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Motilal Fulchand And Another v. Gita Rama And Another
Judgment Summary — Bhagwati, J.
Factual and Procedural Background
These consolidated appeals arise from judgments of the Special Judge of the Special Tribunal Court at Mangalwedha in two suits: Suit No. 1894 of 1937 and Suit No. 1322 of 1938. The common plaintiff in both suits was Bai Gita (daughter of Gundi). The common defendant was the firm Jaynarayan Jagannath Marwadi (referred to as defendant 1), its partners and various subsequent purchasers (alienees) of certain properties and lands at Mangalwedha.
Background facts (as stated in the opinion):
- Appa had three sons: Gundi, Rama and Sada. There was a severance of joint status on 1-9-1892 (partition receipts relied on).
- Gundi, as a separated member of the family, executed three mortgage deeds in favour of defendant 1 in 1898, 1900 and 1901, mortgaging seven lands and a possessory mortgage of a house (consideration Rs. 25); Rama and Sada stood as sureties in those mortgage deeds.
- Gundi died in 1904. A decree-holder obtained an execution (darkhast No. 347 of 1905) and an auction sale was held. Sada was brought on record as the heir and legal representative of Gundi in the execution proceedings; Gundi's daughters, Bai Gita (plaintiff) and Tanu (defendant 13 / defendant 6 in respective suits), were not made parties as heirs.
- Defendant 1 purchased the house and the seven lands at the court sale and entered into possession.
- Defendant 1 conveyed the house to defendants 2–5 by conveyance dated 19-4-1912; five of the seven lands were conveyed to defendants 5–9 by conveyances dated between 11-4-1919 and 26-4-1922; two lands remained with defendant 1 (and defendant 3, a partner).
- The plaintiff initially sought accounts of the mortgage transactions and, by direction of the Appeal Court, prosecuted suits for redemption of the property and lands against defendant 1 and the various alienees.
Trial court findings and appeals:
- In Suit No. 1894 of 1937 the trial Judge held the suit property free from defendant 1's mortgage but held plaintiff's claim against defendants 2–5 barred by limitation under Art. 134 (Limitation Act); the trial court awarded Rs. 25 compensation against defendant 1. Appeals arising: F.A. No. 360 of 1948 (defendant 1 appealed the compensation award) and F.A. No. 362 of 1948 (plaintiff appealed claiming Rs. 1,000).
- In Suit No. 1322 of 1938 the trial Judge held the plaintiff's claim against defendants 5–9 was barred by limitation under Art. 134 and dismissed that part; against defendants 1 and 3 the mortgage was held satisfied and plaintiff (and Tanu) were granted possession of two properties. Appeals: F.A. No. 361 of 1948 (defendants 1 and 3) and F.A. No. 363 of 1948 (plaintiff sought decree against defendants 5–9).
- All four appeals were heard together before the court delivering this opinion.
Legal Issues Presented
- Whether Gundi, Rama and Sada were separated co-parceners (i.e., whether there had been a severance of joint status) or were undivided in interest.
- Whether the plaintiff's suits (for redemption/recovery of possession) were barred by the law of limitation (specifically the applicability of Art. 12, Art. 134 and Art. 148 of the Limitation Act).
Arguments of the Parties
Plaintiff's Arguments
- The plaintiff advanced that these were suits for redemption of mortgage and therefore governed by Art. 148, Limitation Act (sixty years), which prescribes the period for suits by mortgagors to redeem or recover possession; the limitation period begins when the right to redeem accrues.
- The plaintiff claimed compensation for loss of the mortgaged property (trial court awarded Rs. 25; on appeal plaintiff claimed Rs. 1,000).
Defendant 1 and Other Defendants' Arguments
- Defendant 1 contended that the auction sale in execution was validly held and that it acquired good title to the properties purchased at the court sale.
- Defendant 1 argued that the plaintiff's suits were barred by limitation — either under Art. 12 (one year to set aside a sale in execution, from confirmation of sale) or under Art. 134 (twelve years for suits to recover possession where mortgaged property is afterwards transferred by the mortgagee for value).
