Shri Ram Prakash And 3 Others vs Smt. Asha Johri And 3 Others
- Court
- Allahabad High Court
A.F.R.
Reserved on 27.02.2026
Delivered on 01.07.2026
HIGH COURT OF JUDICATURE AT ALLAHABAD
MATTERS UNDER ARTICLE 227 No. - 5549 of 2019
Shri Ram Prakash and 3 others
…..Petitioner(s)
Versus
Smt. Asha Johri and 3 others
…..Respondent(s)
Counsel for Petitioner(s) : Kiran Kumar Arora
Counsel for Respondent(s) : Ajay Singh, Bhanu Bhushan Jauhari,
Rishi Bhushan Jauhari
Court No. - 33
HON'BLE MANISH KUMAR NIGAM, J.
1. Heard Shri Kiran Kumar Arora, learned counsel for the
petitioners, Shri Bhanu Bhushan Jauhari, learned counsel for the
respondents and perused the record.
2. This petition has been filed challenging the order dated
13.10.2017 passed by Civil Judge (Junior Division), Bareilly in
Original Suit No. 35 of 2016, (Asha Johri and others v. Ram
Prakash and others) dismissing the application filed by the
defendants under Order VII Rule 11 C.P.C. and also the order
dated 08.05.2019 passed by Additional District Judge, Court No.
9, Bareilly in Civil Revision No. 117 of 2017 Ram Prakash and
others v. Asha Johri and others dismissing the revision filed by the
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defendants/revisionists against the judgment and order dated
13.10.2017 passed by the Civil Judge (Junior Division) Bareilly.
3. Brief facts of the case are that in the year 1978, one Jagdish
Prasad husband of respondent no. 1/plaintiff, mortgaged house
bearing No. 333, situate at Mohalla Kunwapur, Bareilly ad-
measuring 168.81 sq. meters in favour of the petitioner nos. 1 to 4.
4. The mortgage deed in question was for securing a debt of Rs.
15,000/- given to Jagdish Prasad Johri executant of the mortgage
deed and in lieu thereof the house in dispute was mortgaged and
the petitioners were put in possession over the house in dispute. It
was also settled that the rent of the house will be adjusted towards
interest on the sum advanced and the period of mortgage was four
years. It was also provided in the mortgage deed that till the entire
debt amount is paid, the property will remain in possession of the
petitioners and Jagdish Prasad Johri predecessor in interest of the
respondents will be entitled for redemption of the mortgage after
payment of the loan and in case, the same is not done, will be
entitled to get the same by filing a suit. After the death of Jagdish
Prasad Johri, a suit was instituted by the heirs of deceased Jagdish
Prasad Johri in the court of Civil Judge (Junior Division) Bareilly
being Original Suit No. 35 of 2016 for the relief that the
defendants be directed to execute the documents for rehan wapsi
i.e. for cancellation of mortgage deed and shall also hand over
actual physical possession of the house mortgaged to the
plaintiffs. The aforesaid suit was filed with the allegation that late
Jagdish Prasad Johri requested several times to defendants in the
suit to take back amount of Rs. 15,000/- which was given to
Jagdish Prasad Johri and cancel the mortgage deed and hand over
possession of house in question. After the death of Jagdish Prasad
Johri on 26.10.2015, his heirs i.e. plaintiffs in the suit tendered
amount of Rs. 15,000/- by means of Bank Pay Order along with
notice dated 30.12.2015 to the defendants and demanded that the
defendants in the suit may get the mortgage deed cancelled and
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hand over the possession of the house in dispute. The plaintiff also
claimed damages from the date of notice. The notice was replied
by the defendants vide notice dated 12.01.2016 wherein the
defendants have admitted the mortgage deed and has also
admitted that the said mortgage deed was never redeemed and the
banker cheque along with notice was returned. It was also stated
that the plaintiffs has no right to redeem the mortgage. After being
noticed, the defendant nos. 2 to 4 moved an application under
Order 7 Rule 11 C.P.C. for rejection of plaint on the ground that
the mortgage deed was executed on 28.03.1978 and in the said
deed it was specifically mentioned that the mortgage is for the
period of four years. The period of four years expired on
28.03.1982. The mortgage was not redeemed by the mortgagor.
The limitation for redemption for mortgage is 30 years which has
expired on 28.03.2012 and the present suit was filed on
03.03.2016 after the expiry of limitation period and therefore the
plaint of the plaintiffs is liable to be rejected. Objections were
filed by the plaintiffs/respondents to the application filed by the
defendants/petitioners under Order VII Rule 11 C.P.C. The trial
court i.e. Civil Judge (Junior Division), Bareilly, on 13.10.2017
rejected the application filed by the defendants/petitioners under
Order VII Rule 11 C.P.C. holding that the suit is not barred by
limitation as the right to redeem the mortgage arose on 30.12.2015
when the plaintiff give notice for payment of mortgage debt.
Against the order dated 13.10.2017, the defendants/petitioners
filed revision No. 117 of 2017 before the Civil Judge (Senior
Division) Bareilly. The said revision was also dismissed by the
revisional court i.e. Additional District Judge, Court No. 9,
Bareilly, hence the present petition.
5. It has been contended by learned counsel for the petitioner that the
right of a mortgagor to redeem, is governed by Article 61 of the
Schedule to the Limitation Act and the right to redeem or recover
possession accrues on the date of execution of mortgage deed
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itself unless a different time is agreed between the parties. It has
also been contended by learned counsel for the petitioner that in
the mortgage deed it was provided that the period of mortgage is
four years and the said period expired on 28.03.1982. It has been
further contended by learned counsel for the petitioner that since
the mortgagor has right to redeem the mortgage on payment of
mortgage money and there can be no restriction to exercise his
right on the date of mortgage itself in case no time is prescribed
for exercise of such right, the period of limitation starts from the
date of execution of mortgage deed and on expiry thereof, the
right to recover the possession comes to an end. It has been further
contended by learned counsel for the petitioner that in the present
case, the said right accrued to the mortgagor on 28.03.1982 after
expiry of four years from the date of mortgage i.e. 28.03.1978.
