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Smart Summary

Factual and Procedural Background

This appeal arises from the dismissal, by the courts below, of a suit for redemption. The plaintiffs purchased lands from the erstwhile mortgagors (defendants second party and others) by a registered sale deed dated 23 May 1945. The disputed land originally was an occupancy holding of the mortgagors and their ancestor. On 19 May 1914 the mortgagors executed a usufructuary mortgage (ijara / sudbharana bond) for Rs. 650 in favour of the ancestor of the defendants first party (the mortgagees), who then came into possession.

A rent suit was instituted by the landlord in which the mortgagors and mortgagees were defendants. That rent suit was compromised on 17 August 1921. By the compromise petition the mortgagors admitted the mortgagees' position as kebaladars and treated the 1914 document as a sale deed; thereafter the mortgagees were recorded in the landlord's register as vendees and held the land as purchasers. The plaintiffs (purchasers in 1945) sued for redemption on refusal by the mortgagees to accept ijara money or deliver possession. The trial and appellate courts found the 1921 compromise genuine, found adverse possession by the mortgagees for more than twelve years from 1921 and dismissed the plaintiffs' suit for redemption. The plaintiffs' second appeal was referred to a Division Bench for decision.

Legal Issues Presented

  1. Whether the right of redemption (equity of redemption) was extinguished by adverse possession of the defendants first party (i.e., whether the mortgagees acquired title by adverse possession).
  2. Whether the 1921 compromise — alleged by plaintiffs to be an admission or to be invalid for want of registration — could operate to change the character of possession and thereby affect the right of redemption.
  3. Whether a compromise (allegedly unregistered) requiring registration under Section 17(1)(b) of the Indian Registration Act can be relied upon to extinguish the equity of redemption.
  4. Whether adverse possession can operate against a person who is not entitled to present possession (i.e., can a mortgagee's possession be treated as adverse to the mortgagor).
  5. Whether the courts below erred in holding that a deposit made under Section 83 of the Transfer of Property Act was invalid (raised as a contention by the appellants).

Arguments of the Parties

Appellants' (Plaintiffs') Arguments (as advanced by Mr. Lal Narayan Sinha)

  • The 1914 ijara deed created a mortgagor–mortgagee relationship (mortgage), not a sale; therefore the mortgagors retained a right of redemption.
  • The admission in the 1921 compromise as to the nature of the 1914 document is an interpretative admission and cannot control the plain interpretation of the 1914 deed.
  • If the 1921 compromise amounted to a transfer or release of the equity of redemption it required registration under Section 17(1)(b) of the Indian Registration Act, and being unregistered it cannot affect title under Section 49 of that Act.
  • The compromise concerns matters/properties outside the rent suit and therefore required registration under Section 17(1)(b); for that reason it cannot affect title.
  • The compromise did not operate as an estoppel against the mortgagors or the plaintiffs.
  • The courts below erred in finding adverse possession: there can be no adverse possession against a person not entitled to present possession (i.e., the mortgagee's possession was as mortgagee and could not start the running of limitation against the mortgagor).
  • The finding that the deposit under Section 83 of the Transfer of Property Act was invalid is erroneous in law.
  • Relied on case law (including Khiarajmal v. Daim; Mir Wajid Ali v. Alidad Khan; A.S.S. Subhaiya Pandaram v. Mohamad Mustafa Maracayar) supporting the proposition that unilateral acts / absence of delivery of possession do not start the running of limitation against co-owners or those entitled to present possession.

Respondents' (Defendants') Arguments (as advanced by Mr. S.N. Datta)