- In relation to the alienees (defendants 2–5 and 5–9), the defence raised (or relied upon) protection available to bona fide purchasers/transferees for value without notice under Art. 134, as applicable depending on the nature of the mortgagee's transfer.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Tairamiya v. Shibelisaheb, 44 Bom. 614 | Distinction between a suit to recover possession (Art. 134) and a suit to redeem (Art. 148); a mortgagor's right to redeem (Art. 148) is not defeated simply because the mortgagee transferred the mortgage bond to another person. | The court relied on this authority to support the proposition that a suit for redemption is ordinarily governed by Art. 148 and does not automatically become a suit under Art. 134 merely because the mortgagee transferred his mortgage to another. |
| Keshav Raghunath v. Gafurkhan, 46 Bom. 903 | Where a mortgagee sells the mortgaged property as ostensible owner for valuable consideration, the purchaser's right becomes unassailable by the mortgagor after twelve years under Art. 134. | The decision supplies the ratio that Art. 134 applies when the mortgagee purports to convey the whole property as absolute owner for value; the court used this to explain circumstances in which Art. 134 will defeat a mortgagor's claim. |
| Vishvanath v. Tukaram, 27 Bom. L.R. 661 | Art. 134 does not apply to a suit by a mortgagor to recover possession from an alienee of the mortgagee who took with notice of the mortgage; such suits are governed by Art. 148. | The court cited this case to show that notice to the transferee alters the legal characterization of the transfer (i.e., it is treated as a transfer of the mortgagee's interest, not of the whole unencumbered title), supporting the proposition that bona fide transferees without notice are protected by Art. 134 whereas transferees with notice are not. |
| Skinner v. Naunihal Singh, 31 Bom. L.R. 854 (Privy Council) | Article 134 contemplates a transfer by a mortgagee purporting to transfer a larger interest than that given by the mortgage (an interest unencumbered by the mortgage); applicability is not limited by whether the mortgagee knew himself to be only a mortgagee or whether possession was obtained before/after the mortgage. | The court relied on the Privy Council's formulation to state the correct legal principle: Art. 134 protects bona fide transferees for value where the mortgagee has purported to convey a larger/absolute interest than his mortgage right. |
| Mulchand v. Jairamdas, 37 Bom. L.R. 288 (B.J. Wadia J.) | Under Order 22, Rule 4, Civil P.C. it is sufficient if only one out of several legal representatives of a deceased party is brought on record; it is not necessary to implead all representatives to bind the estate. | The court applied this authority to justify that, where defendant 8 had died and several legal representatives were on the record, the decree could bind those representatives who had been brought and served (defendants 8 e, f, g) in their representative capacity for the estate. |
Court's Reasoning and Analysis
The court addressed the two principal issues sequentially and applied the governing legal principles and precedents to the facts.
1. Whether the three brothers were separated co-parceners
- The court examined two partition receipts dated 1-9-1892. Although unregistered, the court held they were admissible to prove the collateral fact of partition (severance of joint status).
- Additionally, the fact that Gundi alone executed mortgage deeds in 1898–1901 with Rama and Sada signing merely as sureties was inconsistent with a continuing undivided joint family interest. The court concluded that Gundi, Rama and Sada had been severed and that Gundi died as a separated member of the family.
2. Validity of the execution sale and applicability of limitation provisions
- Because Gundi had died as a separated person, his heirs and legal representatives were his daughters Bai Gita and Tanu. The execution proceedings brought Sada on record as heir and legal representative; this was a procedural error rendering the execution proceedings and the auction sale in Darkhast No. 347 of 1905 void (not merely voidable).
- Since the sale was void, Art. 12 (Limitation Act) — which prescribes one year to set aside a sale in execution — did not apply (Art. 12 applies to voidable sales once confirmed; a sale that is void requires no action under Art. 12 to "set aside").
- The court then proceeded to the contested question whether Art. 134 (twelve years) or Art. 148 (sixty years for redemption) applied to the plaintiff's claims against various transferees of defendant 1.
- The court rehearsed authorities showing the governing test: Art. 148 normally governs a mortgagor's suit to redeem; Art. 134 protects a transferee who can show he took (i) for valuable consideration and (ii) without notice, and (iii) that the mortgagee purported to transfer a larger/absolute interest (not merely the mortgagee's limited rights).
- Applying the principles to Suit No. 1894 (the house): the conveyance to defendants 2–5 described transfer of the mortgagee's malaki and vahivat (and thus was a transfer purporting to convey a larger interest / unencumbered title). On that basis defendants 2–5 were entitled to the benefit of Art. 134 and the plaintiff's claim against them was time-barred. The trial Judge was correct to hold the claim barred as against those alienees.
