Full Judgment Text
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PETITIONER:
HARBANS SINGH ETC.
Vs.
RESPONDENT:
GURAN DITTA SINGH ETC.
DATE OF JUDGMENT20/02/1991
BENCH:
RAMASWAMY, K.
BENCH:
RAMASWAMY, K.
KASLIWAL, N.M. (J)
CITATION:
1991 SCR (1) 614 1991 SCC (2) 523
JT 1991 (2) 138 1991 SCALE (1)345
ACT:
Redemption of Mortgages (Punjab) Act 2 of 1913-Sections
4, 12 and 13-Application for redemption dismissed-Whether
mortgagor’s right of redemption barred-Whether suit for
redemption under section 60-Transfer of Property Act
maintainable and civil court has jurisdiction.
HEADNOTE:
Kala Singh predecessor of the respondents executed
three mortgages hypothecating agricultural lands in favour
of the appellants. The mortgagor filed an application under
Section 4 of the Redemption of Mortgages (Punjab) Act 2 of
1913 and sought redemption of the mortgages, by paying Rs.10
in respect of each of the mortgage. The parties
compromised regarding the amount payable and the Collector
passed the order on compromise under Section 11 of the Act
on Feb. 3, 1964. The mortgagor having committed default in
making the payment within the time allowed for the purpose,
the petitions were dismissed by the Collector. Thereupon
the mortgagor filed three separate suits against each
mortgagee for redemption within one year under Section 12
of the Act on June 12, 1964 and during the pendency of the
suits, he having died the suits were dismissed. The
respondents after obtaining mutation of their names in the
revenue records, filed separate suits for redemption of the
mortgages but beyond one year as contemplated under section
12 read with Art.14 of the Limitation Act 1908. The suits
were dismissed by the trial court; which order was later
affirmed both by the first appellate Court as also by the
High Court. On a further appeal under the Letter Patent
Act, the Division Bench of the High Court allowed the
appeals and set aside the judgments and Decrees of the
courts below and granted decree of redemption holding that
the suits were not barred by limitation. The appellants
have thus filed these appeals after obtaining special leave.
The appellants have reiterated their contention amongst
others that the suits were barred by limitation and further
the High Court was not right in applying the provisions of
Section 60 of the Transfer of Property Act.
Dismissing the appeals this Court,
615
HELD: Section 13 creates a bar to make any further
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petition under the Act by the mortgagor or his successor in
interest. A reading of Section 12 clearly postulates that
the aggrieved party, be it mortgagor or mortgagee, against
an order made under ss. 6 to 11 is empowered to institute a
suit to establish his right in respect of the mortgage.
Subject to the result of the suit, the order passed by the
Collector shall be conclusive. Article 14 of the Limitation
Act, 1908 which is equivalent to Article 100 of the
Limitation Act, 1963, prescribes limitation of one year from
the date of the decision or the order of the officer of the
Government in his official capacity. Article 61 of the
present Limitation Act provides 30 years for redemption and
recovery of the possession of the hypotheca. The limitation
of 30 years runs from the date when the right to redemption
or posession accrues. Articles 105, 134 and 145 of the old
Limitation Act would apply to the present litigation and the
limitation is 60 years.(619A-C)
The creation of mortgage is an act intervivos and not a
statutory or common law right. The Act accords summary
remedy and the default of compliance entails with dismissal
of the application and section 13 prohibits second
application for the self same relief. The remedy of civil
suit for redemption available at common law, subject to
limitation, is not taken away. Civil suit is not a
declaratory suit, but one to redeem the mortgage and to
recover possession of mortgage property. [621B-C]
In the instant case, applying the principle of Justice,
Equity and Good conscience though section 60 of the Transfer
of Property Act, per se, did not apply, the principles in
section 60 would apply. [622G]
Though the application for redemption was dismissed
under section 11 of the Act and and became conclusive under
section 12, the mortgagor’s right to redemption is not
barred. A suit for redemption under section 60 of the
Transfer of Property Act will be maintainable and civil
court has jurisdiction to grant the decree of redemption.
[622G]
The suits for redemption are admittedly within
limitation either under the old Limitation or under the new
Limitation Act. The bar of section 12 of the Act does not
oust the jurisdiction of the civil court to entertain and
grant decree of redemption. [623B]
Raghunath Singh & Ors. v. Mt. Hansraj Kanwar and Ors.
A.I.R. 1934 P.C. 205; Tulsi Dass @ Nirmal Das Ors., v. diala
Ram AIR 1943.