  • The courts below correctly found that the mortgagees had been treated and had remained in possession as purchasers since the 1921 compromise, and by their adverse possession beginning in 1921 (for more than twelve years) the mortgagees acquired indefeasible title against the mortgagors.
  • Because the mortgagees were allowed to remain and be treated as purchasers with the mortgagors' consent and acts, their possession became adverse and ripened into ownership by lapse of the statutory period; hence no right of redemption remained for the plaintiffs' vendors by 1945.
  • Relied on multiple authorities (including N. Varada Pillai v. Jeevarathnammal; Markanda v. V.K.R. Naidu; cases from Madras and Allahabad benches) supporting the proposition that bilateral consensual acts changing character of possession can convert mortgagee possession into adverse possession which, after statutory period, extinguishes the equity of redemption.
  • If the adverse possession finding stands, other contentions of the appellants need not be decided.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Khiarajmal v. Daim, 32 Ind. App. 23 Cited by appellants to support that unilateral acts / lack of delivery of possession do not start adverse possession against co-owners or mortgagors. The court distinguished this Privy Council decision as a case of unilateral act where there was no evidence of delivery of possession; thus it was held not applicable to the present facts involving bilateral consensual acts.
Mir Wajid Ali v. Alidad Khan, AIR 1940 Pat. 45 Cited by appellants as a case supporting limits to adverse possession where acts were unilateral. The court treated it as a case of unilateral act and distinguished it from the present case where there was bilateral agreement and change of possession.
A.S.S. Subhaiya Pandaram v. Mohamad Mustafa Maracayar, AIR 1923 P.C. 175 : 50 Ind. App. 295 Cited by appellants among authorities addressing equity of redemption and related issues. Cited but not treated as controlling; the court did not rely on it for the main decision and instead relied on cases favouring bilateral-act principles.
N. Varada Pillai v. Jeevarathnammal, AIR 1919 P.C. 44 : ILR 43 Mad. 244 ; 46 Ind. App. 285 Cited by respondents to support that acts and registration changes can explain character of subsequent possession leading to adverse possession. The court considered it supportive: it illustrates that even if the underlying instrument is invalid, a change of possession recorded in official registers can explain conduct amounting to adverse possession and lead to extinction of prior rights after limitation.
Rai Banomali Roy Bahadur v. Jagat Chundra Bhowmick, 32 Ind. App. 80 : ILR 32 Cal. 669 (P.C.) Referenced by respondents as part of supporting authorities on possession and title questions. Considered among the array of cases; the court did not treat it as decisive but examined its principles in the context of bilateral acts and their effect.
Imdad Hussain v. Aziz-Un-Nissa, 23 Ind. App. 8 Cited in the course of debate on adverse possession and mortgagors' rights. The court noted it among cases considered; the primary reliance remained on later Bench decisions aligned with the bilateral-act principle.
Sohan Lal v. Mohan Lal, AIR 1928 All. 726 : ILR 50 All. 988 (Full Bench) Cited to support that a consensual change in character of possession can be effective evidence of adverse possession. Quoted and approved as supporting the proposition that an agreement between parties changing possession character can be recognised as creating adverse possession when continued for statutory period.
Baldeo Singh v. Sheikh Muhammad Akhtar, 20 Pat L.T. 399 : AIR 1933 Pat. 488 Cited by respondents as authority acknowledging acquiescence may amount to release of equity of redemption in proper cases. The court cited it as recognising that acquiescence by mortgagor may amount to release of equity of redemption; used to support the view that bilateral acts can produce adverse possession.
Kandasswami Mudaliar v. Ponnuswami Mudaliar, AIR 1929 Mad. 16 Cited for principle that consensual change to character of possession should be recognised. Listed among decisions in support; the court found these Madras decisions consistent with recognising adverse possession arising from consensual change of possession.
Markanda v. V.K.R. Naidu, ILR 26 Pat. 717 : AIR 1949 Pat. 197 Bench decision considered on all fours with present case: bilateral consensual acts changing possession treated as delivery and starting adverse possession. The court regarded this decision as directly applicable and decisive ("on all fours") and relied on its analysis heavily in reaching the result in the present case.
Kandaswamy Pillav v. Chinnabha, AIR 1921 Mad. 82 : ILR 44 Mad. 253 Cited for the proposition that an unregistered sale may be inadmissible to prove a sale yet admissible to explain the nature of subsequent possession. The court cited it as supporting the view that an invalid/unregistered transaction can still show the transferee's subsequent possession as owner, which may ripen into title by adverse possession.
Bejoy Chunder Banerjee v. Kally Prosonno Mookerjee, ILR 4 Cal. 327 Cited by counsel for appellants as illustrative of adverse possession principles (general definition and effect). The court cited it for the general explanatory statement of adverse possession (possession on one's own behalf of someone other than the true owner), using it as background principle.
Fazlhussein Sharafally v. Mahomedally Abdulally, 45 Bom L.R. 614 : AIR 1943 Bom. 366 Referred to by appellant's supporting counsel on general principles that do not permit destruction of mortgagee/mortgagor rights by certain acts. Not decisive in the court's view; cited but the court preferred the weight of authorities favouring bilateral-act effect in the present facts.
Raja Mohamed Mumtaz Ali Khan v. Mohan Singh, AIR 1923 P.C. 113 : 50 Ind. App. 202 Referred to by counsel for appellants among authorities on limits of actions that destroy mortgagee/mortgagor relationships. Not treated as controlling; court distinguished earlier unilateral-act authorities from the bilateral-consent situation here.
ILR 20 Pat L.T. 399 : AIR 1939 Pat. 488 Bench decision cited to recognise that acquiescence may amount to release of equity of redemption in some cases. Used to illustrate that courts may find mortgagor acquiescence amounting to release; helped support the court's view that bilateral acts can produce adverse possession.
In re A Bankruptcy Notice, (1924) 2 Ch. 76 Cited by appellants in relation to estoppel / ability to contest invalid transaction. The court discussed estoppel and held the question of estoppel did not properly arise to defeat statutory rights created by lapse of time; thus such authorities did not negate adverse possession effect.
Maritime Electric Co. Ltd. v. General Dairies Ltd., AIR 1937 P.C. 114 Cited by appellants regarding estoppel arguments. The court held that estoppel cannot be used to evade statutory duties or obligations and relied on that principle to reject appellants' estoppel contention as defeating the defendants' accrued statutory right.