- However, the trial Judge's award of Rs. 25 compensation against defendant 1 (for loss of the mortgaged property) lacked justification, since the bar of limitation against the alienees was not a circumstance attributable to defendant 1 that would justify compensation. The court deleted the compensation award and dismissed the related appeals accordingly.
- Applying the principles to Suit No. 1322 (the five alienated lands): none of defendants 5–9 appeared at trial or produced sale deeds or proved circumstances that would bring their transactions within Art. 134 (i.e., they did not prove they were bona fide transferees for value without notice and that the mortgagee purported to transfer a larger title). Therefore, nothing removed those transactions from the ordinary operation of Art. 148; the mortgagor (plaintiff) was entitled to a decree for redemption against defendants 5, 6, 7, 8 and 9 (with the caveat concerning defendant 8's heirs).
- Concerning defendant 8's death and representation: applying Mulchand v. Jairamdas and Order 22, Rule 4, Civil P.C., bringing one or more legal representatives on record sufficed; the decree could be asserted against those representatives brought and served (defendants 8 e, f, g) in their representative capacity for the estate of the deceased defendant 8.
- The court thus allowed the plaintiff's appeal insofar as it sought redemption against specified alienees in Suit No. 1322, and dismissed the appeals of defendants where appropriate, with costs as specified.
Holding and Implications
Holding (core rulings):
- The auction sale in Darkhast No. 347 of 1905 was void because the wrong person (Sada) was brought on record as heir and legal representative of the deceased Gundi; the true heirs were his daughters Bai Gita and Tanu.
- Suit No. 1894 of 1937: The plaintiff's claim against defendants 2–5 with respect to the house at Mangalwedha is barred by limitation under Art. 134 (those alienees were entitled to the benefit of Art. 134). The trial court's decree is confirmed except that the award of Rs. 25 compensation (and the plaintiff's appeal for Rs. 1,000) is deleted/dismissed. F.A. No. 360 of 1948 is dismissed (no order as to costs); F.A. No. 362 of 1948 is dismissed with costs.
- Suit No. 1322 of 1938: The plaintiff is entitled to a decree for redemption against defendants 5, 6, 7 and 9 and against defendants 8 (e, f and g) as representing the estate of deceased defendant 8. F.A. No. 363 of 1948 is allowed with costs as to those defendants. F.A. No. 361 of 1948 (by defendants 1 and 3) is dismissed with costs.
- Civil Applicants Nos. 1440 of 1948 and 1287 of 1950 are dismissed with costs.
- Tanu (defendant 13 in Suit No. 1894 / defendant 6 in Suit No. 1322) died leaving Bai Gita as her heir; decrees are modified to be in favour of Bai Gita alone.
Implications:
- The decision applies existing principles about the interplay between Art. 134 and Art. 148 of the Limitation Act: whether a mortgagor's redemption suit is barred depends on whether a transferee from the mortgagee qualifies for protection under Art. 134 (bona fide purchaser for value without notice and where the mortgagee purported to convey a larger interest).
- No new legal principle or precedent is announced beyond the application of the authorities cited (Tairamiya; Keshav Raghunath; Vishvanath; Skinner; Mulchand) to the facts of these cases. The consequences are primarily the determinate effects on the parties: certain transfers defeat the plaintiff's redemption claim by operation of Art. 134, whereas in the absence of proof of bona fides/absence of notice the plaintiff's redemption remedy under Art. 148 remains available.
V.B.B
Order accordingly.
