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Sm. Subhadramani Dhal And Others v. Jaganath Patra And Others

Orissa High Court
Feb 27, 1974
Judgment
Subsequent
References
CaseIQ
Case Information
CITATION CODES
citation codes
CASE NO.

Second Appeal No. 223 of 1970

JUDGES

Hon'ble Mr. Justice Bijay Kishore Ray

ACTS

Article 61 (b) of the Limitation Act, 1963. This article corresponds to Article 134 of the old Limitation Act, 1908.

Article 134 of the old Limitation Act (same as Article 61 (b) of new Limitation Act)

provisions contained in Section 17 of the Orissa Money-Lenders Act

Section 17 of the Orissa Money-Lenders Act.

Article 61 (b) of the Limitation Act, 1963

Article 134 of the old Limitation Act

Article 61 of the Limitation Act.11.

Article 61 (a) of Limitation Act, 1963,

Article 61 (b) of the Limitation Act

Article 61 (b) of new Limitation Act)

Article 61 (b) of Limitation Act

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Factual and Procedural Background

This appeal was brought by defendants 7, 8 and 11 against the confirming decision of the Sub-Judge, Balasore, arising from a suit for redemption of a mortgage by conditional sale. The material facts, as found in the opinion, are:

  • On 5-9-1930 Ananta Patra executed Ex. 1, a mortgage by conditional sale, of 1.27 acres (A1.27 decimals) in favour of Baidyanath for Rs. 100. The deed contained a stipulation that if the mortgage amount was repaid between Magh to Chaitra of any year before 1342 V.S (1935) the mortgagee would reconvey; otherwise, the sale would become absolute after that period.
  • Mortgage dues were not repaid within the stipulated period, and by operation of time and subsequent events the mortgagee treated the property as absolute.
  • About 20 years later the mortgagee (Baidyanath) sold 39 decimals to Kishore Mohan by registered sale deed dated 6-1-54 (Ex. A/1) for Rs. 200, and sold the remaining 88 decimals to the father of defendants 9 and 10 (not directly in dispute in this appeal).
  • Kishore Mohan then sold the same 39 decimals to Pratima Devi by registered sale deed dated 30-6-58 (Ex. B/1) for Rs. 99 and delivered possession. Pratima was in possession thereafter; upon her death her husband (defendant No. 11) and two minor daughters (defendants 7 and 8) succeeded to her interest and possession.
  • The plaintiffs asserted they tendered the mortgage money to the mortgagee before he began selling but the mortgagee refused to accept it; they also asserted that the mortgage was extinguished after 15 years from the date of mortgage under Section 17 of the Orissa Money-Lenders Act and therefore they were entitled to recover possession.
  • The courts below held Ex. 1 to be a mortgage by conditional sale and held that the mortgage was statutorily redeemed in 1945 after the lapse of 15 years from 5-9-1930 under Section 17 of the Orissa Money-Lenders Act; but they rejected the plea of limitation under Article 61(a) by treating the suit as one under Article 61(a) because 30 years had not elapsed from 5-9-1945 when the right to recover possession accrued.
  • The only contention before the court on this appeal (as pressed by Mr. Murty) was that the suit filed on 14-10-1966 is barred under Article 61(b) of the Limitation Act, 1963 (which corresponds to Article 134 of the old Limitation Act, 1908).

Legal Issues Presented

  1. Whether the suit for recovery of possession filed on 14-10-1966 is barred by limitation under Article 61(b) of the Limitation Act, 1963 (i.e., whether 12 years had elapsed since the plaintiffs became aware of the transfer by the mortgagee of a larger interest than he was competent to transfer).
  2. Whether the deed Ex. 1 is a mortgage by conditional sale or an out-and-out sale (noted in the opinion but not contested before the court on appeal).

Arguments of the Parties

Plaintiffs' Case

  • Plaintiffs asserted they tendered the mortgage money to the mortgagee before he began selling, but the mortgagee refused to accept it.
  • Plaintiffs relied on the statutory extinguishment of the mortgage after 15 years from the date of mortgage under Section 17 of the Orissa Money-Lenders Act to claim entitlement to recover possession.
  • Implicitly, plaintiffs relied on Article 61(a) as the applicable limitation provision when the courts below considered the suit.