Court's Reasoning and Analysis

The court framed the appeal as turning primarily on whether the equity of redemption had been extinguished by adverse possession. The court proceeded step-by-step:

  1. Factual foundation: the 1914 instrument created a mortgage and the mortgagees initially entered as mortgagees; the 1921 compromise in a rent suit treated the mortgagees as kebaladars and the document as a sale; thereafter they were recorded as vendees in the landlord's register and held the land as purchasers. The courts below found the 1921 compromise genuine and that the mortgagees had possessed the land as purchasers for more than twelve years.
  2. Legal starting point: the maxim "once a mortgage always a mortgage" and the proviso to section 60 of the Transfer of Property Act — a mortgagee's possession is ordinarily possession as mortgagee, and mortgagor retains the right to redeem unless there is a valid act of the parties, merger, a court order, or special statute that operates to extinguish the equity.
  3. Distinction between unilateral acts and bilateral consensual acts: the court emphasized that while a mortgagee cannot convert his possession into absolute ownership by unilateral acts alone, the bilateral acts of both mortgagor and mortgagee — even if embodied in an invalid or unregistered instrument — can change the character of possession (from mortgagee possession to possession as vendee) and, when such possession continues for the statutory period, produce adverse possession which ripens into title.
  4. Application to the present facts: the compromise of 1921, though possibly invalid for lack of registration, represented the consensual act of both parties. Both parties acted upon it: the mortgagees were recorded as purchasers, the holding was split and separately assessed, and the mortgagees continued in possession as owners for more than the statutory period (more than twelve years from 1921). The court treated that consensual change of possession as tantamount to delivery by the vendor to the vendee.
  5. Precedent analysis: the court identified Markanda v. V.K.R. Naidu as a decision "on all fours" with the present facts and relied heavily on its reasoning. The court reviewed and distinguished authorities relied on by the appellants that involved unilateral acts or lacked formal delivery of possession (e.g., Privy Council decisions), explaining that those cases did not apply where there had been bilateral consent and an effective change of possession.
  6. Estoppel and invalidity: the court addressed the appellants' contention that they were not estopped from pleading the invalidity of the compromise. It held that estoppel did not properly arise to defeat a statutory right that had accrued by lapse of time where the mortgagors themselves had acted to treat mortgagees as purchasers and allowed the change to be recorded and acted upon for the statutory period. The court applied the principle that an invalid instrument can nevertheless explain the nature of subsequent possession (and hence be relevant to adverse possession), and that estoppel cannot be invoked to avoid compliance with statutory obligations in a way that would defeat a right that matured by operation of law.
  7. Conclusion of analysis: the court concluded that the defendants first party's adverse possession began in 1921 when, by and under the compromise, they were recognised as purchasers; continued possession for more than twelve years extinguished the equity of redemption; therefore by 1945 the mortgagors had no right of redemption to convey to the plaintiffs.

Holding and Implications

HOLDING: The appeal is DISMISSED. The court affirmed the courts below that the plaintiffs' suit for redemption was barred because the equity of redemption had been extinguished by adverse possession of the defendants first party.

Implications:

  • Direct effect: The defendants first party, by adverse possession starting in 1921 and continuing for the statutory period, acquired full ownership rights as against the plaintiffs' vendors; the plaintiffs' 1945 purchase conveyed no right of redemption and their suit (commenced in 1946) was time-barred under the Limitation Act (Article 144).
  • On the question of an unregistered compromise: the court held that even if the 1921 compromise was invalid for want of registration, it nonetheless constituted the bilateral act that changed possession's character and, coupled with long possession, produced adverse possession; accordingly invalidity did not defeat the statutory right that accrued by lapse of time.
  • Precedential impact: the court relied on existing Bench and Privy Council authorities (notably Markanda v. V.K.R. Naidu) and explained distinctions from authorities involving unilateral acts. The decision applies established principles but does not purport to create a novel rule beyond recognizing that bilateral consensual acts changing possession can lead to adverse possession and extinguish equity of redemption where the statutory period elapses.

Result announced: Appeal dismissed with costs; Ramaswami, C.J., concurs.

    Sukhaeo Singh And Another v. Lekha Singh And Others

    Raj Kishore Prasad, J.:— This is plaintiffs' appeal from the concurrent decisions of the courts below dismissing-their suit for redemption on the ground that the defendants first party had acquired title by adverse possession, and, therefore, the right of redemption had been extinguished, and, as such, the plaintiffs' vendors had no title left in the disputed lands to convey to the plaintiffs by the sale in their favour.

    2. The main question, therefore, for determination is: Has the right of redemption been extinguished. In order to appreciate and understand in what circumstances the question of adverse possession arises, and how the plaintiffs' or their vendors, right of redemption has been lost, it is necessary to state some facts in brief.

    3. The disputed land was the occupancy holding of defendants second party, defendants 3 to 8, and their ancestor. On 19th May, 1914, they executed a usufructuary mortgage for Rs. 650/- in respect of the disputed land in favour of Darbari Singh, the ancestor of defendants first party, defendants 1 and 2, who came in possession of the ijara land. The defendants second party, who will hereafter be referred to as mortgagors, thereafter sold the ijara land to the original Plaintiff Kitar Singh under a registered sale deed dated 23rd May, 1945. Kitar Singh having died, his sons, on refusal of defendants first party, who will hereafter be referred to as mortgagees, to accept the ijara money, or, to deliver possession of the disputed land to the plaintiffs, brought the suit, out of which the present appeal arises, for redemption.