Bhagwati, J.:— These two sets of appeals arise out of the judgments of the learned Special Judge of the Special Tribunal Court at Mangalwedha. Suits Nos. 1894 of 1937 and 1322 of 1938 were filed by one Bai Gita, the daughter of Gundi against the firm of Jaynarayan Jagannath Marwadi, the partners of that firm and the alienees from the firm of certain properties and lands situate at Mangalwedha. One Appa had three sons, Gundi, Rama and Sada. There was a severance of joint status between the members of the joint family in year 1892 and certain documents were executed by and between the parties. Gundi thereafter in years 1898, 1900 and 1901 executed mortgages in favour of defendant 1 to secure repayment of certain monies due and owing by him to the firm. He thus mortgaged seven lands to defendant 1 on three several dates in the years 1898-1900 and 1901, and his two brothers Earn a and Sada were parties to these documents in their capacity as sureties. Gundi also executed a possessory mortgage of a house at Mangalwedha in favour of defendant 1 for the consideration of Rs. 25 in the year 1901. Gundi, it appears, was indebted to several parties, and in execution of a money decree obtained against him by a creditor of his-an auction sale was held of the house as well as the seven lands in darkhast No. 347 of 1905. Defendant 1 purchased the house and the seven, lands at the said auction sale. What had happened, however, in these execution proceedings was that Gundi having died in year 1904 the decree-holder had brought in Sada as the heir and legal representative of Gundi in the execution proceedings and it was after issuing notice to Sada that the auction sale was held. Gundi had left him surviving two daughters, Bai Gita, the plaintiff and one Tanu, who was defendant 6 and defendant 13 respectively in the above suits. But neither of them was brought on the record as the heir and legal representative of the deceased Gundi. This was the state of the record when the auction sale was held and defendant 1 purchased this house and the seven lands at Mangalwedha at the court sale. Defendant 1 entered into possession of the properties thus purchased by it. The house at Mangalwedha was sold by defendant 1 to defendants 2 to 5 in Suit No. 1894 of 1937 by a conveyance dated 19-4-1912. Five lands out of the seven lands at Mangalwedha were sold by defendant 1 to defendants 5, 6, 7, 8 and 9 in Suit No. 1822 of 1938 by several conveyances dating, from 11-4-1919 to 26-4-1922. The remaining two lands continued in the possession of defendant 1 and defendant 3 who was the partner in defendant 1. The two suits above named were filed by the plaintiff Bai Gita, the daughter of Gundi, who was the common plaintiff in both these suits against defendant 1 the firm, its partners and the respective purchasers of the house and the lands at Mangalwedha in the first instance for accounts of the several mortgage transactions but subsequently under the order of the Appeal Court for redemption of the property and the lands.
2. Defendant 1 who was the common defendant in both these suits contested the suits, contending inter alia that the auction sale was validly held and that it acquired a good title to the property as well as the lands which it purchased at the court sale, and that in any event the plaintiff's suits were barred under Art. 12, Limitation Act or under Art. 134, Limitation Act.
3. The learned trial Judge held in Suit No. 1894 of 1937 that so far as defendant 1 was concerned the suit property was free from the mortgage in favour of defendant 1 but the plaintiff was not entitled to get possession of the property from defendants 2 to 5 inasmuch as her claim against them was barred by the law of limitation under Art. 134, Limitation Act. He, however, allowed to the plaintiff compensation in the sum of Rs. 25 against defendant 1, for loss of the mortgaged property. Defendant 1 filed an appeal being F.A No. 360 of 1948 against this decision of the learned trial Judge demurring against the award of compensation in the sum of Rs. 25. The plaintiff in her turn filed F.A No. 362 of 1948 claiming Rs. 1000 as and by way of compensation for loss of the mortgaged property. These are the two first appeals from the decision of the learned Judge in Suit No. 1894 of 1987.
4. In suit No. 1322 of 1938 the learned Judge held that the plaintiff's claim against defendants 5, 6, 7, 8 and 9 was barred by the law of limitation under Art. 134, Limitation Act, and the plaintiff's suit in that behalf was dismissed. In regard to defendants 1 and 3, the learned Judge held that the mortgages in suit had been satisfied and that the plaintiff and her sister Tanu were entitled to take possession of the two properties which had remained with defendant 1 and passed a decree accordingly in favour of the plaintiff. Defendants 1 and 3 filed F.A No. 361 of 1948 in regard to the decree passed by the learned Judge against them in respect of the two properties which had remained with defendant 1. The plaintiff in her turn filed F.A No. 363 of 1948, contending that she was entitled to a decree also against defendants 5, 6, 7, 8 and 9 in regard to the lands which had been conveyed to them by defendant 1 as aforementioned.
5. All these four appeals have come before us for hearing and final disposal. As they are capable of being disposed of by one judgment, they have been heard together and this judgment will cover all the said appeals.
6. The two points which have been urged before us by the learned advocates for the plaintiff as well as defendant 1 are: (1) Whether Gundi, Rama and Sada were separated co-parceners or were undivided in interest and (2) whether the suit is barred by the law of limitation.