Defendants' / Appellants' Case

  • Defendants contended Ex. 1 was not a mortgage by conditional sale but an outright sale, meaning the mortgagee had absolute title and conveyed absolute title to subsequent purchasers.
  • Defendants produced sale deeds: Ex. A/1 (Baidyanath to Kishore Mohan, 6-1-54) and Ex. B/1 (Kishore Mohan to Pratima Devi, 30-6-58), and relied on mutation in landlord's sherista and possession to show the transferees acquired absolute title and have been in possession.
  • Some defendants pleaded limitation (the opinion notes that such a plea was raised by some defendants, though not expressly found in the appellants' written statements).
  • Defendants argued that Article 61(b) applies (12-year period) because the mortgagee purported to transfer a larger interest than he held and the transferees remained in possession; hence the plaintiffs' suit should be barred if the transfer was known to plaintiffs more than 12 years before suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
James Skinner v. Naunihal Singh, (1929) 56 Ind App 192 : AIR 1929 PC 158 Explains that the transfer contemplated by Article 134 (old Limitation Act) / Article 61(b) is not merely an express transfer of the original mortgage but a transfer by the mortgagee purporting to transfer a larger interest than the mortgagee held. The court relied on this authority to construe Article 61(b) as applying where the mortgagee transfers a larger interest than he was competent to transfer; it informed the interpretation of what constitutes the relevant "transfer" under Article 61(b).
Nani Bai v. Gita Bai Kom Rama Gunge, AIR 1958 SC 706 Affirms that to attract Article 134 (old) / Article 61(b), the defendant must affirmatively prove the mortgagee or his successor transferred a larger interest than the mortgage permitted. The court cited this to state that defendants bear the affirmative burden to prove the mortgagee transferred a larger interest; this helped structure the parties' burdens in the present case.
Gurbinder Singh v. Lal Singh, AIR 1965 SC 1553 Establishes that adverse possession of successive transferees can be tacked together to constitute the requisite continuous adverse possession period. The court used this principle to note that adverse possession by successive purchasers (Kishore Mohan then Pratima and successors) can be aggregated to satisfy the 12-year possession requirement under Article 61(b).
Khadi Khan v. Murad Khan, AIR 1942 Peshawar 39 Holds that the initial onus lies on plaintiffs to prove their case is within limitation and that facts within special knowledge must be proved by the person having that knowledge. The court relied on this to explain that plaintiffs must prove they became aware of the transfer within 12 years of suit to avoid the bar of Article 61(b); the onus of proof on limitation rests initially on the plaintiff.
Radhanath's case, (1871) 14 Moo Ind App 1 (Privy Council) States that Article 61(b) (Article 134 old) is a special, stringent article that cuts down the period a mortgagor may have against a mortgagee; the claimant of the benefit must clearly show he is within the Article's protection. The court invoked this to emphasize that plaintiffs seeking the benefit of Article 61(b) must clearly and distinctly prove they fall within its protection by showing the date of knowledge within 12 years.
Krishnaswamy v. Sabaratnam Chettiar, (1938) 1 Mad LJ 101 : AIR 1938 Mad 384 Supportive authority for the proposition that the claimant must discharge the onus of proving limitation facts where relevant. Used by the court to reinforce the principle that plaintiffs must discharge their initial onus to show the suit is within the 12-year period from knowledge of the transfer.
Raghunandan Misra v. Mahadeo, AIR 1933 Oudh 38 Authority cited in support of the principle that a plaintiff must discharge the onus regarding limitation where specialized proof is required. Cited by the court as further support for the allocation of onus on plaintiffs to prove they learned of the transfer within 12 years to avoid the bar of Article 61(b).

Court's Reasoning and Analysis

The court's analysis proceeded in stages and focused on the correct application of Article 61(b) of the Limitation Act to the facts found by the courts below.