The limitation for filing a suit for redemption is 30 years and the
said limitation expired on 28.03.2012 and therefore, the suit itself
was barred by time. It has been further contended by learned
counsel for the petitioner that the expiry of limitation not only
bars the remedy but also right to seek possession as provided
under Section 27 of the Limitation Act. Learned counsel for the
petitioner relied upon judgment of the Supreme Court in case of
Prabhakaran and others v. M. Azhagiripillai (dead) by LRs. and
others; 2006 (3) SCC 484 and Sampuran Singh v. Niranjan
Kaur; (1999) 2 SCC 679 . Relying upon the aforesaid judgments
of the Supreme Court, learned counsel for the petitioner contended
that in case of usufructuary mortgage where no time is fixed for
redemption, the right to redeem will accrue immediately on
execution of mortgage deed and the mortgagee has to file suit for
redemption within 30 years from the date of mortgage and
therefore failure to redeem the mortgage within a period
prescribed under Article 61 of the Limitation Act will lead to
closure of the option to seek redemption.
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6. Per contra, learned counsel for the plaintiffs/respondents
submitted that the document in question was a usufructuary
mortgage. In view of Section 62 of the Transfer of Property Act,
the limitation for filing a suit for redemption of usufructuary
mortgage or for recovery of possession will commence whenever
the mortgagor gives a notice to the mortgagee to receive back his
money and to hand over the possession. In the present case, the
plaintiffs send a demand draft of mortgage amount and asked the
defendants to hand over the property mortgaged on 30.12.2015,
hence, the limitation for filing the suit will start from 30.12.2015
and not earlier as contended by learned counsel for the petitioner.
Suit filed by the plaintiff/respondents is within time. It has been
contended by learned counsel for the respondents that in an
usufructuary mortgage right to recover possession continues till
the money is paid either from the rents and profits or where it is
partly paid from the rents and profits when the balance is paid by
the mortgagor or deposited in court as provided under Section 62
of the Transfer of Property Act. Learned counsel for the
respondents further submitted that in the present case, the rent of
the property mortgaged was to be adjusted for payment of interest
on the sum advanced i.e. Rs. 15,000/- and therefore, the limitation
will start only after payment of principal sum i.e. Rs. 15,000/- or
on tender being made by mortgagor of the principal amount to the
mortgagee which in the present case was done on 30.12.2015 and
therefore, the limitation will start from 30.12.2015 and not before.
7. Learned counsel for the respondent submitted that the judgments
relied upon by learned counsel for the petitioner in case of
Prabhakaran and others (Supra) and Sampuran Singh v.
Niranjan Kaur (Supra) were considered by a Larger Bench of the
Supreme Court in case of Singh Ram (D) Thr. L.Rs. v. Sheo Ram
and others; AIR 2014 SC 3447 and Supreme Court has held that
the law laid down in the judgment in case of Prabhakaran and
others (Supra) and Sampuran Singh v. Niranjan Kaur (Supra)
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does not lay down the correct view in law and has been impliedly
over ruled by the Larger Bench. Learned counsel for the
respondent relied upon the judgment of the Apex Court in case of
Singh Ram (D) Thr. L.Rs. v. Sheo Ram (Supra) judgment of the
Full Bench of Punjab & Haryana High Court in case of Ram
Kishan and others v. Sheo Ram; AIR 2008 P&H 77 , and
judgment of Supreme Court in case of Harminder Singh (D)
through L.Rs. v. Surjit Kaur (D) through L.Rs. & others; 2022
Legal Eagle SC 1365 .
8. Before considering the rival submissions of the parties, it will be
appropriate to refer to the statutory provisions of the Transfer of
Property Act as well as Limitation Act:
Sections 58, 60 & 62 of the Transfer of Property Act is as follows:
“58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and
“mortgage-deed” defined .—(a) A mortgage is the transfer of an interest in
specific immoveable property for the purpose of securing the payment of
money advanced or to be advanced by way of loan, an existing or future debt,
or the performance of an engagement which may give rise to a pecuniary
liability.
The transferor is called a mortgagor, the transferee a mortgagee; the
principal money and interest of which payment is secured for the time being
are called the mortgage-money, and the instrument (if any) by which the
transfer is effected is called a mortgage -deed.
(b) Simple mortgage .—Where, without delivering possession of the
mortgaged property, the mortgagor binds himself personally to pay the
mortgage-money, and agrees, expressly or impliedly, that, in the event of his
failing to pay according to his contract, the mortgagee shall have a right to
cause the mortgaged property to be sold and the proceeds of sale to be
applied, so far as may be necessary, in payment of the mortgage-money, the
transaction is called a simple mortgage and the mortgagee a simple
mortgagee.
(c) Mortgage by conditional sale .—Where the mortgagor ostensibly sells
the mortgaged property—
on condition that on default of payment of the mortgage-money on a certain
date the sale shall become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the
property to the seller, the transaction is called a mortgage by conditional sale
and the mortgagee a mortgagee by conditional sale:
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[Provided that no such transaction shall be deemed to be a mortgage, unless
the condition is embodied in the document which effects or purports to effect
the sale.]