    4. The suit was contested by the mortgagees. Their case was that the ijara deed of 1914 was really a sale deed, but they got an ijara deed executed because there was no custom of transferability of occupancy holding in the village without the consent of the landlord. The landlord brought a rent suit against the mortgagors and the mortgagees, that is, all the defendants of the present suit.

    5. On 17th August, 1921, the suit was compromised, and, in the compromise petition, the position of these mortgagees as kebaladars was admitted by the mortgagors. Since then the mortgagees asserted that they have been coming in possession, over the disputed land as purchasers on payment of rent to the landlord, and as such, they had acquired title by adverse possession against the mortgagors, and, therefore, the plaintiffs acquired no title by their purchase of the disputed lands from the mortgagors.

    6. The court of appeal below, in agreement with the learned Munsif, found that the compromise petition of 1921 was a genuine document, and, as the mortgagees have been in adverse possession of the disputed land since the date of compromise for more than twelve years, they had acquired indefeasible title by adverse possession, and, in such circumstances, the plaintiffs by their purchase on 23rd May, 1945, acquired no title to the disputed land, and, therefore, they were not entitled to maintain the suit for redemption. On these findings, the judgment and decree of the first courts dismissing the plaintiffs' suit were affirmed.

    7. Against the above decision, the plaintiffs have preferred the present second appeal, which has been referred to a Division Bench by Banerji, J., for decision.

    8. Mr. Lal Narayan Sinha, appearing for the plaintiffs-appellants, put forward the following objections to the decree appealed from:

    1. The Ijara deed of 1914 created a relationship of mortgagor and mortgagee and not of vendor and vendee, and, as such, the right of redemption remained intact with the mortgagor;

    2. The admission, contained in the compromise petition of 1921, that the document of 1914 was a sale deed is an admission about the interpretation of the document of 1914, but it cannot control the plain interpretation of the deed of 3914;

    3. If the compromise of 1921 amounts to a transfer, or a release, of the mortgagors' right of redemption, it must be registered under Section 17(1)(b) of the Indian Registration Act, and, as such, the compromise of 1921, being an unregistered document will not affect the plaintiffs', or their vendors' title, under Section 49 of the Indian Registration Act, because it was not a valid transfer, or release;

    4. The compromise, being also in respect of matters and properties outside the suit, required registration under Section 17(1)(b) of the Indian Registration Act, and, as such, on this ground also, it did not affect the title to the disputed land created by the document of 1914;

    5. The compromise of 1921 did not operate even as estoppel against the mortgagors, and, as such, against the plaintiffs;

    6. The finding of adverse possession was bad in law, because there can be no adverse possession against a person who is not entitled to present possession; and

    7. The finding of the court of appeal below that the deposit made by the plaintiffs under Section 83 of the Transfer of Property Act was invalid is also erroneous in law.

    8. Mr. S.N Dutta, for the plaintiffs-respondents, however, argued that the finding of the courts below on adverse possession is correct in law, and if this finding is upheld, then it would not be necessary to consider the other contentions raised by Mr. Sinha.

    9. I entirely agree with Mr. Datta that the decision of the present appeal hinges on the determination of the question of adverse possession. I would, therefore, now proceed to consider the question of adverse possession first.

    10. On the issue whether the plaintiff's suit for redemption was barred because of adverse possession, for more than twelve years, of the mortgagees, who were vendees by virtue of the compromise of 1921, the argument advanced by Mr. Sinha was that the possession of the mortgagees was not adverse, because their possession was in their character as mortgagees, and that to bar an existing right to redeem, a period of sixty years must elapse, or a release of the equity of redemption proved.

    11. He, therefore, contended that any acquiescence not amounting to a release, was not sufficient to extinguish the equity of redemption. He further developed his point by putting forward a further argument that when the possession of a mortgagee is referable to a legal title, no question of adverse possession can arise. The mortgagee did not become a purchaser in 1921 under the compromise.

    12. The compromise petition was nothing more than an admission, and, therefore, it could not be the basis of any title, and, even it amounted to an acquiescence, it could not be the basis for adverse possession, and, therefore, the compromise petition did not curtail the period of limitation prescribed for a suit for redemption, as the mortgagee did not start prescribing against the mortgagor from 1921 so as to acquire a right, by adverse possession by the efflux of twelve years from that time.

    13. He further contended that by the compromise it was only declared that the document of 1914 was a sale deed, and, therefore, the relationship of mortgagor and mortgagee, which purported to be prima facie on the document of 1914, was declared to be that of vendor and vendee by the compromise of 1921, and as such, this declaration did not disturb or affect the quality of possession of the mortgagees.