  1. Characterization of Ex. 1: The court accepted the concurrent finding of the courts below that Ex. 1 was a mortgage by conditional sale and that the mortgage was statutorily extinguished after 15 years from 5-9-1930 under Section 17 of the Orissa Money-Lenders Act. Mr. Murty (counsel) no longer challenged that concurrent finding, so the court treated that finding as final on the nature of Ex. 1.
  2. Elements of Article 61(b): The court set out the elements necessary to invoke Article 61(b):
    • (a) The property was mortgaged;
    • (b) Subsequent to the mortgage, the mortgagee transferred a larger interest than justified by the mortgage for valuable consideration;
    • (c) The transferee continued in possession for 12 continuous years or more since the date when the transfer became known to the plaintiffs (note that successive transferees' possession may be tacked).
  3. Application of elements (a) and (b): The defendants discharged their initial onus by proving the sale deeds Ex. A/1 and Ex. B/1. The court found the recitals in Ex. A/1 (Baidyanath's recital of being absolute owner and having mutated his name in the landlord's register) and the comparative consideration (Rs. 200 for 39 decimals versus Rs. 100 mortgage for 1.27 acres) indicated the mortgagee had purported to transfer a larger interest and that the sale was for valuable consideration. Similarly, Ex. B/1's recitals corroborated Kishore Mohan's transfer of an absolute title to Pratima, and mutation and payment of rent by transferees reinforced the conclusion that a larger interest had been conveyed. Hence the court held the second element was satisfied.
  4. Onus and the third element (knowledge): Having accepted the defendants discharged the initial onus, the court explained the burden shifts to the plaintiffs to prove that they became aware of the transfer under Ex. A/1 within 12 years of filing suit. The court relied on authorities (including Khadi Khan and Radhanath) to explain that Article 61(b) is a stringent provision and that plaintiffs seeking its protective ambit must clearly establish they fall within it. The court criticized the lower appellate court for failing to find the date when plaintiffs learned of the transfer and held that the plaintiffs had not discharged the necessary onus to show the suit was within the 12-year period measured from knowledge of the transfer.
  5. Remedy and remand: Because the limitation question had not been examined in the correct legal perspective and the plaintiffs had not been given the opportunity to discharge their onus on the date of knowledge, the court remanded the case to the trial court. The trial court was directed first to give plaintiffs the opportunity to adduce evidence that they learned of Ex. A/1 within 12 years of the suit, and to permit defendants to rebut that evidence, after which the trial court should determine the actual date of plaintiffs' knowledge and then decide the limitation question and the suit finally.
  6. Finality of other findings: In remanding, the court made clear that its findings as to the other ingredients of Article 61(b) (i.e., that a larger interest was transferred for valuable consideration and the nature of Ex. 1 as a mortgage by conditional sale) are final and not to be reopened by the trial court on remand.

Holding and Implications

Holding:

The court's operative direction was to remand the case for a limited purpose. The court therefore REMANDED THE SUIT TO THE TRIAL COURT with directions to determine, after giving both parties an opportunity to adduce evidence and rebuttal, the precise date on which the plaintiffs became aware of the transfer under Ex. A/1 and then to decide the question of limitation under Article 61(b) of the Limitation Act, 1963 and finally dispose of the suit.

Immediate implications and consequences:

  • The trial court must first allow plaintiffs to discharge their onus of proving they became aware of the transfer within 12 years prior to suit and permit defendants to rebut; only thereafter should the trial court finally adjudicate the limitation issue and the suit.
  • The appellate court's findings that Ex. 1 is a mortgage by conditional sale and that the mortgagee transferred a larger interest for valuable consideration (as regards Ex. A/1 and Ex. B/1) are final and are not to be reopened on remand.
  • Costs were ordered to abide the result (i.e., no immediate order as to costs; costs to follow the ultimate outcome).
  • The court did not lay down any broader or novel precedent beyond the application of established principles concerning Article 61(b), burdens of proof on limitation, and the tacking of possession; the decision primarily orders a limited retrial/remand to resolve the specific evidentiary deficiency (date of plaintiffs' knowledge) identified by the court.

Order accordingly: the suit is remanded for fresh disposal on the limitation issue only; other findings are final; costs to abide the result.

Show all summary ...

1. Defendants 7, 8 and 11 are the appellants. This appeal is from the confirming decision of the Sub-Judge, Balasore and arises out of a suit for redemption of a mortgage by conditional sale.