(d) Usufructuary mortgage .—Where the mortgagor delivers
possession [or expressly or by implication binds himself to deliver
possession] of the mortgaged property to the mortgagee, and authorises him
to retain such possession until payment of the mortgage-money, and to
receive the rents and profits accruing from the property [or any part of such
rents and profits and to appropriate the same] in lieu of interest, or in payment
of the mortgage -money, or partly in lieu of interest [or] partly in payment of
the mortgage-money, the transaction is called an usufructuary mortgage and
the mortgagee an usufructuary mortgagee.
(e) English mortgage. —Where the mortgagor binds himself to re-pay
the mortgage-money on a certain date, and transfers the mortgaged property
absolutely to the mortgagee, but subject to a proviso that he will re-transfer it
to the mortgagor upon payment of the mortgage-money as agreed, the
transaction is called an English mortgage.
[(f) Mortgage by deposit of title-deeds. —Where a person in any of
the following towns, namely, the towns of Calcutta, Madras, [and Bombay],
3* and in any other town which the [State Government concerned] may, by
notification in the Official Gazette, specify in this behalf, delivers to a
creditor or his agent documents of title to immoveable property, with intent to
create a security thereon, the transaction is called a mortgage by deposit of
title-deeds.
(g) Anomalous mortgage .—A mortgage which is not a simple
mortgage, a mortgage by conditional sale, an usufructuary mortgage, an
English mortgage or a mortgage by deposit of title-deeds within the meaning
of this section is called an anomalous mortgage.]
60. Right of mortgagor to redeem. —At any time after the principal money
has become [due], the mortgagor has a right, on payment or tender, at a
proper time and place, of the mortgage - money, to require the mortgagee (a)
to deliver [to the mortgagor the mortgage-deed and all documents relating to
the mortgaged property which are in the possession or power of the
mortgagee], (b) where the mortgagee is in possession of the mortgaged
property, to deliver possession thereof to the mortgagor, and (c) at the cost of
the mortgagor either to re-transfer the mortgaged property to him or to such
third person as he may direct, or to execute and (where the mortgage has been
effected by a registered instrument) to have registered an acknowledgment in
writing that any right in derogation of his interest transferred to the
mortgagee has been extinguished:
Provided that the right conferred by this section has not been
extinguished by act of the parties or by [decree] of a Court.
The right conferred by this section is called a right to redeem and a
suit to enforce it is called a suit for redemption.
Nothing in this section shall be deemed to render invalid any
provision to the effect that, if the time fixed for payment of the principal
money has been allowed to pass or no such time has been fixed, the
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mortgagee shall be entitled to reasonable notice before payment or tender of
such money.
Redemption of portion of mortgaged property .—Nothing in this
section shall entitle a person interested in a share only of the mortgaged
property to redeem his own share only, on payment of a proportionate part of
the amount remaining due on the mortgage, except [only] where a mortgagee,
or, if there are more mortgagees than one, all such mortgagees, has or have
acquired, in whole or in part, the share of a mortgager.
62. Right of usufructuary mortgagor to recover possession .—In the case
of a usufructuary mortgage, the mortgagor has a right to recover possession
of the property [together with the mortgage-deed and all documents relating
to the mortgaged property which are in the possession or power of the
mortgagee],— (a) where the mortgagee is authorised to pay himself the
mortgage-money from the rents and profits of the property,—when such
money is paid: (b) where the mortgagee is authorised to pay himself from
such rents and profits [or any part thereof a part only of the mortgage -
money],—when the term (if any), prescribed for the payment of the
mortgage-money has expired and the mortgagor pays or tenders to the
mortgagee [the mortgage-money or the balance thereof] or deposits it in
Court as hereinafter provided.”
Article 61 (a) of the Limitation Act is as follows:
“61. By a mortgagor—
a)to redeem or recover
Thirty years. When the right to redeem
possession of immovable
or to recover possession
property mortgaged;
accrues.
9. Before considering case law relied upon by respective parties, it
would be useful to consider the nature of mortgage, specially the
usufructuary mortgage.
10. Justice Mehmood in case of Gopal v. Parsotam (1883) ILR 5
ALL 121, P. 137) says of the definition of the mortgage in Section
58 of the Transfer of Property Act, 1881 as under:
“mortgage as understood in this country cannot be defined better
than by the definition adopted by Legislature in Section 58 of the
Transfer of Property Act (IV of 1882). The definition has not in
any way altered the law but on the contrary, has only formulated
in clear language the notions of mortgage as understood by all
the writers of the text books on Indian mortgages. Every word of
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the definition is borne out by the decision by Indian Courts of
Justice.”
A mortgage is a transfer of an interest in specific immovable
property as security for the repayment of debt. But such interest
itself is immovable property. The nature of the right transferred
depends upon the form of mortgage. It is sufficient that the
transfer should be originally intended as security for the debt. The
court will ascertain the intention by looking at the substance and
essence of the transaction and not the mere form of the deeds.
Even if, deed calls itself a mortgage, its nature will be determined
not by the name parties give it but by the jural relationship
constituted by it. The question has to be decided with reference to
the pre-dominent intention of the parties as gathered from the
recitals and the terms of the documents and the surrounding,
circumstances, including conduct of the parties. The transfer must
be to a living person or persons (Section 5 of the Transfer of
Property Act).
