A mortgagee’s prolonged possession supported prescriptive title despite non-redemption of the mortgage.

The plaintiffs sought a declaration of title to 18 cents in S.No.26/6A and a permanent injunction.

They claimed 9 cents under a 1960 sale deed and the remaining 9 cents through a 1957 transaction recorded in an unregistered Yadast (Ex.A1), under which Madathiammal allegedly received Rs.100, delivered possession, and handed over her original 1934 sale deed to the plaintiffs’ father, Petchimuthu Thevar.

The defendants denied that transaction and asserted that the 9 cents remained with Madathiammal and later passed to them.

The trial court dismissed the suit. The first appellate court granted the plaintiffs a declaration and injunction for 9 cents, but rejected the balance of the claim.

In the second appeal, the High Court considered the plaintiffs’ claim to the remaining 9 cents under Ex.A1.

Whether the defendants had lost their right to redeem or recover the property covered by Ex.A1.

Whether the plaintiffs were entitled to 18 cents by way of possessory title.

Under Section 58(f) of the Transfer of Property Act, 1882, a mortgage by deposit of title deeds arises where there is a debt, deposit of title deeds, and an intention to create security; Section 59 does not require such a mortgage to be created by registered instrument.

The judgment stated that the redemption period is 30 years under Section 67 of the Transfer of Property Act read with Article 61 of the Limitation Act, 1963.

It relied on Union of India v. Vasavi Co-operative Housing Society Ltd. and Singh Ram v. Sheo Ram for the principle that a usufructuary mortgagee does not become owner merely because 30 years have elapsed since the mortgage.

It also cited Syndicate Bank v. Estate Officer and Manager, APIIC Ltd. on the requisites of an equitable mortgage, and State of Haryana v. Narvir Singh on the non-requirement of registration for a mortgage by deposit of title deeds.

The Court treated Ex.A1, read with the admitted custody of Madathiammal’s original title deed and the delivery of possession to Petchimuthu Thevar, as evidence of a mortgage by deposit of title deeds, with possession also handed over.

It found the necessary elements of debt, deposit, and intention to create security, and held that Ex.A1 did not require registration for that purpose.

Although the Court stated that expiry of the redemption period alone could not make a usufructuary mortgagee owner, it relied on the plaintiffs’ long possession and the mortgage remaining unredeemed to find that they had prescribed title.

It modified the first appellate decree accordingly and allowed the second appeal without costs.