    14. He also contended that there could be no adverse possession against a person, who was not entitled to present possession. For all these reasons, Mr. Sinha urged that the finding of adverse possession against the plaintiffs of the court of appeal below was wrong in law, as no such adverse possession could be founded upon the facts proved in the case. In support of his contention, Mr. Sinha placed strong reliance on Khiarajmal v. Daim, 32 Ind. App. 23 (A); Mir Wajid Ali v. Alidad Khan. AIR 1940 Pat. 45 (B), which followed the above Privy Council case; and, A.S.S Subhaiya Pandaram v. Mohamad Mustafa Maracayar, AIR 1923 P.C 175 : 50 Ind. App. 295 (C).

    15. Mr. Datta combated the above contentions of Mr. Sinha, and contended that in the circumstances of the present case in which the mortgagees were allowed to remain in possession of the disputed properties for over twelve years since 1921, as purchasers, by the erstwhile mortgagors, the title of the mortgagees as purchasers became perfect as against the plaintiffs' vendors, and, as such, the funding of the court of appeal below that the equity of redemption of the plaintiffs and their vendors was extinguished by adverse possession of the defendants first party as against the plaintiffs' vendors was correct in law.

    16. In support of his contention, Mr. Datta relied on N. Varada Pillai v. Jeevarathnammal AIR 1919 P.C 44 : ILR 43 Mad. 244; 46 Ind App. 285 (D); Rai Banomali Roy Bahadur v. Jagat Chundra Bhowmick, 32 Ind. App. 80 : ILR 32 Cal. 669 (PC) (E); Imdad Hussain v. Aziz-Un-Nissa, 23 Ind App 8 (PC) (F); Sohan Lal v. Mohan Lal AIR 1928 All 726 : ILR 50 All 988 (FB) (G); Baldeo Singh v. Sheikh Muhammad Akhtar. 20 Pat L.T 399 : (AIR 1933 Pat. 488) (H); Kandasswami Mudaliar v. Ponnuswami Mudaliar AIR 1929 Mad 16 (I): Markanda v. V.K.R Naidu, ILR 26 Pat. 717 : (AIR 1949 Pat. 197) (J) and, Kandaswamy Pillav v. Chinnabha. AIR 1921 Mad. 82 : ILR 44 Mad. 253 (K).

    17. Mr. Ugra Singh, who relied on behalf of the appellants, to the points raised by Mr. Datta, referred also to Bejoy Chunder Banerjee v. Kally Prosonno Mookerjee, ILR 4 Cal. 327 (L); Fazlhussein Sharafally v. Mahomedally Abdulally 45 Bom L.R 614 : (AIR 1943 Bom 366) (M); and, (Raja) Mohamed Mumtaz Ali Khan v. Mohan Singh, AIR 1923 P.C 113; 50 Ind. App. 202 (N) in support of his contention that never at any stage the mortgagees' rights as mortgagees were destroyed by any act of the mortgagors in the eye of law.

    18. In order to determine the correctness of the respective contentions raised at the Bar by the learned Counsel for the parties, it is necessary to mention the following facts, which have been found in this case:

    In 1921, the landlords instituted a rent suit for recovery of arrears of rent and also for enhancement of rent, both against the mortgagors, and, the mortgagees, the defendants to the present suit. The suit was compromised, and, a consent decree in terms of the compromise was passed on the 17th August, 1921. By the compromise, the mortgagors admitted that the mortgagees were kebaladars and, the sudbharana bond of 1914 was treated as a sale deed, and the mortgagors further declared that they or their heirs and representatives neither have nor shall have any concern or connection with the disputed land. This compromise petition of 1921 has been found to be genuine by the courts below. By virtue of this compromise, the mortgagees were recorded in the landlords' shcrishta as vendees of the disputed lands, at the instance of both the parties, namely, the erstwhile mortgagors and mortgagees; and, thereafter, again at the instance of both, the holding was split up and, the lands in possession of the mortgagees were recorded as a separate holding with a separate rental. Since 1921, the erstwhile mortgagees continued in possession of the disputed lands not as mortgagees, but as vendees or owners thereof in their own absolute right for more than two decades when the plaintiffs took a sale in 1945 from the original tenants, who were the mortgagors before. The possession hitherto held as mortgagees was held as vendees thenceforth. In the rent suit, which was brought by the landlords against the mortgagors the original tenants, and, the mortgagees, the question was as to which defendant was liable to pay the rent. In that rent suit, the compromise was entered into between all the three parties to the suit, namely, the landlords plaintiffs, and, the mortgagors and the mortgagees defendants.

    19. Relying on the above facts, Mr. Dutt contended) that adverse possession had been established as the mortgagees began to prescribe against the mortgagors, the plaintiffs' vendors, from 1921, and, their right of redemption was as such extinguished long before 1945 by the adverse possession of the mortgagees, and, therefore, in 1945, no right of redemption was left in the mortgagors which they could convey, to the present plaintiffs, and, therefore, they had no right to maintain the suit for redemption.