616
Lah. 176; Sheo Lal & Ors. v. Sultan and Ors. [1970] 2 SCR
405; Mussammat Bhagwan Devi v. Mussammat Bunyadi Khanum
[1902] Punjab Record 348; Safdar Ali v. Ghulam Mohi-ud-din
Ors., [1915] (1) Punjab Record 406; Mian Nizam & Din
Mohammed v. Lala Ramsukh Das, AIR 1938 Lah. 286; Milkha
Singh v. Mst. Shankari & Ors., AIR (34) Lahore 1;Ms. Ram
Gopal Dula Singh v. Sardar Gurbux Singh Jiwan Singh and
Ors., AIR 1955 Punjab 215; Atma Singh & Gian Singh v. Mangal
Singh and Ors., ILR 1957 Jan.-June (Vol. 10) 79; Ganesh Lal
v. Jyoti Pershad, [1953] SCC 243, Suryanarayan v. Sri
ramulu, [1913] (25) M L.J.P.16;-Referred to.
Gangu & Ors., v. Maharaj Das & Ors., ILR 15 Lahore 380;
Kaura v. Ram Chand, [1925] ILR 6, Lah.206-Distinguished.
Bhagat Ram & Ors. v. Jamna Ram and Ors., [1928] 114 I.C.
447-Not approved.
JUDGMENT:
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CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 12224
of 1975.
From the Judgment and Orders dated 9.4.1974 of the
Punjab & Haryana High Court in L.P.A. Nos. 213,214 and 215
of 1973.
S.K. Mehta, Dhruv Mehta and Aman Vachher, for the
Appellants.
K.C. Dua for the Respondents.
The Judgment of the Court was delivered by
K. RAMASWAMY, J. The appellants are mortgagees. The
respondents are the heirs of Kala Singh, the mortgagor.
Kala Singh executed three mortgages in favour of the
appellants Resham Singh, Jaswant Singh and Harbans Singh on
September 17, 1962, June 17, 1961 and May 31, 1962
respectively hypothecating the agricultural lands of 16
kanals 16 marlas in each of the first two mortgages and 16
kanals in the third mortgage. The mortgagor filed an
application under Sec. 4 of the Redemption of Mortgages
(Punjab) Act, 2 of 1913, for short ’the Act’. He deposited
a sum of Rs.10 in each mortgage and sought redemption of the
mortgages. Ultimately the parties compromised and the
mortgagor agreed to pay the balance of Rs.340 to each
mortgagee within a month from May 1, 1964. The Collector
passed the order on compromise under s.11 thereof on
February 3, 1964. He committed default in the payment
thereof. The petitions were dismis-
617
sed. He filed separate suits against each mortgagee for
redemption within one year under Sec. 12 of the Act on June
12, 1964. Pending suits he died. Thereafter the suits were
dismissed. After obtaining mutation of their names in the
revenue records the respondents filed separate suits for
redemption of the mortgages, but beyond one year as
contemplated under Sec. 12 read with Art. 14 of the
Limitation Act, 1903. The suits were dismissed by the Trial
Court and were confirmed by the First Appellate Court and by
the High Court in Second Appeals. But the Division Bench
under Clause (10) of the Letter of Patent allowed the
appeals and set aside the Judgments and Decrees of the
courts below and granted decree of redemption in terms of
the prayer by Judgment dated April 9, 1974. Assailing the
legality thereof the appeals have been filed after obtaining
leave under the Art. 136 of the Constitution. Since common
questions of facts and law arise for decision in these
appeals, they are disposed of by a common judgment.
The only question that was argued before the High Court
and reiterated in this Court is whether the suits are barred
by limitation. The contention of Shri Mehta, the learned
counsel for the appellants is that the order passed by the
Collector under Sec. 12 of the Act is conclusive between the
parties unless the suits are laid under Art. 14 of the
Limitation Act within one year from the date of the Order.
Admittedly, the present suits have been filed beyond such
limitation of one year. The High Court committed a grave
error of law in applying the provisions of Sec. 60 of the
Transfer of property Act and the ratio of the Privy council
in Raghunath Singh & Ors. v. MT. Hansraj Kanwar & Ors.,
A.I.R. 1934 P.C. 205. He contends that the Act provides a
right and remedy to the mortgagor and mortgagees. Section
12 of the Act makes the order conclusive and binding and
Sec. 13 bars second application in that regard unless the
suit is filed within one year from the date of the order.
It is not open to the Civil Court to go behind the order of
the Collector and enlarge the limitation provided under Art.
14 of the Limitation Act. All the provisions of Transfer of
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Property Act were not applicable to State of Punjab.