In a mortgage, some rights are transferred to the mortgagee and
some remain vested in the mortgagor. In order to create a
mortgage it is necessary to specify the immovable property. The
description must at least be sufficient to identify the property. The
purpose or object of mortgage is to secure a debt. The transfer
made for the purpose discharging a debt is not a mortgage. The
mortgage may be for a present debt or a future debt to secure the
payment of the debt. Person executing the mortgage is called
mortgagor. A mortgagor must be a person competent to contract
and capable to transfer the property. A mortgagee is the person to
whom the interest in a immovable property is transferred by the
mortgagor for securing a debt. In a usufructuary mortgage the
mortgagee is placed in possession and has a right to enjoy the
rents and profits until the debt is paid. It is not necessary that the
mortgagee should take physical possession, for the mortgagor may
continue in possession as lessee of the mortgagee or he may direct
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the tenant to pay rents to the mortgagee but unless there is a clause
providing for mortgagee going in possession, there cannot of
course be a usufructuary mortgage, as possession of the mortgagee
is distinguishing feature for such a mortgage. It follows that there
cannot be two different usufructuary mortgage on the same
property at the same time. Under a usufructuary mortgage, the
mortgagor cannot be sued personally for the debt. The mortgagee
remains in possession until the mortgage money is paid.
11.In Mulla's The Transfer of Property Act, Ninth Edition, certain
statements are relevant. They read as follows:
"Right of redemption: The mortgagor in Indian Law is the
owner who had parted with some rights of ownership and the
right of redemption is a right which he exercises by virtue of his
residuary ownership to resume what he has parted with. The
Section affirms a right of redemption in all mortgagees and thus
carries out the recommendation of the Privy Council in
Thumbuswamy's case (1875 1 Mad 1, 2 IA, 241) that the
Legislature should intervene to recognize a right of redemption
in mortgagees by conditional sale. In India this right of
redemption is, however, a statutory one, and, therefore a legal
right as stated by the judicial committee. Right of redemption
cannot be extinguished by any agreement made at the time of
the mortgage as part of the mortgage transaction.
The right of redemption is an incident of a subsisting mortgage
and subsists so long as the mortgage itself subsists. It can be
extinguished as provided in the section and when it is alleged to
be extinguished by a decree, the decree should run strictly in
accordance with the forum prescribed for the purpose.
Dismissal of an earlier suit for redemption whether as abated or
as withdrawn or in default would not be barred the mortgagor
from filing a second suit for redemption so long as the mortgage
subsists and the right of redemption is not extinguished by the
efflux of time or by a decree of the court in the prescribed form.
A redemption pre-supposes the existence of a `mortgage'. As
defined in the Act, a mortgage is a transfer of an interest in
immovable property for the purpose of securing the payment of
a loan. It is created by the act of parties. In an usufructuary
mortgage, a transfer is made of the right of possession and
enjoyment of the usufruct. The rights of a usufructuary
mortgagee forms part of the bundle which constitute ownership.
The remainder still remains with the mortgagor and can be
transferred by him. The mortgagor's right is as indicated
in section 60 of the Act i.e. after the principal money has
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become due, the mortgagor has a right to pay the mortgage
money and on such payment, he has the right to require the
mortgagee to deliver possession. This right cannot be
extinguished except by the act of parties or by a decree of a
Court. This right is called the right to redeem and a suit to
enforce it is called a suit for redemption. Thus the scope of a
suit for redemption is preliminary to enforce the right to make a
payment of the mortgage money. A claim to redeem a mortgage
actually does not attach to the land, although the decree passed
in the suit may ultimately affect possession which is also an
interest in land.
The section is not prefaced by any such words as in the absence
of a contract to the contrary'. The right of redemption is
therefore a statutory right which cannot be fettered by any
condition which impedes or prevents redemption. Any such
condition is void as a clog on redemption.”
12. The authoritative work of Dr. Rashbehary Ghose's "Law of
Mortgage", which has received the approval of various High
Courts and the Supreme Court, the maxim 'once mortgage, always
a mortgage has been explained as under (Eighth Edition - Page
Nos. 280-281) under the heading "Once a Mortgage, always a
mortgage: is quoted as under:
“In 1681 Lord Nottingham in the leading case of Harris v.
Harris (1681) 1 Vern 33 firmly laid down the principal:
'Once a mortgage,' always a mortgage.' This is a doctrine to
protect the mortgagor's right of redemption: It renders all
agreements in a mortgage for forfeiture of the right to
redeem and also encumbrances of or dealings with the
property by the mortgagee as against a mortgagor coming
to redeem. In 1902 the well-known maxim, 'once a
mortgage, always a mortgage' was supplemented by the
words and nothing but a mortgage' added by Lord Davey in
the leading case of Noakes v. Rice 1902 A.C. 24 (H.L.) :
(1900-3) A11 E.R Rep 34, in which the maxim was
explained to mean 'that a mortgage cannot be made
irredeemable and a provision to that effect is void'. The
maxim has been supplemented in the Indian context by the
words 'and therefore always redeemable', added by Justice
Sarkar of the Supreme Court in the case of Seth Ganga
Dhar v. Shankarlal .
It is thus evident that very conception of mortgage, involves
three principals. First, there is the maxim: 'Once a
mortgage, always a mortgage.' that is to say, a mortgage is
always redeemable and if a contrary provision is made, it is
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invalid. And this is an exception to the aphorism, modus et
conventio vincunt legem (custom and agreement overrule
law). Secondly, the mortgagee cannot reserve to himself
any collateral advantage outside the mortgage agreement.
Thirdly, as a corollary from the first another principal may
be deduced, namely, 'once a mortgage, always a mortgage,
and nothing but a mortgage'. In other words, any stipulation
which prevents a mortgagor from getting back the property
mortgaged is void. That is, a mortgage is always
redeemable.