2. One Ananta Patra was admittedly the owner of the suit properties of A1.27 decimals. He executed a mortgage by conditional sale in respect thereof on 5-9-1930 in favour of one Baidyanath. This mortgage deed is Ex. 1. Ananta Patra ostensibly sold the mortgaged property for Rs. 100 on condition that if the mortgage amount was repaid between Magh to Chaitra of any year before 1342 V.S the mortgagee will reconvey the properties. 1342 V.S corresponds to 1935. Thus, the stipulation in Ex. 1 was that if repayment was not made between Magh to Chaitra of 1935 the sale shall become absolute thereafter. Mortgage dues were not repaid within the stipulated period. About 20 years thereafter, the mortgagee sold 39 decimals out of it to Kishore Mohan for a valuable consideration of Rs. 200 under a registered sale deed dated 6-1-54 (Ex. A/1). He also sold the balance 88 decimals to the father of defendants 9 and 10. We are not concerned in this appeal with this second sale regarding 88 decimals. Kishore Mohan, who is the father of defendants 5 and 6, in his turn, sold the same 39 decimals for a valuable consideration of Rs. 99 to Pratima Devi by a registered sale deed dated 30-6-58 (Ex. B/1) and delivered possession. Since then Pratima Devi became owner in possession of 39 decimals. Sometime thereafter she died and was succeeded by her husband, defendant No. 11 and defendants 7 and 8 who are her two minor daughters through defendant No. 11. The plaintiff's case is that they tendered mortgage money to the mortgagee before he started selling but he refused to accept the same. At any rate the mortgage was extinguished upon lapse of 15 years from the date of mortgage by reason of the statutory provisions contained in Section 17 of the Orissa Money-Lenders Act and the plaintiffs are entitled to recover possession.

3. The case of the defendants is that the transaction made by Ex. 1 is not a mortgage by conditional sale but is an out and out sale. Baidyanath possessed the land in his own right and conveyed his absolute title to 39 decimals out of it to Kishori Mohan on 6-1-54 and the balance 88 decimals to defendants 9 and 10. Kishore Mohan thus acquired absolute title and possession. He, in his turn, passed an absolute title to 39 decimals to Pratima Devi on 30-6-58 by a registered sale deed for valuable consideration. The plea of limitation was taken by some of the defendants though that is not to be expressly found in the written statements of the appellants. After purchase, the defendants mutated their names in the landlord's sheresta and possessed the suit land in their own absolute right. They had no knowledge of the prior mortgage at the time of their purchase. One of the issues involved in this suit was whether Ex. 1 was a mortgage by conditional sale or was an out and out sale. Both the courts have found that Ex. 1 was a deed of mortgage by conditional sale and the mortgage was statutorily redeemed in 1945 after lapse of 15 years from the date of mortgage i.e from 5-9-30, under Section 17 of the Orissa Money-Lenders Act. Treating the suit as a suit for recovery of possession under Article 61 (a) of Limitation Act, 1963, the plea of limitation was rejected, on the ground that 30 years had not lapsed from 5-9-45 when right to recover possession accrued to the plaintiffs.

4. Mr. Murty no longer challenges the concurrent finding of the courts below regarding the nature of the transaction evidenced by Ex. 1 that it was a mortgage by conditional sale. The only contention urged by him is that the suit which was filed on 14-10-66 is barred under Article 61 (b) of the Limitation Act, 1963. This article corresponds to Article 134 of the old Limitation Act, 1908. The entire article, (though we are concerned with clause (b) thereof) is extracted hereinbelow:—

“61. By a mortgagor- (a) to redeem or recover possession of immovable property mortgaged. thirty years When the right to redeem or to recover possession accrues. (b) to recover possession of immovable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration. twelve years When the transfer becomes known to plaintiff. (c) to recover surplus collections received by the mortgagee after the mortgage has been satisfied. three years When the mortgagor re-enters on the mortgaged property.”