Certain Provisions relating to Sale-deeds and gifts were
made applicable to the State of Punjab with effect from
April 1, 1955 and to the area comprised in the erstwhile
Pepsu State, w.e.f. May 15, 1957. As on the date when the
suits were laid, s. 60 of Transfer of Property Act did not
apply to Punjab and so the ratio in Raghunath Singh’s case
(supra) is inapplicable. The High Court committed manifest
error in applying s.60. He cited decisions of Lahore High
Court in support of the contention that the suit shall be
laid within one year which we would advert to at a later
stage. Shri Dua, learned counsel for the respondents
contended that the High
618
Court is justified in holding that the suit is not barred
by limitation and the ratio of the decision cited by the
appellants cannot be applied.
The Act is a beneficial legislation giving right to the
mortgagors to seek redemption and restoration of possession
of the hypotheca in summary proceedings before the revenue
courts. The Act applied only to mortgage of land where the
principal money secured under the mortgage does not exceed
Rs. 5,000 and the hypotheca does not exceed 50 acres of
land. Section 4 gives right to the mortgagor and other
persons entitled to sue for redemption at any time after the
principal money becomes payable and before the suit for
redemption is barred, by presenting a petition to the
collector for a direction i.e. mortgage be redeemed and
erstwhile morgages shall put the mortgagor in possession of
the hypotheca, after following the procedure in that behalf.
Secs. 5 to 11 deal with the procedure. Under s. 11 if the
Collector, on an enquiry, forms an opinion that the sum is
rightly due under the mortgage, he shall, unless he
dismisses the petition under Sec. 10, make an order under
Sec.6. If the sum is found larger than the sum deposited,
the mortgagor shall deposit the amount with any further sum
that may be due on account of interest upto date of the
deposit; on making deposit within the period or extended
period not exceeding 30 days, thereafter, the Collector
shall make an order under Sec.6 thereto. On committing
default by the Mortgagor, the Collector shall dismiss the
petition. Section 6 provides the relief of redemption; of
restoration of possession to the martgagor; delivery of the
mortgage, deed and payment of the mortgage money to the
mortgagee. Section 12, which is material for the purpose of
this case, reads thus:
(1) "Saving of suits to establish rights-Any party
aggrieved by an order made under Section 6, 7, 8,
9, 10 or 11 of this Act may institute a suit to
establish his right in respect of the mortgage, but
subject to the result of such suit, if any, the
order shall be conclusive.
(2) Setting aside ex-parte orders or orders of
dismissal-Notwithstanding anything in this section
a mortgagee against whom an ex-parte order under
section 7 has been made or a petitioner, whose
petition has been dismissed in default under
section 6 may apply to the Collector to have such
order of dismissal set aside, and Collector may in
his discretion set aside such order of dismissal,
on such terms as to costs or otherwise as he may
deem fit; provided that the order of dismissal
shall not be set aside unless notice of
619
the application has been served on the opposite
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party."
Section 13 creates a bar to make any further petition
under the Act by the mortgagor or his successor in interest.
A reading of Sec. 12 clearly postulates that the aggrieved
party, be it mortgagor or mortgagee, against an order made
under ss. 6 to 11 is empowered to institute a suit to
establish his right in respect of the mortgage, subject to
the result of the suit the order passed by the Collector
shall be conclusive. Article 14 of the Limitation Act, 1908
which is equivalent to Art. 100 of the Limitation Act 1963,
prescribes limitation of one year from the date of the
decision or the order of the officer of the Government in
his official capacity. Article 61 of the present Limitation
Act provides 30 years for redemption and recovery of the
possession of the hypotheca. The limitation of 30 years
runs from the date when the right to redemption or
possession accrues. Articles 105, 134, and 145 of the Old
Limitation Act would apply to the present litigation and the
limitation is 60 years. In Tulsi Dass @ Nirmal Das & Ors.
v. Diala Ram, (2) AIR 1943 Lah. 176 a Full Bench for which
Tek Chand. J. wrote the leading judgment held at page 189
thus:
"The order of the Collector does not affect the
rights of the parties in any way; it is conclusive
to this extent only that the petition for summary
redemption has been dismissed and no other petition
under the Act would lie. No suit under s. 12 being
necessary or comptetent, there was no bar to the
mortgagor suing for redemption in the civil Courts
within the period allowed by law in ordinary
course. It must, therefore, be held that the
mortgagor’s suit in A.I.R. 1929 Lah. 513 was
rightly decreed and that the contrary conclusion
reached by the Single Bench in A.I.R. 1927 Lah. 461
and re-affirmed by the Division Bench in A.I.R.