7. In regard to the first point, there are two receipts which have been produced in the Court below evidencing partition as of 1-9-1892. These receipts are not registered, but the non registration thereof would be a bar if the terms of the partition were sought to be proved by the parties. These receipts, however, have been relied upon for the purpose of proving the collateral fact of partition itself and they would certainly be admissible for that purpose even though they have not been registered. These receipts clearly show that there was a severance of joint status between the members of the joint family then existing and that in any event there was a severance of joint status between the three brothers Gundi, Rama and Sada. There is the further fact that in the three mortgage deeds which were executed by Gundi in favour of defendant 1 in the years 1898, 1900 and 1901 his two brothers Rama and Sada stood as sureties for repayment, of the debts by him. This would not then be the case if Gundi, Rama and Sada were members of a joint and undivided Hindu family having no separate property of their own. This fact also goes to support the position that there was a severance of joint status between the three brothers and that Gundi when he died was a separated member of the family and was not joint with the other brothers of his, Rama and Sada.
8. The next point which has been urged is whether the suit is barred by the law of limitation. Before we go to the respective articles which have been discussed in this behalf, it is necessary to point out that if Gundi died as a separated member of the family, there would be no question of survivorship as between him and his brothers Rama and Sada, but whatever his estate was would devolve on his daughters Bai Gita and Tanu as his heirs. If any decree which was passed against Gundi had to be executed after his death, Sada would not be the heir and legal representative of Gundi but Bai Gita and Tanu would be the heirs and legal representatives of his. That being so, the execution proceedings taken by the decree-holder in darkhast No. 347 of 1905 were vitiated in so far as Sada was brought on the record as the heir and legal representative of Gundi and not Bai Gita and Tanu or either of them. The execution proceedings were therefore, bad, the auction sale which was held in the said execution proceedings was void and not merely voidable, and, therefore, there was no question of the application of Art. 12, Limitation Act which prescribes one year's period of limitation to set aside a sale in execution of a decree of a civil Court the starting period for the purpose of limitation being when line sale is confirmed. It is not necessary to adopt any proceedings to set aside a sale in execution of a decree of a civil Court which is void. It is only in those cases where a sale is voidable that it would be necessary for a party to avoid the sale by adopting proper proceedings in that behalf. The auction sale which was held in Darkast No. 347 of 1905 was, as we have stated before, void, and therefore, Art. 12, Limitation Act, would not be a bar to the suits which were ultimately filed by the plaintiff in the Special Tribunal Court at Mangalwedha.
9. The question, however, remains as to whether Art. 134, Limitation Act, has a any application to the facts of the cases before us. It was urged by Mr. B.N Gokhale for the plaintiff that these being suits for redemption the proper article to apply would be Act, 148, Limitation Act, which prescribes sixty years' period of limitation for suits against mortgagees to redeem or to recover possession of immoveable property mortgaged, the period of limitation to commence from the date when the right to redeem or to recover possession accrues. It was urged that these being suits for redemption of the mortgaged property and lands against defendant 1 who was the mortgagee and against the several other defendants in both these suits who were the transferees from the mortgagee deriving as such no better title than the mortgagee itself, the suits were within time under Art. 148, Limitation Act. It was, however, contended on the other side that so far as there had been alienations made by the mortgagee (defendant 1) of the suit house and five of the suit lands in favour of the several defendants in both these suits, the suits fell within the purview of Art. 134, Limitation Act, which prescribes a period of twelve years for suits to recover possession of immoveable property conveyed, mortgaged and afterwards transferred by the mortgagee for a valuable consideration, the period of limitation commencing, so far as the law applicable to the Sangli State then stood, from the date of the transfer. These are the two rival contentions which have been urged before us. Normally speaking a suit for redemption of a mortgaged property would be governed by Art. 148, Limitation Act, and a mortgagee or a transferee from the mortgagee of his (mortgagee's) rights would not be able to contend that any lesser period of limitation than sixty years would apply to a suit for redemption. section 59a, t.p act, includes within the description of “mortgagees” also persons deriving title from the mortgagees and the transferees of the mortgagee's rights would be in no better position than the mortgagees themselves. The complication, however, arises in those cases where the mortgagees transfer or convey not merely their mortgagees' interest in the mortgaged property but purport to convey to transferees a larger interest than what they have got under their mortgage deeds. In those cases it falls to be considered what article of the limitation act would apply when a mortgagor files a suit for redemption of the mortgaged property against the mortgagee impleading the transferee or transferees as party defendants to such a suit for redemption. Would the transferee then be able to contend that he being a transferee for consideration without notice of the mortgage should be protected as against the mortgagor or would the mortgagor in that event be able to contend successfully that whatever might have been done by the mortgagee qua the transferee, the transferee could not get any better title than the mortgagee himself and would, therefore, be liable to have a decree for redemption passed against him in regard to the property which was transferred to him by the mortgagee? This is the moot point on which several cases were cited before us and which we shall now proceed to consider.