5. The transfer of property mortgaged as contemplated in Article 61 (b) means a transfer of a larger interest than the transferor was competent to transfer. The relative difference in scope of clauses (a) and (b) of Article 61 points the same way. Clause (a) covers suits to redeem or recover possession of immovable property mortgaged against the mortgagee or his successor-in-interest or assign, while clause (b) relates only to suits to recover possession against a transferee for valuable consideration from the mortgagee. The period of limitation under clause (a) is 30 years while under clause (b) it is only 12 years and the starting point of limitation under the first clause is the date when the right to recover possession accrues while under clause (b) it is when the transfer becomes known to the plaintiffs. Thus, when the mortgagee's right is transferred it would come within clause (a) and the transferee will acquire no higher right than that of a mortgagee. Where the mortgagee transfers absolute title it becomes unlawful and operates adversely against the mortgagor, as soon as he acquires knowledge of such transfer, 12 years of such adverse possession will extinguish mortgagor's title. That this is the true meaning and scope of Article 61 (b) of the Limitation Act, 1963 will be clear from the following cases.

6. In the case of James Skinner v. Naunihal Singh, (1929) 56 Ind App 192 : (AIR 1929 PC 158) dealing with the Article 134 of the old Limitation Act (which is same as Article 61 (b) of new Limitation Act) the Judicial Committee observed:—

“The transfer of property mortgaged contemplated by this Article is admittedly something other than an express transfer of the original mortgage. The Article contemplates a transfer by a mortgagee purporting to transfer a larger interest by a mortgage.”

7. In the case of Nani Bai v. Gita Bai Kom Rama Gunge., AIR 1958 SC 706, the Supreme Court also dealing with Article 134 of the old Limitation Act (same as Article 61 (b) of new Limitation Act) observed:—

“In order to attract the operation of Article 134 the defendant has got affirmatively to prove that the mortgagee or his successor-in-interest has transferred a larger interest than justified by the mortgage.”

8. Thus, to invoke Article 61 (b) of the Limitation Act the following elements have to be established:—

(a) The suit property was mortgaged;

(b) Subsequent to the mortgage, a larger interest in it than justified by the mortgage as transferred by mortgagee for a valuable consideration; and

(c) The transferee continued in possession on the strength of his purchase for 12 continuous years or more since the date when the transfer became known to the plaintiffs. In this connection it may be stated that adverse possession of successive transferees can be tacked together to constitute adverse possession for the required period, because a subsequent purchaser can avail of the adverse possession of the prior purchaser through whom he claims. (See the case of Gurbinder Singh v. Lal Singh, AIR 1965 SC 1553).

9. The onus is on the defendants to prove affirmatively that what was transferred by Baidyanath to Kishore Mohan was an interest higher than what he himself acquired under Ex. 1 and such transfer was for valuable consideration. In discharge of that onus the defendants have proved the sale deed of Baidyanath to Kishore Mohan (Ex. A/1) and sale deed by Kishore Mohan to Pratima (Ex. B/1). Ext. 1 was for a sum of Rs. 100 in respect of A1.27 acres. This stipulation for reconveyance of the property on payment of the mortgage amount contained therein was to enure for 5 years only with effect from 5-9-30 when the mortgage deed was executed. About 20 years after period for carrying out this stipulation was over, the first sale by the mortgagee to Kishori Mohan took place. The mortgagee apparently thought that he had perfected his absolute title to the property and conveyed it from that stand point. This becomes clear from his recitals in the first sale deed (Ex. A/1) where he has categorically stated that he was in possession of the conveyed property as absolute owner, that he has mutated his name in the landlords' sherista and that the vendee can also mutate his name in respect thereof in his place and enjoy the property from generation to generation for all time to come. The amount of consideration demanded and received is Rs. 200 for 39 decimals which, in comparison with the mortgage amount of Rs. 100 for 1.27 acres under Ex. 1 indicates two things, namely, that the mortgagee has transferred a larger interest than justified by the mortgage and that the sale is for valuable and adequate consideration and that the consideration was not merely nominal. I think this particular onus has been discharged in regard to Ex. A/1. Necessarily, therefore, what was conveyed by Kishori Mohan to Pratima Devi (Ex. B/1) was a larger interest than the mortgagee owned, even though for a lesser consideration. This is corroborated by recitals of Kishori Mohan in Ex. B/1 that he had acquired absolute title to the land conveyed under Ex. B/1 and that the vendee, namely, Pratima acquired unrestricted power to deal with the property in any manner she liked in view of the absolute title conveyed under her sale deed. This conclusion is reinforced by the subsequent circumstance of the vendee having got her name recorded in the landlords' sherista and having paid rent to the landlord and, after abolition of the estate, also to the Anchal. Thus, the second element has been satisfied.