1938 Lah. 638 that it is the form of the order of
the Collector which has to be seen and not the
substance of it, is erroneous.
This view was approved by this Court in Sheo Lal & Ors.
v. Sultan & Ors., [1970] 2 SCR 405 by a Bench of three
Judges. The facts were that the Collector did not decide
the dispute on merits, but rejected the application filed
under Sec. 4 of the Act holding that the application raised
complicated question of facts and law and thereby he
declined to exercise summary jurisdiction under the Act. On
institution of the suit the plea of limitation under Art.
14 of Old Limitation Act was raised which was upheld by the
Trial Court, but on
620
appeal the decree of redemption was granted and was
confirmed by the High Court in Second Appeal. The same
contention was reiterated before this Court. In that
context Shah, J. as he then was, speaking for the court,
held that it is not the form of the order of dismissal but
its substance will determine the application of the period
of limitation prescribed by Art. 14 of the Limitation Act.
An order relegating the mortgagor to a civil suit for
obtaining an order of redemption, event if becomes final,
does not bar a suit for redemption for it raises no cloud on
the title of the mortgagor arising out of the mortgage.
Such an order is not one which is required to be set aside.
An order required to be set aside is one which the officer
making it has jurisdiction to make it and has the effect of
barring the claim for relief unless it is set aside.
It is clear that an order passed by the Collector under
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ss. 6 to 11 is only conclusive for what was decided therein
and if the adjudication made by the Collector in summary
proceedings are sought to be reopened, certainly, unless the
order is got over, either by the martgagor or by the
mortgagee, or any person claiming right, title or interest
through them being an aggrieved person within the meaning of
Sec. 12, the order of the Collector binds the parties or the
persons claiming right, title or interest from the parties.
Take for instance, there is a dispute as in the present case
about the mortgage money before the Collector. Kala Singh
disputed the money secured of hypothecation but had
compromised and agreed to pay the amount mentioned in the
mortgages bond, namely, Rs.850-Rs. 10 in each of the
mortages disputed but in the suit filed within one year he
reiterated his original stand. Had the same stand been
taken by the respsondents disputing the mortgage money,
certainly it would not be open to the respondents as
successor in interest of the mortgagor to contend that the
money advanced under the mortgage was not Rs. 850, but
something less. That is not the case in the present suit.
They agreed to pay Rs. 850 as decided by the Collector and
sought redemption in the civil suit. Thereby they are not
seeking to set aside the order of the Collector, but they
are seeking redemption of the mortage. Take another
instance where the mortgagor disputed the execution or
validity of the mortgage, bond itself and the finding was
recorded against the mortgagee, i.e. the mortgage bond was
not either executed or is void for being vitiated by fraud,
coercion or undue influence, etc. The mortgagor
successfully avoided the mortgage by a specific order passed
by the Collector under the relevant provisions of the Act.
If no suit was filed within a period of one year, the
findings of the Collector become conclusive between the
mortgagee and the mortgagor and it is not open to assail the
order of the Collector after one year in a suit of
621
foreclosure or sale by the mortgagee. Therefore, what was
prohibited by Sec. 12 is only the substance of the order and
not the form.
Once a mortgage always a mortgage and gets extinguished
by payment of mortgage money by the mortgagor or decree of
redemption is passed and satisfied. The creation of
mortgage is an act intervivos and not a statutory or common
law right. The Act accords summary remedy and the default
of compliance entails with dismissal of the application and
s. 13 prohibits second applications for the self same
relief. The remedy of civil suit for redemption available
at common law, subject to limitation, is not taken away.
Civil suit is not a declaratory suit, but one to redeem the
mortgage and to recover possession of mortgaged property.