The maxim 'once a mortgage, always a mortgage' may be
said to be a logical corollary from the doctrine, which is the
very foundation of the law of mortgages, that time is not of
the essence of the contract in such transactions; for the
protection which the law throws round the mortgagor might
be rendered wholly illusory, if the right to redeem could be
limited by contract between the parties (For a very curious
case mentioned in the books in which the mortgagor was
permitted to redeem, although he had solemnly sworn on
the Bible never to exercise the right, see Stistefl's case cited
in East India Co. v. Atkyns 1 Compyn 348). Right to
redeem is an incident of a subsisting mortgage and is
inseparable from it so that the right is co-extensive with the
mortgage itself. The right subsists until it is appropriately
and effectively extinguished either by the acts of the parties
concerned or by a proper decree of the competent court.”
13. In case of Lachhman Singh v. Natha Singh through Harnam
Singh and others; 1940 AIR Lahore 401 (FB) , Full Bench of
Lahore High Court held in paragraph nos. 5 to 11 as under:
“5. Before examining the provisions of the Act, it seems necessary to
determine the exact nature of the transactions in question and the rights
and obligations of the parties under them. From the conditions of the
mortgages already given, it will appear that they are "usufructuary
mortgages" as defined in cl. "(d), Section 58, Transfer of Property Act.
That Act, of course, is not in force in the Punjab, but the definitions of the
various kinds of mortgages given in it have always been accepted as
correctly describing their essential ingredients and incidents. This
definition is as follows:
(d) Where the mortgagor delivers possession or expressly or
by implication binds himself to deliver possession of the
mortgaged property to the mortgagee and authorizes him to
retain such possession until payment of the mortgage money,
and to receive the rents and profits accruing from the property
or any part of such rents and profits and to appropriate the
same in lieu of interest, or in payment of the mortgage money,
or partly in lieu of interest and partly in payment of the
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mortgage money, the transaction is called a "usufructuary
mortgage," and the mortgagee a "usufructuary mortgagee."
6. It will be seen that the characteristics of a usufructuary mortgage, as
defined above, are: (1) that the possession of the mortgaged property is
delivered, or agreed to be delivered, to the mortgagee; (2) that he is to
appropriate the rents and profits either (a) in lieu of interest, or (b) towards
the principal, or (c) partly in lieu of interest and partly in payment of the
principal; (3) that in none of these cases the mortgagor incurs any personal
liability to repay; and (4) as the mortgagor has not bound himself to repay
(but may repay if and when he chooses) there can be no "forfeiture" and
therefore the remedies by way of foreclosure or sale are not open to the
mortgagee.
7. These propositions are too well established to require an elaborate
discussion. In Ram Narain Singh v. Adindra Nath AIR 1916 Privy Council
119, their Lordships of the Privy Council after examining the particular deed
before them held that, having regard to the nature of the deed which was a
usufructuary mortgage only and to its terms, any personal liability on the part
of the "mortgagor was excluded." Again, there is a large number of cases in
which it has been held that a usufructuary mortgagee is not entitled to sue for
sale of the property (Chathu v. Kunjan, Sadashiv v. Vyankatrao, Umrao v.
Umrao Begam, and Luchmeshar Singh v. Dookh Mochan Jha and where there
is a stipulation to the contrary the transaction ceases to be one of
"usufructuary mortgage" but is what is described as an "anomalous
mortgage." As stated in (2) above, usufructuary mortgages are of three kinds.
Of these, the two described in (b) and (c) are self redeeming; the mortgagee
has to look to the rents and profits only to re-pay himself and when his entire
charge is so liquidated he must re-deliver possession of the mortgaged
property to the mortgagor free from all encumbrances. A common instance of
this kind of mortgage found in the Punjab, especially in the western districts,
is the lekha mukhi mortgage where the mortgagee takes over the land and
binds himself to keep the lekha (account) of the produce, and as soon as the
principal and interest have been paid off therefrom, he must surrender the
property to the mortgagor. In this mortgage the mortgagor undertakes no
personal liability and while he is competent at any time to claim redemption
on payment of the amount found to be due under the mortgage the mortgagee
is not entitled to sue for his debt (per Plowden J. in Gahimal v. Shera).
Another familiar instance of this kind of mortgage is the one permitted under
Section 6 or Section 14, Punjab Alienation of Land Act, in which the entire
principal and interest is automatically wiped off within a specified period, not
exceeding 20 years, irrespective of whether the rent and profits actually
realized by the mortgagee are more or less than the principal sum secured and
interest due thereon. In this case also there is no personal liability of the
mortgagor to pay nor has the mortgagee a right to bring the property to sale.
8. The most common form of usufructuary mortgage however is that
described in 2(a) above, and it is to this class that the mortgages in the cases
before us belong. Here the rents and profits are to be set off against interest
and the mortgagee is entitled to retain possession until such time as the
mortgagor chooses to redeem on payment of the principal sum secured. This
form of mortgage has been in vogue in India since ancient times. It was
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known to the Hindu lawyers under the expressive name of bhog bandakam
which literally means "mortgage (bandaka) by enjoyment (bhog)." It was a
mortgage for an indefinite period, during which the mortgagee enjoyed the
usufruct and the mortgagor was entitled to redeem at any time on payment of
the principal. It retained its popularity during the Mughal period, especially
among the Mahomedan creditors who by obtaining possession of property (as
a zer-i-peshgi lessee and under other similar names) and appropriating the
rents and profits till redemption, could find a safe investment for their money
without charging interest. This form of mortgage is not peculiar to India
alone. It has been described by Dr. Ghose and other standard writers as
analogous to what was known as a 'Welsh mortgage' in England, where it has
now become obsolete. But it has been the subject of judicial consideration in
Ireland in recent times, and there are reported cases to which reference may
usefully be made. In Balfe v. Lord (1842) 2 Dr & War 480, Lord St. Leonards
described a Welsh mortgage as one under which the lender goes into
possession of the rents and continues to receive them until the party who
borrowed the money, chooses to redeem and this he is always permitted to do,
so that the peculiarity is that while there can be no foreclosure on the part of
the mortgagee, still the right of redemption subsists in the mortgagor.