10. As regards the third element, it has to be established that the first transfer to Kishori Mohan became known to the plaintiffs and the date of such knowledge was 12 or more years prior to the institution of the suit in order to attract Article 61 of the Limitation Act.

11. The defendants having discharged their initial onus of proving that the mortgagee transferred a larger interest than he owned for valuable consideration and that the defendants have been in possession for more than 12 years by the date of the institution of the suit, the burden shifts to the plaintiffs to prove that their suit is in time having regard to Article 61 (b) of the Limitation Act. This is so because the defendants have shown that Kishori Mohan obtained possession since 6-1-54 and handed the same over to Pratima on 30-6-58 since when Pratima remained in possession till her death and, after her death, the appellants came into possession. All these aforesaid holders of the suit properties have mutated their names in the landlords' sherista and paid rent. The sale deeds under which they obtained title to the suit properties were registered deeds. In these circumstances there arises a presumption of constructive notice to the plaintiffs of acquisition of absolute title to the suit properties by Kishori Mohan and thereafter by Pratima. The view that the initial onus lies on the plaintiffs to prove that 12 years have not completed since the date of their knowledge of the transfer under Ex. A/1 “is based on two principles, firstly that it is the duty of the plaintiff to prove that his case is within limitation, and secondly that a fact which is within the special knowledge of a person, is to be proved by that person” - vide the case of Khadi Khan v. Murad Khan, AIR 1942 Peshawar 39. The Privy Council in Radhanath's case, (1871) 14 Moo Ind App 1 held that this Article (now Article 61, cl. (b)) is a special Article cutting down the period which a mortgager may have against a mortgagee and is of a stringent kind; hence, any person claiming the benefit of such a stringent provision “should clearly and distinctly show that he fills the position of the person contemplated by this Article, as a person to be protected.” The plaintiffs claim the benefit of this provision of Limitation Act, in that they want the court to believe that 12 years have not elapsed since the date of their knowledge of the transfer till the date of the suit. They must, therefore, discharge their initial onus (see also the case of Krishnaswamy v. Sabaratnam Chettiar, (1938) 1 Mad LJ 101 : (AIR 1938 Mad 384) and the case of Raghunandan Misra v. Mahadeo, AIR 1933 Oudh 38 (2)). The lower appellate court has completely missed this legal aspect and has accordingly misdirected himself in dealing with the point of limitation arising out of Article 61 (b) of the Limitation Act. He has omitted to give any finding as to the date of the knowledge of the plaintiffs regarding the transfer under Ex. A/1 It has to be remembered that since the onus is squarely on the plaintiffs, they must adduce evidence that they became cognisant of Ex. A/1 sometime within 12 years of suit in order to save it from the bar of limitation under Article 61 (b) or be non-suited on the ground of having failed to discharge their onus and, weakness or absence of defence evidence on this aspect cannot stand them in good stead. Since the question of limitation, which looms large has not been seen in the correct legal perspective, the plaintiffs have failed to adduce necessary evidence in discharge of their initial onus, and it will be inequitable to dismiss their suit on the ground of limitation without giving them an opportunity to discharge their onus in this regard.

12. In the circumstances the case is remanded to the trial court with the direction that he shall give an opportunity to plaintiffs in the first instance to discharge their onus that they came to know of the transfer under Ex. A/1 within 12 years of suit and also give the defendants to rebut the same and, thereafter, ultimately decide as to the date of knowledge of the plaintiffs and then dispose of the question of limitation and the suit finally.

13. In doing so, the court must regard the findings as to the other ingredients of Article 61 (b) of Limitation Act as rendered above in this judgment and as to the nature of Ex. 1, final and not liable to be reopened before him.

14. In result, therefore, the suit is remanded to the trial court for fresh disposal after adjudicating the question of limitation only. Costs will abide the result.

15. Order accordingly.

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