    20. By adverse possession is meant possession by a person holding the land, on his own behalf, of some person other than the true owner, the true owner having a right to immediate possession. If by this adverse possession the Statute is set running, and it continues to run for twelve years, then the title of the true owner is extinguished, and the person in possession becomes the owner: ILR 4 Cal. 327 (L).

    21. Under the Proviso to section 60 of the Transfer of Property Act, the right of redemption conferred by section 60 of the Act is “extinguished” by the 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. The maxim “once a mortgage always a mortgage” applies; and the only way in which a mortgage can be terminated as between the parties to it, therefore, is by the act of the parties themselves, or, by merger, or by an order of the Court, or by a special statute to debar them.

    22. When, therefore, in the present case, the mortgagees entered upon possession by virtue of the mortgage of 1914, they were there as mortgagees, and, being mortgagees, the original mortgagors have had a right to redeem, unless there is either a contract between the parties or a merger, or a special statute to debar them. In the present case, neither merger, nor any special statute, nor any order of the Court is pleaded, but the only thing pleaded to debar the right of the mortgagors, and as such of the plaintiffs, to redeem is the compromise of 1921 entered into in the rent suit, which was followed up and acted upon by the parties, and, due to their bilateral acts, the mortgagees were treated as purchasers since 1921, and recorded as such, with the express consent of both, in the landlord's sherishta, and a separate holding was carved out for these lands by splitting up the original holding.

    23. Both the parties agreed and intended that the-possession of the mortgagees over the property should cease to be that of mortgagees from 1921, and be adverse as against the mortgagors. In such circumstances, it cannot be said that such a change cannot be recognised, or be effectual, and with their express agreement that the right of redemption by act of the parties, was not extinguished, especially when it is one of the ways in which under the proviso to section 60 of the Act a right of redemption can he extinguished.

    24. It is not necessary to notice all the cases relied upon by the parties in support of their respective contentious because I find that the Bench decision of this Court in ILR 26 Pat 717 : (AIR 1949 Pat 197) (J) is on all fours with the present case, and, almost all the cases cited at the Ear, and, several others, bearing on this question have all been reviewed at length, considered and discussed elaborately therein. The Privy Council decision in 32 Ind App. 23 (A), and the earlier Bench decision of this Court in AIR 1940 Pat 45 (B), which have been strongly relied upon by Mr. Sinha have also been considered and distinguished in the just mentioned case. Mr. Justice B.P Sinha, as he then was who delivered the judgment of the Bench, and, with whom Shearer, J., agreed, has very elaborately gone into this question, and if I may say so with respect, his Lordship has with great clarity discussed the Page: 506principles of law applicable to such a case at pages 738 to 742 (of ILR Pat): (at pp. 206 to 208 of AIR) of the Reports.

    25. There, as here, it was contended that sixty years' limitation under Article 148 of the Limitation Act to redeem a mortgage not having expired the equity of redemption was still in tact, notwithstanding private sales and auction sales in that case. Their Lordships in distinguishing the case of Khiarajmal v. Daim (A) (Supra) observed that there was no evidence of any delivery of possession in that case, whereas in the case under consideration by their Lordships there was evidence of formal delivery of possession through Court in respect of the purchased shares.

    26. The following statement of law, laid down by B.P Sinha, J. in Markanda's case (J), is very apposite to the present, controversy:

    “But it has been rightly pointed out on behalf of the respondents that, there the mortgagor and the mortgagee both agree by a consensual act that the possession hitherto held as mortgagee should now be held as vendee, such a transaction is tantamount to delivery of the property by the vendor to the vendee.”

    27. His Lordship quoted with approval the following observations in the Full Bench decision of the Allahabad High Court in ILR 50 All. 986 : (AIR 1928 All 726) (FB) (G).

    “The case, however, is different where a change in the character of the possession is brought about by an agreement between the parties, or with their express consent, as distinguished from a mere acquiescence. I do not see why, if both parties agree and intend that from a particular date the possession of the mortgagee over the property should cease to be that of, a mortgagee and be adverse as against the mortgagor, such a change cannot be recognized or be effectual. As a result of the act of both the parties, a person may have adverse possession even though lie also has a legal title as a co-sharer or mortgagee.”

    28. To the same effect are the decisions of the Madras High Court in Kandaswami Mudaliar v. Ponnuswami Mudaliar AIR 1929 Mad. 16 (I), and. Usman Khan v. N. Dasanna ILR 37 Mad. 545 : (AIR 1914 Mad 578 (2)) (O).

    29. Mr. Dutta has rightly distinguished the Privy Council decision in 32 Ind. App 23 (A) and the Bench decision of this Court in AIR 1940 Pat 45 (B) on the ground that they were cases of unilateral acts, and not of bilateral acts, and in my opinion, this made a world of difference in the legal position. In the Privy Council case of Khiarajmal v. Daim (A) (Supra) the equity of redemption was purported to be sold out by auction sale to which one of the co-sharers was not a party, and, therefore, it was held by the Privy Council that the equity of redemption was wiped out in respect of the shares of those co-sharers, who were parties to the mortgage decree, but that the share in the equity of redemption belonging to the other co-sharer, who was not represented in the mortgage suit, still remained intact in spite of the lapse of more than twelve years. Similar was the position in the Bench decision of this Court in Mir Wajid Ali v. Alidad Khan (B) (Supra.) which was also a case of only a unilateral act. In such circumstances, obviously, these cases can have no application to the present one, where the act of the parties is bilateral.