The question then is whether the respondents are
entitled to redemption of the mortgage. Section 60 of the
Transfer of Property Act, 1882 gives right to redemption of
the mortgage by instituting a suit for redemption of the
mortgage property. But as seen, at the relevant time
section 6D was not made applicable to Punjab. In Mussammat
Bhagwan Devi v. Mussammat Bunyadi Khanum, [1902] Punjab
Record 348 the Division Bench held that although the
Transfer of Property Act and the Indian Easement Act are not
in force in Punjab, the Punjab Courts when deciding cases in
which principles of law dealt with by the provisions of
those Acts are involved, may adopt those provisions as
embodying law applicable to the case especially when the law
enunciated therein coincides with the principles of equity,
good conscience and justice for which there is no statutory
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law applicable to the Punjab. In that it was held that the
mortgagor in possession had no authority, without the
consent of the mortgagee, to do an act which was likely to
prove destructive or permanently injurious to the property
mortgaged. In Safdar Ali. v. Ghulam Mohi-ud-din & Ors.,
[1915] 1 Punjab Record 406 the Full Bench was to consider
whether Doctrine of Clogging would apply when the Transfer
of Property Act was not made applicable to Punjab. The Full
Bench held that though the Doctrine of Clogging, in terms
does not apply in Punjab, when there is no statutory
prohibition, governing the matter be restricted to case
where something unconscionable or oppressive in the bargain
calls for redress. In terms the Full Bench applied the
Principles in the provisions of the Transfer of Property Act
consistent with the Doctrine of Justice, Equity and Good
Conscience. In Mian Nizam & Din Mohammad v. Lala Ram Sukh
Das, AIR 1938 Lahore 286 the right of prior mortgagee
purchasing property mortgaged to him be deemed to keep alive
for his benefit as against subsequent mort-
622
gagee. It was held that the principles contained in s. 101
of Transfer of Property Act would be applicable and applied.
In Milkha Singh v. Mst. Shankari & Ors., AIR (34) Lahore 1 a
Full Bench of five Judges applied the Doctrine of Part
Performance under s. 53A of the Transfer of Property Act as
a defence. It was further held that s. 53A is based on
equitable principles which were previously applicable to
whole of India, though the Transfer of Property Act per se
was not applied to Punjab. In M/s Ram Gopal Dula Singh v.
Sardar Gurbux singh Jiwan Singh & Ors., AIR 1955 Punjab 215
Kapur, J., as he then was speaking for the Division Bench,
held that though s. 6 of the Transfer of Property Act is not
applicable to Punjab, the right to expectancy may not be
transferred. It was further held that in Punjab and Lahore
there is no disagreement as to Principles of Transfer of
Property Act being applicable to Punjab because they are
based on Justice, Equity and Good-conscience. This view was
again reiterated in Atma Singh & Gian Singh v. Mangal Singh
& Ors., I.L.R.1957 Jan. -June (Vol.10) 79 and applied ss.
58, 92 and 100, Doctrine of Subrogation, but excluded the
applicability of the technical rules. This Court in Ganeshi
Lal v. Jyoti Pershad, [1953] SCC 243 held that though the
Transfer of Property Act 1882 does not apply to Punjab, the
priciple of equity, justice and good conscience would apply
to Punjab. If one of the several mortgagor redeems the
entire mortage by paying a sum less than the full amount
due under the mortgage, he is entitled to receive from his
co-mortgagors only their proportionate shares on the amount
actually paid by him. He is not entitled to claim their
proportionate shares on the amount which was due to the
mortages under terms of the mortgage on the date of
redemption. The same principle laid down in Suryanarayan v.
Sriramulu, [1913] 25 M.L.J. p. 16 was referred to with
approval in Ganeshi Lal’s case. Though in Ganeshi Lal’s
case the entire claim under the suit for contribution was
not decreed, the provision of Transfer of Property Act were
applied, on the Principles of equity, justice and good
conscience and granted degree pro rata.
We hold that applying the principle of Justice, Equity
and Good Conscience though s. 60 of the Transfer of Property
Act per se did not apply, the principles in s. 60 would
apply. Though the application for redemption was dismissed
under s.11 of the Act and became conclusive under s. 12 the
mortgagor’s right to redemption is not barred. A suit for
redemption under s. 60 of Transfer of Property Act will be
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maintainable and civil court has jurisdiction to grant the
decree of redemption.
In Gangu & Ors., v. Maharaj Das & Ors., I.L.R. 15
Lahore 380 a
623
Full Bench following Kaura v. Ram Chand [1925] I.L.R. 6 Lah.
206 held that unless the order of the Collector be
challenged within one year the civil court has no
jurisdiction to entertain the suit. In this case the right
to redemption of mortgage itself was barred by limitation.
Therefore, the ratio does not apply. Though the ratio in
Bhagat Ram & Ors. v. Jamna Ram & Ors. [1928] 114 I.C. 447 is
in favour of the appellants, in our view the ratio therein
is not good law. Thus we hold that the suits for redemption
are admittedly within limitation either under the Old
Limitation or under the new Limitation Act. The bar of Sec.
12 of the Act does not oust the jurisdiction of the civil
Court to entertain and grant decree of redemption.
The appeals are accordingly dismissed, but in the
circumstances parties are directed to bear their own costs
throughout.
Y.L. Appeal dismissed.
624