10. In Tairamiya v. Shibelisaheb, 44 Bom. 614, the appeal Court consisting of Sir Norman Macleod and Heaton J. had before them a case where certain lands had been mortgaged with possession by the plaintiff's father. In 1883 the mortgagee had mortgaged the lands to the predecessor-in-title of the defendants representing himself as absolute owner. The plaintiffs sued for redemption in the year 1916 and the defendants contended that the suit was barred under Art. 134, Limitation Act. The appeal Court held that the suit was not barred as on the facts the proper article applicable to the case was Art. 148 and not Art. 134, Limitation Act. The learned Chief Justice in the course of his judgment observed that a suit to recover possession was not the same thing as a suit to redeem, and a mortgagor's right to redeem, the period of limitation for which was 60 years under Art. 148, would not be defeated merely because his mortgagee transferred the mortgage to another person. The learned Chief Justice there drew the distinction between a suit for possession under Art. 134 and a suit for redemption under Art. 148 and observed that merely because the mortgagee had transferred the mortgage bond to another person a suit for redemption did not cease to be one for redemption and governed by Art. 148, Limitation Act.
11. The next case cited before us was Keshav Raghunath v. Gafurkhan, 46 Bom. 903, where it was held that when a mortgagee sold the mortgaged property as an ostensible owner and there was valuable consideration for the sale, the right of the purchaser became unassailable by the mortgagor by the lapse of twelve years from the date of the purchase under Art. 134, Limitation Act. In this case the property had been mortgaged with possession in 1891 by one Ganpat for himself and as guardian of his minor nephew Krishna to defendant 1's father Martand. The equity of redemption eventually came to two girls Kondi and Niri from whom the plaintiff purchased in 1918 Martand had sold the property in 1902 to defendant 2 purporting to be the owner thereof and defendant 2 had since been in possession. Defendant 2 had in fact within a few months of the transfer acquired the knowledge that Martand had been a mortgagee and not an owner. He stated that he asked Martand why he sold the property if he was only a mortgagee and Martand said that he had become the owner in pursuance of an agreement, which he promised to give to defendant 2 later on. The learned Judges came to the conclusion that the mortgagee had sold the mortgaged property as an ostensible owner, that there was valuable consideration for the sale and that, therefore, the right of the purchaser became unassailable by the mortgagor by the lapse of twelve years from the date of the purchase. The mortgagee might be dishonest, the purchaser might not make any enquiry of his vendor's title, the mortgagor might be ignorant of the sale of the property by the mortgagee but it was held that these facts no longer affected the rights of the purchaser who had given valuable consideration and that the plaintiff's suit must, therefore, fail. The ratio of this decision was that the mortgagee purported to convey the whole of the mortgaged property as the ostensible owner thereof for valuable consideration and this was held to bring the case within Art. 134, Limitation Act, which in terms applies to suits for recovery of possession of immoveable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration. It would not be a mere transfer by the mortgagee of his interest in the mortgaged property, but it would be a case of transfer of the whole of the mortgaged property by the mortgagee purporting to do so as the absolute owner thereof, the concept of ownership embracing not merely his (mortgages's) rights but also the equity of redemption of the mortgagor.