    30. It is a well recognised principle that a mortgagee cannot by a mere assertion of his own, or by a unilateral act on his own part, convert his possession as mortgagee into that of an absolute owner. But where, as here, the bilateral acts of the parties, referred to above, though invalid, and therefore, inoperative to convey title on the date of the transaction, would operate to give adverse possession which, if continued for the statutory period, would ripen into a good title.

    31. A Bench of this Court in 20 Pat L.T 399 : (AIR 1939 Pat 488) (H) has recognised the principle that in proper cases it is open to the courts to find that there was such an acquiescence on the part of the mortgagor as amounting to release of the equity of redemption.

    32. Where, therefore, both the mortgagor and the mortgagee agree by a transaction to which they are parties that the character of possession as mortgagee should change into that of possession as absolute owner in spite of the invalidity of the transaction to convey title at once, the possession so given can operate on the expiry of the statutory period to create title by adverse possession.

    33. Here, on the facts found and stated earlier, it is the consensual act of the parties, and not merely a unilateral assertion of the mortgagees alone, which has had the effect of wiping out the equity of redemption.

    34. In Markanda's case (J), B.P Sinha, J., held;

    “But the act of the parties coupled with possession for more than twelve years after that art, has the same effect as the act of the parties, if that act were valid in law.”

    35. The Privy Council case, AIR 1919 P.C 44 : 45 Ind. App. 285 (D), relied upon by Mr. Datta is also to the point. In this case, the registered owners of the properties presented a petition to the Collector, whereby after reciting that they had given away the two villages mentioned there to a certain person, they prayed that orders might be passed for transferring the village to Duraisani into her name. Duraisani on the same day also presented a petition to the Collector reciting the gift of the villages to her, and requesting that they should be transferred into her name. The Collector, accordingly, registered the two villages in the name of Duraisani.

    36. Their Lordships held that although Duraisani may not have acquired any legal title under the transactions referred to, because under section 123 of the Transfer of Property Act, a gift must be made by a registered deed, still, in fact, she took possession of the properties, when it was transferred into her name, and, she remained in such possession until her death, which took place after a period of twelve years. Their Lordships, therefore, held that although the petitions and the change of names made in the register of the collector in consequence of these petitions filed before him were not admissible to prove the gift, they were nevertheless referred to as explaining the nature and character of the possession thenceforth held by Duraisani, and, as such, there having been ouster of the original owners, and, this ouster having continued after her death, the Possession of Duraisani was adverse to Alangarammal throughout.

    37. The Bench decision of the Madras High Court in AIR 1921 Mad 82 : ILR 44 Mad. 253 (K), is also in point. In this case, an arrangement was made between the mortgagor and the mortgagee by which the latter was to give up other lands and retain possession of the suit lands in full ownership in satisfaction of the mortgage debt and certain other debts. This arrangement was given effect to the other lands were relinquished and Page: 507the mortgagee defendant remained in enjoyment of the suit lands ever since. Thereafter, a suit for redemption was brought by the son of the mortgagors. It was held that although an unregistered sale cannot be set up as a transaction having effect of itself to transfer any interest in the property; but it is permissible to consider it, as showing the nature of transferee's subsequent possession, that is, when the sale is of mortgaged property to the mortgagee that it was not as a mortgagee, but as full owner.

    38. That being established it would alter the expiry of twelve years ripen into a full title and bar mortgagor's right of redemption. The Privy Council decision in AIR 1919 P.C 44 : 46 Ind. App. 285 (D) was relied upon, and, the earlier Privy Council decision in 32 Ind. App. 23 (A), relied upon by Mr. Sinha, was held not to apply to such a case.

    39. The principles, therefore, which can be extracted from the above decisions of the Judicial committee, of this court, and, the other High Courts, and, which seem to be firmly established, and, with which I am in respectful agreement, may be summarised thus:

    (1) The maxim “once a mortgage always a mortgage” applies; and the only way in which a mortgage can be terminated as between the parties to it is by the act of the parties themselves, or by merger, or by an order of the Court, or by a special statute to debar it. Therefore, when a party enters upon possession as a mortgagee, the mortgagor has a right to redeem, unless there is either a contract between the parties, or, a merger, or a special statute, or an order of the Court to debar them, as provided by the proviso to section 60 of the Transfer of Property Act.

    (2) A mortgage cannot, by a mare assertion of his own, or, by a unilateral act on his own part, convert his possession as mortgagee in that of an absolute owner.

    (3) The bilateral acts of the parties, though invalid, and, therefore, inoperative, to convey title on the dates of those transactions, would operate to give adverse possession, which if continued for the statutory period, would ripen into a good title. Where, therefore, both the mortgagor and the mortgagee agree by a transaction to which they are parties that the character of possession as mortgagee should change into that of possession as absolute owner, in spite of the invalidity of the transaction to convey title at once the possession so given can operate on the expiry of the statutory period to create title by adverse possession.

    (4) Where, therefore, both the mortgagor and the mortgagee agree by a consensual act that the possession hitherto held as mortgagee should now henceforth be held as vendee, such a transaction is tantamount to delivery of property by the vendor to the vendee.

    40. In the present case, therefore, in my judgment, even assuming that the compromise of 1921 was invalid, because or not being registered as required by law, and, as such, it did not amount either to a valid release, or to a valid transfer of the property in dispute, still it represented the consensual act of the parties, and it was not merely a unilateral assertion of the mortgagees alone, and, as such, it had the effect of wiping out and extinguishing the equity of redemption of the plaintiffs' vendors, by the defendants 1st party being in adverse possession for more than the statutory period and, as such, the right of the defendants first party ripened into a right of full ownership by lapse of statutory period. The adverse possession of the defendants first party began to run from 1921, when as a result of, and under the compromise the defendants first party were recognised as purchasers, and, the character of their possession as mortgagees changed into that of possession as absolute owners.

    41. The defendants first party being in adverse possession since then against the defendants second party, the defendants first party by being in possession for more than twelve years since then, acquired a right of full ownership, and, therefore, in 1945, the equity of redemption of the defendants second party was extinguished by adverse possession of the defendants 1st party, and, the defendants second party had nothing left to convey to the plaintiffs. The plaintiffs' suit for redemption commenced in 1946 was accordingly barred by time under Article 144 of the Limitation Act, because the equity of redemption of their vendors was extinguished long before their purchase under Section 28 of the Indian Limitation Act.

    42. I may here deal with another contention of Mr. Singha in this connection. Mr. Singha urged that the plaintiffs were not estopped from contending that the compromise of 1921 was void for want of registration, or, for other legal reasons, and, as such, they were perfectly entitled to raise the question of invalidity of this transaction in order to show that the defendants first party cannot acquire any right under it to enforce against the plaintiffs' vendors or the plaintiffs themselves. He relied in support of his contention on in re A Bankruptcy Notice, (1924) 2 Ch 76 (P), and Maritime Electric Co. Ltd. v. General Dairies, Ltd., AIR 1937 PC 114 (Q).

    43. In my opinion, the question of estoppel does not properly arise in the present case. As observed in the just mentioned Privy Council case: “The duty of each party is to obey the law Lord Maugham therein observed:

    “The sections of the Public Utilities Act which are here in question are sections enacted for the benefit of a section of the public, that is, on grounds of public policy in a general sense. In such a case — and their Lordships to not propose to express any opinion as to statutes which are not within this category — where, as here the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it. This conclusion must follow from the circumstance that an estoppel is only a rule of evidence which under certain special, circumstances can be invoked by a party to an action; it cannot therefore avail in such a case to release the plaintiff from an obligation to obey such a statute, nor can it enable the defendant to escape from a statutory obligation of such a kind on his part. It is immaterial whether the obligation is onerous or otherwise to the party suing. The duty of each party is to obey the law.”

    44. It is true a contract to do a thing, which cannot be done without a violation of the law, is clearly void, but it may be argued with force, why, a voluntary agreement between the mortgagor and the mortgagee will not put an end to the obligation of the mortgagee, when that agreement has been acted upon by the parties. No doubt, even accepting the argument of Mr. Sinha that the compromise of 1921 was void for want of registration and invalid to create any title in the defendants first party and, that the plaintiffs were not estopped from pleading that compromise was void, being in contravention of the Indian Registration Act; nevertheless, when the mortgagors Page: 508themselves in the present case allowed the mortgagees, by virtue of mutual agreement, to be treated as purchasers, whereby the mortgagees' character of possession was changed from mortgagees to that of purchasers and they allowed the mortgagees to be recorded in landlords' sherishta as purchasers and allowed them to be in possession henceforth as such far beyond the statutory period of limitation, it cannot be contended in law that the invalidity of the document, in spite of adverse possession of the mortgagees, still defeated the right of the mortgagees acquired by adverse possession.

    45. In my opinion, on the decision of the above Privy Council itself, it is not open to the plaintiffs to set up an estoppel to escape from the statutory obligation or to defeat the statutory right which has accrued and grown up in favour of the defendants first party by lapse of time.

    46. For these considerations, in my opinion, the plaintiffs' suit was barred by adverse possession of the defendants first party, and, therefore, the plaintiffs' suit for redemption had been rightly dismissed, because the right of redemption was extinguished long before their purchase.

    47. In view of my above decision on the question of adverse possession, it is not now necessary to notice the other contentions raised by Mr. Sinha, because even if they are well founded, plaintiffs cannot succeed.

    48. For these reasons, in my opinion, the appeal has been correctly decided by the court of appeal below, and, as such, its decision must be affirmed.

    49. In the result, the appeal fails, and is dismissed with costs.

    50. Ramaswami, C.J:— I agree.

    D.R.R

    51. Appeal dismissed.

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