant No. 1 had become owner by adverse
possession and the suit filed by the plaintiff was not maintainable. The
Court also held that the suit ought to have been filed under Order 34 of
the Code of Civil Procedure, 1908 for redemption of mortgage and not for
declaration of title and possession of mortgage-property. According to the
appellate Court, the suit filed by the defendant No. 1 against Annamalai
was for recovery of money and the plaintiff-Jagdesa was not necessary party
to the said suit and the decree passed in that suit and sale of the suit-
property in execution was binding to the plaintiff also. Accordingly, the
appeal was allowed. Judgment and decree passed by the trial Court was
reversed and the suit filed by the plaintiff was dismissed.

The plaintiff was aggrieved by the decree of the lower Appellate Court and
filed Second Appeal in the High Court of Madras. The High Court, relying on
the fact that the defendant No. 1 was only mortgagee in possession and the
mortgagor was entitled to redeem the mortgage, held that defendant No. 1
continued to be a mortgagee only and she would not become owner of the
property by adverse possession. Therefore, according to the High Court, the
trial Court was right in passing decree in favour of the plaintiff for
title and possession of the property and the lower Appellate Court
committed an error in allowing the appeal and setting aside the decree. The
High Court also held that the decree passed in favour of defendant No. 1 in
Small Cause Suit was not binding to the plaintiff as he was not joined as a
party defendant in that suit. The High Court, therefore, allowed the appeal
and decreed the suit of the plaintiff.

The appellants-defendants have challenged the decree passed by the High
Court in the present appeal.

We have heard learned counsel for the parties. Learned counsel for the
appellants contended that the High Court committed an error of law in
holding that the suit filed by the plaintiff for declaration of title and
possession of property was maintainable. According to the learned counsel,
the plaintiff ought to have filed a suit for redemption under Order XXXIV
of the Code of Civil Procedure, 1908. He, having purchased equity of
redemption, could not have filed a suit for declaration and possession of
mortgage property but for redemption of mortgage. The counsel also
contended that the High Court was not right in holding that defendant No. 1
had not become owner of the property by adverse possession since she was a
mortgagee of the suit property. Once the mortgagee purchased the property
in execution proceedings and in auction-sale with leave of the Court, she
had become owner of such property. Sale was confirmed and sale certificate
was issued in favour of defendant No. 1. Even if it is assumed that the
title of the mortgagee was defective, the status of the defendant No. 1 was
changed from mortgagee into a person claiming ownership of property and the
suit filed by the plaintiff was barred by the law of limitation. It was
also submitted that the High Court was wrong in holding that the decree
passed in Small Cause Suit was of no effect as the plaintiff was not joined
as defendant in that suit. The learned counsel for the appellants,
therefore, submitted that the appeal deserves to be allowed by confirming
the judgment and decree of the lower Appellate Court and by dismissing the
suit filed by the plaintiff.

The learned counsel for the respondent-plaintiff, on the other hand,
supported the decree passed by the trial Court and confirmed by the High
Court. He submitted that defendant No. 1 was mortgagee in possession and as
the sale in favour of the plaintiff was in accordance with law, defendant
No.1 continued to be mortgagee in possession. The counsel submitted that it
is settled law that "once a mortgage, always a mortgage". It was,
therefore, open to the mortgagor or a person claiming through such
mortgagor to redeem the property. Since the plaintiff was claiming the
right and title of the mortgagor, it was open to him to file a suit for
declaration and possession of the property to the extent of 67 cents and by
passing a decree in favour of plaintiff, no illegality had been committed
by the trial Court. As the lower Appellate Court had committed an error in
setting aside the said decree, the High Court was right in correcting the
error and in restoring the decree of the Trial Court. He, therefore,
submitted that the appeal deserves to be dismissed.

Having heard the learned counsel for the parties and having considered the
relevant provisions of law in the light of decisions cited before us, in
our view, the appeal deserves to be allowed by setting aside the decree
passed by the trial Court and confirmed by the High Court and by restoring
the decree of the first Appellate Court.

From the facts, it is clear and is not disputed before us that Annamalai
was the original owner of the property who mortgaged it to defendant No. 1.
Thus, Annamalai was mortgagor and Rukmani Ammal-defendant No. 1 was
mortgagee. Since it was an usufructuary mortgage, defendant No. 1 was put
in possession of the property as mortgagee. It was in June, 1962. It is
also not in dispute that defendant No. 1 had advanced another loan on a
different pro-note to Annamalai. Annamalai sold part of the property to the
present plaintiff on August 13, 1964 when the property was in possession of
defendant No. 1 as mortgagee. It has come on record that since the amount
under separate pro-note was not repaid by Annamalai to defendant No. 1, the
latter filed Small Cause Suit for recovery of money due and a decree was
passed against Annamalai by a competent court. In execution proceedings,
the suit property was sold by the Court in public auction and defendant No.
1, with the permission of the Court, purchased it on August 3, 1966.
Auction was confirmed and sale certificate was issued in favour of
defendant No. 1 on September 5, 1966. It is, therefore, clear that
according to defendant No. 1, he became absolute owner of the property in
view of purchase of property in Court auction by her as the sale was
confirmed and sale certificate was issued. In our opinion, the learned
counsel for defendant No. 1 is right in contending that when Annamalai sold
part of the suit property to the plaintiff in 1964, the property was
already mortgaged to defendant No. 1 who was in possession of the property.
Defendant No. 1 is, therefore, right in submitting that the plaintiff ought
to have filed a suit for redemption of mortgage and not for declaration of
title and possession of property. The learned counsel for defendant No. 1
is also right in submitting that once the property was sold to defendant
No. 1 who was mortgagee in possession, she could not be continued as
mortgagee inasmuch as after the sale, she was claiming the property as an
owner thereof. Her status as mortgagee came to an end with the purchase of
property and in the eye of law, it could be said that she was claiming
title over the property which was adverse to the owner of the property. In
this connection, our attention was invited by the learned counsel to few
decisions:

In Padma Vithoba Chakkkayya v. Mohammed Multani & Anr. AIR (1963) SC 70 :
[1963] 2 SCR 229, this Court held that once a person gets possession of
property as mortgagee, he cannot by a unilateral act or declaration claim a
title over the property by adverse possession against the mortgagor since
in law his possession is that of the mortgagor. But if mortgagor and
mortgagee subsequently enter into a transaction under which the mortgagee
is to hold the property thereafter not as a mortgagee but as owner, that
would be sufficient to start adverse possession against the mortgagor even
if the transaction is for any reason inoperative under the law.

The Court stated:

 "On the finding reached above that the first defendant entered into
 possession of the properties as usufructuary mortgagee in 1916, the
 question is what are the rights of the appellant. On the basis of
 the sale deed by the second defendant in favour of Rajanna, he
 would be entitled to redeem the mortgage. But the present suit is
 not one for redemption of the mortgage but for ejectment and that
 by itself would be a ground for dismissal of the suit. But in view
 of the fact that this litigation had long been pending, we consider
 it desirable to decide the rights of the parties on the footing
 that it is a suit to redeem the usufructuary mortgage, without
 driving the parties to a separate action. We have now to consider
 the defence of the first defendant to the suit, treating it as one
 for redemption. Now the contention of Mr. Ranganathan Chetty for
 the respondent is that he had been in possession of the properties
 as owner ever since 1923, when the second defendant sold them to
 him, that he had thereby acquired a prescriptive title to them, and
 that the right of the appellant to redeem was thereby extinguished.
 It is not disputed that when a person gets into possession of
 properties as mortgagee, he cannot by any unilateral act or
 declaration of his prescribe for a title by adverse possession
 against the mortgagor, because in law his possession is that of the
 mortgagor. But what is contended is that if the mortgagor and
 mortgagee subsequently enter into a transaction under which the
 mortgagee is to hold the properties thereafter not as a mortgagee
 but as owner that would be sufficient to start adverse possession
 against the mortgagor if the transaction is for any reason
 inoperative under the law. This contention, in our opinion, is well
 founded. Though there was at one time a body of judicial opinion
 that when a person enters into possession as a mortgagee he cannot
 under any circumstances acquire a title by prescription against the
 owner, the law is now fairly well settled that he can do so where
 there is a change in the character of his possession under an
 agreement with the owner, vide Karnam Kanda Sami v. Chinnabba, AIR
 (1921) Mad. 82)." (emphasis supplied)

A similar question came up for consideration in Soni Lalji Jetha. There it
was held by this Court that a mortgagee in possession under the terms of
mortgage cannot, by merely asserting rights of ownership in the mortgage
property, convert his possession as mortgagee into possession hostile to
the mortgagor. But the mortgagor can sell the mortgage property to his
mortgagee and thereby put the mortgagee's estate to an end and thereafter
all the right, title and interest in the property would vest in the
mortgagee. Such a sale would be valid and binding and thereafter the
character of possession as a mortgagee would be converted into possession
as an absolute owner. Even if such a sale is held to be voidable and not
binding on a subsequent purchaser, the character of possession based on
assertion of absolute ownership by the mortgagee does not alter, and if
such possession continues throughout the statutory period it ripens into a
title to the property.

The Court in the circumstances stated:

 "It is true that as mortgagees-in-possession Kanji and Lalji
 derived their title to possession through the mortgagors and by
 virtue of their rights under the said mortgage. They were entitled,
 therefore, to continue to be in possession under the said mortgage
 and so long as it subsisted. By merely asserting rights of
 ownership in the said shops they could not convert their possession
 as mortgagees and unilaterally alter their lawful possession as
 mortgagees into possession hostile to the mortgagors. But it is a
 well settled proposition that a mortgagor can sell the mortgaged
 property to his mortgagee and thus put the mortgage's estate to an
 end and thereafter all the right, title and interest in the
 property would vest in the mortgagee. Such a sale would be valid
 and binding as between them and thereafter the character of
 possession as a mortgagee would be converted into possession as an
 absolute owner. Even if such a sale is held to be voidable and not
 binding on a subsequent purchaser the character of possession based
 on assertion of absolute ownership by the mortgagee does not alter,
 and if that possession continues throughout the statutory period it
 ripens into a title to the property." (emphasis supplied)

In L. Shankaran Laxmi & Ors. v. Adim Kunju, AIR (1965) Ker 132, a Division
Bench of the High Court of Kerala held that once a mortgagee purchases the
property in execution proceedings, he claims to be the owner of the
property and does not remain to be mortgagee. The Court stated that unless
there is a default in performance of some obligation by the mortgagee, the
purchased by mortgagee in execution of decree with the leave of the Court
makes him the owner of the property.