12. Our attention was further drawn to a case reported in Vishvanath v. Tukaram 27 Bom. L.R 661, where it was held that Art. 134, Limitation Act, does not apply to a suit by a mortgagor to recover possession of the mortgaged property from an alienee of the mortgagee who has taken with notice of the mortgage and that such a suit is governed by Art. 148 of the Act. The ratio of this case is quite clear and it lays down that if the alienee from the mortgagee takes the mortgaged property with notice of the mortgage the transaction would not be one of alienation or transfer of the whole of the property by the mortgagee to the alienee, even though it might ostensibly purport to be a transfer of the whole interest in the property. The fact of the notice would make all the difference in the case and it would be open to the Court to come to the conclusion that the real nature of the transaction is that of the transfer of the mortgagee's interest in the property and no more. This case emphasizes the point of view that it is a bona fide transferee without notice and for valuable consideration who would be protected against the mortgagor who seeks to redeem the mortgaged property. In that case it would not be a question of a mere transfer of his (mortgagee's) rights by the mortgagee in the property. It would be a question of the mortgages as the ostensible owner of the property conveying or transferring to the alienee the whole of the interest in the property inclusive not only of the mortgagee's rights but also of the equity of redemption. It would be a complete title passing to the alienee who of course takes it for a valuable consideration and without notice of the property being liable to be redeemed by the mortgagor.
13. The position which has been enunciated above has been clarified in the decision of their Lordships of the Privy Council reported in Skinner v. Naunihal Singh, 31 Bom. L.R 854. It is not necessary to go into the detailed facts of the case, but it would suffice to quote the observations which have been made by their Lordships of the Privy Council and which have been summarised in the head note:
“The transfer of property mortgaged contemplated by Art. 134, Limitation Act, 1908, is admittedly something other than express transfer of the original mortgage. The article contemplates a transfer by a mortgagee purporting, to transfer a larger Interest than that given by the mortgage or at any rate an interest unencumbered by a mortgage. The article is not however, limited in its application to cases where the mortgagee, transfers the property mortgaged while still ostensibly a mortgagee, nor to cases where the mortgagee transfers possession which he had obtained qua mortgagee. It is immaterial, for the purpose of Art. 134, that the mortgagee should have thought he was absolute owner if in fact he was mortgagee and immaterial whether he got possession before, under or after the mortgage if in fact he purported to transfer the property to the transferee Article 134 does not protect the transferee of a mortgage by express transfer, nor does it protect a person who has taken a transfer only of a mortgage but has taken it without his knowledge, mistakingly supposing that he was getting something better.”
14. The true principle, therefore, is that if an alienee or a transferee from the mortgagee is in a position to establish that he took the mortgaged property for valuable consideration and without notice of the fact that what the mortgagee was conveying to him was merely the mortgagee's right, title and interest therein, but that the transfer or conveyance to him of the property was under circumstances which would lead to the conclusion that the mortgagee was transferring to him not merely the mortgagee's rights but a larger interest than that given by the mortgage or at any rate an interest unencumbered by the mortgage he (the transferee or alienee) would be protected, and he would be entitled to the benefit of Art. 134 Limitation Act.
15. Applying these principles to the facts of the cases before us it appears that so far as the suit property at Mangalwedha, the subject-matter of Suit No. 1894 of 1937, is concerned, the mortgagee purported to transfer not merely the mortgagee's rights therein but an interest larger than that given by the mortgage or at any rate an interest unencumbered by the mortgage. It was described in the conveyance itself that the right, title and interest of the mortgagee, viz. the malaki and the vahivat both were being transferred to the purchasers defendants 2 to 5 in that suit and, therefore, defendants 2 to 5 were entitled to the benefit of Art. 134, Limitation Act. The learned Judge's decision in that behalf was, in our opinion, perfectly right and the plaintiff's suit against defendants 2 to 5 in respect of the house at Mangalwedha was barred by the law of limitation.
16. We, however, do not see how the learned Judge ever came to the conclusion that the plaintiff was entitled to any compensation in respect of the suit property. There is no justification whatever for holding that the plaintiff was entitled to any compensation for the loss of the mortgaged property. The property was declared by the learned Judge to be free from defendant 1's mortgage of Rs. 25 of the year 1901, and if under the circumstances obtaining in the case the plaintiff's claim against the alienees was barred by the law of limitation, that was certainly no circumstance which could be laid at the door of defendant 1 so as to entitle the plaintiff to any compensation against him. Similarly there is no justification for the plaintiff's appeal where she has claimed that she is entitled to Rs. 1,000 by way of such compensation. If there was no basis for the award of compensation in the paltry sum of Rs. 25, there was certainly no justification whatever for the claim which the plaintiff made for compensation for any larger amount. In our opinion, therefore, both the award of Rs. 25 as and by way of compensation to the plaintiff and the plaintiff's claim in the appeal for higher compensation in the sum of Rs. 1,000 are unjustified, and the decree of the Court below so far as Suit No. 1894 of 1937 is concerned will be confirmed subject to this modification that the award of compensation of Rs. 25 to the plaintiff and defendant 6, since dead, from defendant 1 for the loss of the mortgaged property will be deleted therefrom. F.A No. 360 of 1948 will be dismissed and there will be no order as to the costs of that appeal. F.A No. 362 of 1948 will, of course, be dismissed with costs.
17. Turning now to the other set of appeals and the lands which have been alienated by the mortgagee in favour of defendants 5 to 9 in Suit No. 1322 of 1938, the position is that none of these parties appeared in the Court below to contest the plaintiff's claim. The sale deeds in their favour were also not produced, nor was there any attempt on their part to bring before the Court the circumstances under which the alienations came to be made by the mortgagee in their favour. Having regard to the principles which we have enunciated above, there is nothing to show that so far as the plaintiff's claim for redemption of the properties alienated in their favour is concerned, the case is taken out of the operation of Art. 148, Limitation Act, which would normally apply to suits for redemption of the mortgaged property. If these defendants or any of them wanted to prove the circumstances which would bring the plaintiff's suit within the purview of Art. 134, Limitation Act, it was incumbent on them to aver these facts and circumstances, to bring them into issue and to properly prove the same. Nothing of the sort was, however, done by them, with the result that the plaintiff would be entitled to a decree for redemption as against defendants 5, 6, 7, 8 and 9 in regard to the properties alienated by defendant 1 in their favour under the various conveyances between 11-4-1919 and 26-4-1922. Mr. Sukhtankar appearing for respondent 8 (e, f and g) drew our attention to the fact that defendant 7 had transferred his interest in the property alienated in his favour to defendant 8 that defendant 8 had died and defendants 8 (a, b, c, d, e, f and g) had been brought on the record as heirs and legal representatives of defendant 8, that only defendants 8 (e, f and g) were served and not defendants 8 (a, b, c and d), that there could not be a decree for redemption against only a few of the heirs and legal representatives of the deceased defendant 8 and that, therefore, the plaintiff was not entitled to any decree for redemption in regard to the property which had been alienated in favour of defendant 7 and defendant 8 by the mortgagee. The answer given by Mr. B.N Gokhale to this argument of Mr. Sukhtankar is contained in the observations of B.J Wadia J. in Mulchand v. Jairamdas, 37 Bom. L.R 288, where the learned Judge held that under O. 22, R. 4, Civil P.C, 1908, it was sufficient if only one out of several legal representatives of a deceased party was brought on the record and that it was not necessary that all of them should be impleaded. Since defendants 8 (a, b, c, d, e, f and g) were brought on the record as representing the estate of the deceased defendant 8 the liability under the decree which would be passed against defendants 8 (e, f and g) who have been served and who appeared before us would be only a liability in their representative character as representing the estate of the deceased defendant 8 and it, therefore, does not matter if defendants 8 (a, b, c and d) have not been served and may have to be struck off from the record of the appeal. Under the circumstances, therefore, the appeal filed by the plaintiff against these defendants viz., F.A No. 363 of 1948, will be allowed and there will be a decree in favour of the plaintiff against defendants 5, 6, 7, 9 and 8 (e, f and g) as representing the estate of the deceased defendant 8 for handing over possession of the properties which were the subject-matters of the alienations by the mortgagee in favour of defendants 5, 6, 7, 8 and 9 on the various dates above mentioned with costs throughout so far as the plaintiff's claim against them is concerned.
18. In regard to F.A No. 361 of 1948 the appeal will have to be dismissed with costs.
19. Civil Applicants Nos. 1440 of 1948 and 1287 of 1950 will also be dismissed with costs.
20. Tanu, defendant 13 in Suit No. 1894 of 1937 and defendant 6 in Suit No. 1322 of 1938 has since died leaving Bai Gita as her heir and legal representative. The decrees passed by the lower Court will, therefore, be modified in so far as they will now be in favour of Bai Gita, the plaintiff, alone.
V.B.B
Order accordingly.
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