9. More recently in Ireland, in Cassidy v. Cassidy (1890) 24 LR Ir 577
Johnson J. described a Welsh mortgage as a kind of security by which on the
one side the land is assured to the lender as his security--his possession of the
land and enjoyment of the profits being in lieu of interest--while on the other
side, the borrower is under no personal obligation to pay the principal money
but is entitled to redeem at any time upon its payment.
10. Again, In Re Cronin (1914) 1 Ir R 23 it was pointed out that a power of
sale was wholly inconsistent with the 'continuing' right of redemption which
the Welsh mortgage carries and that the express inclusion in the security of
such a stipulation showed that security was not a Welsh mortgage.
11. It will be clear from the foregoing discussion that the principal
characteristics of a usufructuary mortgage are that there is no personal
liability of the mortgagor to pay, nor has the mortgagee a right to have the
mortgaged property brought to sale…….”
14.In case of Prabhakaran and others (Supra) relied upon by learned
counsel for the petitioner, it has been held by the Apex Court in
case of usufructuary mortgage which does not fix any date for
redemption of mortgage money, but merely specifies that
mortgagee is entitled to be in possession till redemption right to
redeem would accrue immediately on execution of the mortgage
deed and the mortgagor has to filed suit for redemption within 30
years from the date of mortgage. Paragraph no. 11 of the judgment
in case of Prabhakaran and others (Supra) is quoted as under:
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“11. Article 148 of the Limitation Act, 1908 (referred to as 'old
Act') provided a limitation of 60 years for a suit against a
mortgagee, to redeem or to recover possession of immovable
property mortgaged. The corresponding provision in the
Limitation Act, 1963 ('new Act' or 'Limitation Act' for short), is
Article 61(a) which provides that the period of limitation for a
suit by a mortgagor to redeem or recover possession of the
immovable property mortgaged is 30 years. The period of
limitation begins to run when the right to redeem or to recover
possession accrues. In the case of a usufructuary mortgage
which does not fix any date for repayment of the mortgage
money, but merely stipulates that the mortgagee is entitled to
be in possession till redemption, the right to redeem would
accrue immediately on execution of the mortgage deed and the
mortgagor has to file a suit for redemption within 30 years
from the date of the mortgage. Section 27 of the Limitation Act
provides that "at the determination of the period hereby
limited to any person for instituting a suit for possession of
any property, his right to such property shall be extinguished".
This would mean that on the expiry of the period of limitation
prescribed under the Act, the mortgagor would lose his right
to redeem and the mortgagee would become entitled to
continue in possession as the full owner.”
15. In case of Sampuran Singh v. Niranjan Kaur (Supra), relied
upon by learned counsel for the petitioner, the Supreme Court has
held in paragraph no. 14 as under:
“14. Submission was, as aforesaid, right to redeem only
accrue when either mortgagors tender the amount of mortgage
or the mortgagees communicate satisfaction of the mortgage
amount through the usufruct from the land. This submission is
misconceived, as aforesaid, if this interpretation is accepted,
then till this happens the period of limitation never start
running and it could go on for an infinite period. We have no
hesitation to reject this submission. The language recorded
above makes it clear that right of redemption accrues from the
very first day unless restricted under the mortgage deed. When
there is no restriction mortgagors have a right to redeem the
mortgage from that very date when the mortgage was
executed. Right accruing means, right either existing or
coming into play thereafter. Where no period in the mortgage
is specified, there exist a right to a mortgagor to redeem the
mortgage by paying the amount that very day in case he
receives the desired money for which he has mortgaged his
land or any day thereafter. This right could only be restricted
through law or in terms of a valid mortgage deed. There is no
such restriction shown or pointed out. Hence, in our
considered opinion the period of limitation would start from
the very date the valid mortgage is said to have been executed
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hence the period of limitation of 60 years would start from the
very date of oral mortgage that would be from March, 1893.
In view of this, we do not find any error in the decision of the
first Appellate Court or the High Court holding that the suit of
the present appellants is time barred.”
16.In case of Singh Ram v. Sheo Ram (supra) relied upon by learned
counsel for the respondents in paragraph no. 2 of the judgment,
the Supreme Court has quoted the question which was referred to
the Larger Bench of the Supreme Court, same is quoted as under:
“2. These matters have been put up before this Bench in
pursuance of the order passed by a Bench of two Judges on
18.08.2008, as under:
“As it appears that observations made by this Court in
Prabhakaran & Ors. v. M. Azhagiri Pilolai & Ors., reported in
2006 (4) SCC 484: (AIR 2006 SC 1567), in regard to the
interpretation and/or application of Article 61 of the Schedule
appended to the Limitation Act, 1963 are contrary to the
principals laid down by this Court in a large number of
decisions, including Jayasingh Dhyanu Mhoprekar & Anr. v.
Krishna Babaji Patil & Anr. [1985(4) SCC 162] (AIR 1985 SC
1646) as also various decisions referred to by the Full Bench
of the High Court, we are of the opinion that the matter should
be heard by a larger Bench.
Before adverting to the question of reconciling
conflicting opinions in various decisions, including the two
decisions referred to above, we consider it appropriate to
mention that by the impugned judgment, the Full Bench of the
High Court of Punjab and Haryana at Chandigarh,
considered the question "whether there is any time limit for
usufructuary mortgagor to seek redemption?” and decided the
said question in the negative, in favour of the respondent-
mortgagor as follows:-
“Therefore, we answer the questions framed to hold
that in case of usufructuary mortgage, where no time limit is
fixed to seek redemption, the right to seek redemption would
not arise on the date of mortgage but will arise on the date
when the mortgagor pays or tenders to the mortgagee or
deposits in Court, the mortgage money or the balance thereof.
Thus, it is held that once a mortgage always a mortgage and is
always redeemable.” The correctness of the above view is the
subject matter of consideration before this Court.”
17. While answering the reference, the Supreme Court in case of
Singh Ram v. Sheo Ram (Supra) has held as under:
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“ 8. The main contention urged on behalf of the appellants is
that the right of mortgagor to redeem is governed by Article
61 of the Schedule to the Limitation Act and the right to
redeem or recover possession accrues on the date of the
mortgage itself, unless a different time is agreed between the
parties. Since the mortgagor has right to redeem on payment
of the mortgage money and there can be no restriction on the
mortgagor to exercise his right on the date of mortgage itself,
period of limitation starts on the date of mortgage and on
expiry thereof, right to recover possession comes to an end.
The expiry of limitation not only bars the remedy but also the
right to seek possession as provided under Section 27 of the
Limitation Act. It is submitted that this Court has dealt with
the issue in Sampuran Singh & Ors. vs. Niranjan Kaur (smt.)
& Ors., (1999) 2 SCC 679. There is no occasion to reconsider
the said view. Reliance is also placed on a Full Bench decision
of the High Court of Himachal Pradesh in Bhandaru Ram (D)
Thr. L.R. Ratan Lal vs. Sukh Ram, AIR 2012 (H.P.) 1 (FB)
wherein the impugned judgment of the Full Bench of the
Punjab and Haryana High Court has been expressly dissented
from and it has been concluded that the period of limitation
for filing a suit for recovery of possession of immovable
property or redemption of usufructuary mortgage, which have
not fixed any time for repayment of mortgage money, is 30
years from the date of mortgage, as prescribed under Article
61 of the Schedule to the Limitation Act, 1963 (60 years under
Article 148 as per Indian Limitation Act, 1908).
9. Learned counsel for the respondents support the view taken
by the High Court and submit that the usufructuary mortgage
was different from any other mortgage and the person, who
parts with possession of his property from rents and profits of
which the mortgagee was entitled to recover the mortgage
money, could not be placed at par with a mortgagor who had
not given possession of the property to mortgagee and allowed
the usufruct of the property to be used for payment of
mortgage money. In such cases, limitation could not run from
the date of mortgage but from the date mortgage money is
paid out of rents and profits of the property to the knowledge
of the mortgagor or from the date of payment or deposit by the
mortgagor. Mere expiry of time from the date of mortgage
could not extinguish the right of redemption and to recover
possession.
10. We have given our anxious consideration to the question of
law arising in the cases.
11. We are in agreement with the view taken in the impugned
judgment that in a usufructuary mortgage, right to recover
possession continues till the money is paid from the rents and
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profits or where it is partly paid out of rents and profits when
the balance is paid by the mortgagor or deposited in Court as
provided under Section 62 of the T.P. Act.
13. We may now refer to decisions of this Court.
(i) In Prabhakaran & Ors. vs. M. Azhagiri Pillai & Ors.,
(2006) 4 SCC 484, suit of mortgagor for redemption was held
to be within limitation. However, in para 13, it was observed:-
“13. Article 148 of the Limitation Act, 1908
(referred to as “the old Act”) provided a limitation
of 60 years for a suit against a mortgagee to redeem
or to recover possession of immovable property
mortgaged. The corresponding provision in the
Limitation Act, 1963 (“the new Act” or “the
Limitation Act” for short), is Article 61(a) which
provides that the period of limitation for a suit by a
mortgagor to redeem or recover possession of the
immovable property mortgaged is 30 years. The
period of limitation begins to run when the right to
redeem or to recover possession accrues. In the
case of a usufructuary mortgage which does not fix
any date for repayment of the mortgage money, but
merely stipulates that the mortgagee is entitled to be
in possession till redemption, the right to redeem
would accrue immediately on execution of the
mortgage deed and the mortgagor has to file a suit
for redemption within 30 years from the date of the
mortgage. Section 27 of the Limitation Act provides
that “at the determination of the period hereby
limited to any person for instituting a suit for
possession of any property, his right to such
property shall be extinguished”. This would mean
that on the expiry of the period of limitation
prescribed under the Act, the mortgagor would lose
his right to redeem and the mortgagee would
become entitled to continue in possession as the full
owner.”
The above observations do not take into account the
special right of usufructuary mortgagor under
Section 62 of the T.P. Act to recover possession
which commences after mortgage money is paid out
of rents and profits or partly out of rents and profits
and partly paid or deposited by mortgagor. Thus,
we are unable to accept the same as correct view in
law.
14. We need not multiply reference to other judgments.
Reference to above judgments clearly spell out the reasons for
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conflicting views. In cases where distinction in usufructuary
mortgagor’s right under Section 62 of the T.P. Act has been
noted, right to redeem has been held to continue till the
mortgage money is paid for which there is no time limit while
in other cases right to redeem has been held to accrue on the
date of mortgage resulting in extinguishment of right of
redemption after 30 years.
15. We, thus, hold that special right of usufructuary mortgagor
under Section 62 of the T.P. Act to recover possession
commences in the manner specified therein, i.e., when
mortgage money is paid out of rents and profits or partly out
of rents and profits and partly by payment or deposit by
mortgagor. Until then, limitation does not start for purposes of
Article 61 of the Schedule to the Limitation Act. A
usufructuary mortgagee is not entitled to file a suit for
declaration that he had become an owner merely on the expiry
of 30 years from the date of the mortgage. We answer the
question accordingly.
16. On this conclusion, the view taken by the Punjab and
Haryana High Court will stand affirmed and contrary view
taken by the Himachal Pradesh High Court in Bhandaru Ram
(D) Thr. L.R. Ratan Lal vs. Sukh Ram (supra) will stand over-
ruled.”
18. The Full Bench judgment of the Punjab & Haryana High Court in
case of Ram Kishan and others v. Sheo Ram (Supra), which has
been upheld by the Supreme Court in case of Singh Ram v. Sheo
Ram (Supra) in paragraph nos. 44, 45, 47 & 48, the Full Bench
has held has under:
44. Section 60 of the Act is general in nature applicable to
“
all kinds of mortgages including usufructuary mortgage which
is evident from Clause (b) of Section 60 of the Act, where the
mortgagee in possession of the mortgaged property is required
to deliver possession to the mortgagor. But Section 62 of the
Act is a special provision dealing only with the rights of
usufructuary mortgagor. In terms of Clause (a) of Section 62
of the Act, the suit is for possession after the mortgage comes
to an end by self redeeming process as the mortgagee is
authorised to pay himself the mortgage money from the rents
and profits of the property. The mortgagee has to look to the
rents and profits only to repay himself and when his entire
charge is so liquidated he must re-deliver possession of the
mortgaged property to the mortgagor. However, in terms of
Clause (b) of Section 62 of the Act, the right of the mortgagor
will arise'only after rents and profits derived by the mortgagee
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out of the usufruct of the mortgaged property are adjusted
towards the interest or the principal and on mortgagor paying
the balance in the manner prescribed. In such mortgages,
rents and profits are to be set off against interest and the
mortgagee is entitled to retain possession until such time as
the mortgagor chooses to redeem on payment of.the principal
sum secured. Such right for possession will accrue after the
mortgage money is paid off.
45. The limitation of 30 years under Article 61(a) beings to
run "when the right to redeem or the possession accrues". The
right to redemption or recover possession accrues to the
mortgagor on payment of sum secured in case of usufructuary
mortgage, where rents and profits are to be set off against
interest on the mortgage debt, on payment or tender to the
mortgagee, the mortgage money or balance thereof or deposit
in the court. The right to seek foreclosure is co-extensive with
the right to seek redemption. Since right to seek redemption
accrues only on payment of the mortgage money or the
balance thereof after adjustment of rents and profits from the
interest thereof, therefore, right of foreclosure will not accrue
to the mortgagee till such time the mortgagee remains in
possession of the mortgaged security and is appropriating
usufruct of the mortgaged land towards the interest on the
mortgaged debt. Thus, the period of redemption or possession
would not start till such time usufruct of the land and the
profits are being adjusted towards interest on the mortgage
amount. In view of the said interpretation, the principle that
once a mortgage, always a mortgage and, therefore always
redeemable would be applicable.
47. Thus, we prefer to follow the dictum of law Lald down by
the larger Bench in Seth Ganga Dhar's case (supra) as well as
judgments of Hon'ble Supreme Court in Jayasingh Dnyanu
Mhoprekar's case (supra), Pomal Kanji Govindji's case
(supra), Panchanan Sharma's case (supra) and Harbans 's
case (supra) in preference to the judgments relied upon by the
mortgagees in Prabhakaran's case (supra) and Sampuran
Singh's case (supra).
48. Therefore, we answer the questions framed to hold that in
case of usufructuary mortgage, where no time limit is fixed to
seek redemption, the right to seek redemption would not arise
on the date of mortgage but will arise on the date when the
mortgagor pays or tenders to the mortgagee or deposits in
Court, the mortgage money or the balance thereof. Thus, it is
held that once a mortgage always a mortgage and is always
redeemable. ”
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19. Thus, right of redemption of a mortgagor being a statutory right,
the same can be taken away only in terms of the proviso to
Section 60 of the Transfer of Property Act which is extinguished
either by a decree or by act of the parties.
20. In a very recent judgment in case of Harminder Singh (D)
through L.Rs. (Supra) the view taken by the Supreme Court in
case of Singh Ram v. Sheo Ram (Supra) has been reaffirmed.
21. So far as the contention of learned counsel for the petitioners is
concerned that the time prescribed in the mortgage deed was four
years and therefore, the cause of action for filing the suit for
redemption of mortgage will start after expiry of four years is also
misconceived, for the reason that at the best the time of four years
as prescribed in the mortgage deed can be said that during this
period of four years mortgagor could not have filed a suit for
redemption of mortgage. Whether the said restriction would
amount to the clog on the rights of the mortgagor, I am not
inclined to consider the same but it cannot be said that the
limitation will start running after expiry of the aforesaid four years
period.
22. From the law as discussed above, I am of the considered opinion
that the limitation will start only after payment or tender of
payment by the mortgagor to the mortgagee of the amount due in
case of usufructuary mortgage and not otherwise.
23. In the facts of the present case, it is admitted that it was only for
the first time on 30.12.2015, the notice was given to the
petitioners along with pay orders for payment of the principal sum
to the defendants which was refused by them. The limitation will
start from 30.12.2015 itself as the said date will be the date on
which the amount was tendered by the mortgagor to the
mortgagee. The suit was filed on 03.03.2016 is definitely be
within the limitation.
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24. In view of the above, no error has been committed by the courts
below in dismissing the application filed by the petitioners under
Order VII Rule 11 C.P.C. for rejecting the plaint on the ground
that the suit was barred by limitation.
25. Consequently, the writ petition fails and is dismissed .
26. No order as to cost.
27. Interim order, if any, stands discharged.
(Manish Kumar Nigam,J.)
July 1, 2026
Ved Prakash
Digitally signed by :-
VED PRAKASH SHARMA
High Court of Judicature at Allahabad