In K. Gopalan Thanthri v. Ittira Kelan & Ors., AIR (1970) Ker 305 (FB), it
was held by the Full Bench of the High Court of Kerala that after the sale
of mortgage property in favour of mortgagee, possession of mortgagee
becomes adverse to tarwad and if a suit for redemption is not filed within
the stipulated period of twelve years, it would become barred by
limitation.

In the case in hand, Annamalai was the owner of the property. He mortgaged
it to defendant No. 1 in 1962 and since then defendant No. 1 was in
possession of the property as mortgagee. Annamalai then sold part of the
property to the plaintiff in 1964 and the sale-deed recited the factum of
mortgage by the owner to defendant No. 1. In a suit for recovery of money
by defendant No. 1 against Annamalai, a decree was passed and in execution
proceedings, the property was purchased by the mortgagee (defendant No. 1)
in 1966. The auction was confirmed and sale certificate was issued in
favour of defendant No. 1 on September 5, 1966. The submission of defendant
No. 1 is well founded that thereafter she did not continue to remain
mortgagee but became absolute owner or claimed to be the absolute owner of
the property. As held by this Court in the cases referred to hereinabove,
once the mortgagee is claiming to be an absolute owner of the property,
his/her status as mortgagee comes to an end and his/her possession becomes
adverse to the original owner. Even if such sale is voidable (and not
void), it will not alter legal position and adverse title of the original
mortgagee continues and if the period of twelve years expires, he/she
becomes owner of the property by adverse possession.

In the case on hand, the auction took place on August 3, 1966 and the sale
was confirmed and sale certificate was issued in favour of defendant No. 1
on September 5, 1966. Admittedly, the suit was filed by the plaintiff on
June 26, 1980, that is, after a period of twelve years. In the
circumstances, in our opinion, the lower Appellate Court was right in
dismissing the suit. It was barred under Article 61 of the Limitation Act,
1963. The lower Appellate Court, in our opinion, was also right in
observing that since the plaintiff was claiming through Annamalai (original
owner), he ought to have filed a suit for redemption of mortgage and not
for declaration and possession of the property. Such suit was not
maintainable as held by this Court in Padma Vithoba.

Though the trial court as well as the High Court, relying upon an earlier
decision in Ramaswami Gounder v. Ramaswami Gounder, (1974) 1 Mad LJ 350 :
87 LW 454 held that failure of defendant No. 1 in impleading the plaintiff
in previous suit was fatal and the decree passed in favour of defendant No.
1 against Annamalai could not bind the plaintiff and hence, auction sale in
favour of defendant No. 1 could not adversely affect the rights of the
plaintiff, in our opinion, the lower Appellate Court was right in
distinguishing the said case. In that case, suit was instituted by the
mortgagee for recovery of money due under the mortgage and got a decree in
his favour. The Court, therefore, held that when the mortgagor had sold the
property to a third party and the mortgagee in the suit did not implead
such purchaser as party-defendant, the decree in favour of the mortgagee
would not bind the purchaser and his right of redemption would not get
adversely affected.

In this case, the Small Cause Suit, decree passed therein and execution
proceedings and auction sale did not relate to mortgage dues but an
independent transaction and a separate pro-note and recovery of that
amount. In such suit, plaintiff-Jagdesa was neither necessary nor proper
party and non-joinder of Jagdesa was of no consequence. As in execution of
money-decree in that suit, defendant No. 1 purchased the property with the
leave of the Court, she became the owner of the property and plaintiff-
Jagdesa had no right to raise an objection against the right of defendant
No. 1.

Regarding deemed discharge of debt under the Tamil Nadu Debt Relief Act, it
may be stated that as held by us, after 1966, defendant No. 1 was not
holding the property as mortgagee in possession. On auction-sale in her
favour, she became the owner of the property or in any case, she was
claiming to be in adverse possession of the suit property. As her
possession after 1966 was not as mortgagee in possession, the provisions of
the above Act were not applicable and neither Annamalai nor plaintiff could
claim benefit of the said Act.On all the above grounds, in our opinion, the trial Court as well as the
High Court were in error in passing decree in favour of the plaintiff. The
appeal, therefore, deserves to be allowed and is accordingly allowed. The
decree passed by the trial Court and by the High Court is set aside and the
decree passed by the lower Appellate Court is restored and the suit filed
by the plaintiff is ordered to be dismissed, however, with no order as to
costs.

About advocatemmmohan

ADVOCATE

Blog Stats

  • 2,897,107 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,907 other followers
Follow advocatemmmohan on WordPress.com
%d bloggers like this: