- Bookmark
- Share
- CaseIQ
Ram Chandra v. Ram Hans
Factual and Procedural Background
This is a second appeal brought by the defendants in a suit for redemption. The respondent (plaintiff below), Ram Hans, sued the appellants Ram Chandra and Uda in the Court of Civil Judge, Hindaun, on 28 July 1945. The plaint alleged that a Kham Bakhal containing 13 pators at Hindaun had been mortgaged by Hardev (predecessor-in-title of the respondent) and Patriya (another respondent) to Ramhet as security for a loan of Rs. 200 on Sawan Badi 14, Smt. 1989 (25 July 1930); a deed was executed but not registered. The plaintiff sought (1) redemption of the mortgage, (2) possession of the property on payment of Rs. 200 to the appellants, and (3) costs.
At trial the defendants denied the mortgage, characterising the transaction as an agreement to hand over pators on nonpayment and asserting that Hardev had delivered the pators to them pursuant to contract. They claimed interest and repairs which they said increased the debt to Rs. 1,476-13-0. The trial court treated the transaction as a mortgage by conditional sale but, because the defendants had not foreclosed, held the plaintiff entitled to redeem; repairs were not proved; the defendants were allowed interest subject to the rule of damdupat; the court decreed redemption subject to payment of Rs. 600 (inclusive).
On first appeal the District Judge held there was no proof of mortgage because a document relied on (Ex. D.2) was unregistered and not admitted by the plaintiff, and accordingly dismissed the suit. On second appeal the plaintiff's counsel admitted the genuineness of Ex. D.2 and the Jaipur High Court remanded the case to the District Judge to consider that document. The District Judge subsequently held that the Munsif had rightly decreed redemption but that the amount payable could not exceed Rs. 400. The defendants (appellants) appealed to the present court.
Legal Issues Presented
- Whether the document Ex. D.2 should be interpreted as creating a mortgage (with a right of redemption) or as a conditional sale (which would deny the mortgagor a right to redeem under pre-existing law).
- Whether an unregistered deed (required to be registered under the law of the Jaipur State) can be relied upon to prevent a suit for redemption — in particular, whether absence of registration makes the mortgage void and allows the mortgagee's possession to become adverse so as to bar relief after the passage of 12 years.
- Whether a plaintiff's action framed as a suit for redemption can be treated as a suit for possession and, if so, whether the plaintiff may obtain possession upon satisfying such sums as are due to the defendant.
- How principles of adverse possession and prescription apply where the possession is founded on a limited interest (for example, a usufructuary mortgage) rather than an absolute transfer.
Arguments of the Parties
Appellants' Arguments
- The appellants contended that Ex. D.2 in substance recorded a conditional sale; therefore, the mortgagor's right to redeem (as recognised by sec. 60 of the Transfer of Property Act) did not exist before the 1943 Jaipur Act, and the mortgagor's delivery of property effected an absolute transfer under the law then in force.
- They argued the document was compulsorily registrable under Jaipur law; being unregistered, the mortgage was invalid and the mortgagee's possession became adverse from the date of transfer, enabling the mortgagee to become absolute owner after expiry of 12 years. They relied on reported decisions (notably Sheikh Bhukhan Mian v. Radhika Kumari Debi) in support of this position.
- They further argued that the correct remedy should have been a suit for possession rather than a suit for redemption, apparently on the basis that there was no valid mortgage to redeem.
Respondent's (Plaintiff's) Position — As Appears in the Record
- The respondent initiated the suit claiming a mortgage and seeking redemption and possession on payment of the mortgage money.
- At the stage of second appeal the plaintiff's counsel admitted the genuineness of Ex. D.2 (the disputed document), prompting the High Court to remand for reconsideration of that document.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sheikh Bhukhan Mian v. Srimati Radhika Kumari Debi | Held that where mortgage terms cannot be proved because of absence of registration, plaintiff must sue within 12 years; possession of defendant becomes adverse from date of invalid mortgage. | The Court found this reasoning did not adequately consider that adverse possession is measured by the extent of the claimant's asserted right; the Court therefore did not accept Sheikh Bhukhan Mian as definitive against the present respondent's claim. |
| Sontayana Gopala Dasu v. Iapatalupulu Rami | Where a person was in possession as usufructuary mortgagee under a void mortgage for over 12 years, they acquired by prescription only the rights of a mortgagee (i.e., limited rights), not full ownership. | The Court relied on this principle to show that long possession founded on a limited interest produces limited proprietary rights only, undermining the appellants' argument that unregistered mortgage possession produced absolute title after 12 years. |
| Maha Mangal Rai v. Kishun Kandu | Recitals in an unregistered mortgage-deed, though the mortgage was invalid for want of registration, are admissible to explain the nature and character of the mortgagee's rights; continuous possession as usufructuary mortgagee may give rise to a legally operative mortgage redeemable by the plaintiff. | The Court applied this authority to support admission of the unregistered deed's recitals to assess the character of the defendants' possession and to justify a decree requiring redemption rather than dismissal for want of registration. |
| Rurmal v. Surajmal | Adopted the view that an unregistered mortgage's recitals can be used and that continuous possession may give birth to a legally operative mortgage requiring redemption. | The Court observed that the former High Court of Jaipur took this view and treated it as aligned with the present reasoning; the author of this opinion had been party to that decision. |
| Ma Kyi v. Mg. Thon | Deals with relationship between suits for possession and suits for redemption (cited as authority on the similarity/substance between the two). | The Court used this to support the proposition that a suit framed as one for redemption is in substance often a suit for possession with a conditional payment obligation and that technical pleading distinctions should not defeat substantive relief. |
| Maung Daw Na v. Maung Wa Maung | Approved Ma Kyi; supports the view that redemption and possession suits may be substantively equivalent. | Cited to reinforce that a plaint seeking redemption is not defeated because the underlying instrument is said to be invalid — the substantive relief (possession subject to payment) remains available. |
| Halka v. Nannhon | Rejected a technical objection that a plaint framed as one for redemption cannot stand where the mortgage did not exist; emphasised substantive relief for possession on payment. | Applied to indicate that even if the mortgage were invalid, a plaintiff pleading willingness to pay sums due should not be denied possession on that account. |
| Annada Hait v. Khudiram Hait | Held that a suit to redeem a usufructuary mortgage is substantially a suit for possession. | Recalled as authority for treating the present redemption suit as substantively one for possession with a conditional monetary payment. |
| N. Appamma v. S. Chinnaveadu | Approved the Calcutta decision in Annada Hait; supports the characterization of redemption suits as possession suits. | Cited as supporting authority for the Court's approach to the form-versus-substance issue in the pleadings. |
| Baijnath Prasad Singli v. Muneshwarsingh | Held that a plaintiff should not be prevented from obtaining possession subject to redemption simply because the claim is in substance one for redemption or because the mortgage's validity is challenged. | Quoted to buttress the principle that substantive rights to possession subject to payment should not be defeated by technical arguments about the nature of the instrument. |
| Ariff v. Jadunath (Privy Council) | Deprecates applying equitable English doctrines to create without writing interests which statute requires to be created by registered instruments; cautions against enforcing oral contracts to create registrable interests. | The Court distinguished Ariff as relating to an oral lease against the true owner and not applicable to questions of admission of an unregistered deed's recitals to explain the character of possession or to the doctrine of limited proprietary rights by prescription. |
| N. Varada Pillai v. Jeevarathnammal | Permitted admission of an unregistered document to ascertain the character of the possession (as cited by the Court). | The Court invoked this decision to support admission of the unregistered deed in the present case for the limited purpose of explaining the nature of the defendants' possession. |
Court's Reasoning and Analysis
The Court proceeded in the following analytical steps:
- Interpretation of the disputed document (Ex. D.2): The Court translated and closely read the relevant portion of Ex. D.2. The document begins as a mortgage executed by Hardev in favour of Ramhet for Rs. 200 with 12 gah pators mortgaged. It provided that if the money were not paid on the due date, possession would be given on 5 gah pators (after a short period) and possession of all pators in the bakhar after 12 months; interest would accrue after 12 months at the stated monthly rate.
- On that basis the Court rejected the appellants' and the two lower courts' reading of the document as effecting an immediate absolute transfer or an unconditional sale. The Court explained that the clause making interest payable only after 12 months indicated that no interest was payable for the first 12 months and that the subsequent delivery of possession and accrual of interest was intended as security for the later burden of interest. Thus the document "purported to be a simple mortgage at the outset" with stipulations for phased delivery of possession as security — not an absolute transfer extinguishing the right of redemption.
- On the registration point, the Court considered the contention that the unregistered document being invalid meant the mortgage could not be enforced and that the defendant's possession had become adverse from the date of transfer (citing Sheikh Bhukhan Mian). The Court found that approach insufficient because it failed to account for the fundamental principle that the adverseness of possession is limited by the scope of the right asserted by the possessor. In other words, possession obtained under a limited claim (such as usufructuary mortgagee's claim) yields rights only to the extent of that claim.
- The Court relied on authorities (including Sontayana Gopala Dasu and Maha Mangal Rai) to show that where possession stems from a void or unregistered mortgage, long possession may confer only the mortgagee's limited rights by prescription and that recitals in an unregistered mortgage may be admitted to explain the character and extent of such possession. Therefore, absence of registration did not automatically entitle the defendant to be treated as absolute owner or to defeat the plaintiff's right to redemption or to obtain full title by mere lapse of time.
- Regarding form of the suit, the Court reviewed authorities to conclude there is no substantive difference between a suit for possession (with an acknowledgement of sums due to defendant) and a suit for redemption. The Court accepted that a redemption suit is essentially a possession suit with an additional conditional payment requirement; hence technical pleading objections should not deprive a plaintiff of substantive relief.
- The Court distinguished the Privy Council decision in Ariff v. Jadunath as being concerned with an oral lease and not being apposite to the present circumstances where an unregistered document was produced and could be used to characterise the defendant's possession. The Court therefore accepted that the unregistered deed could be admitted in evidence for the limited purpose of ascertaining the character of the defendants' possession.
- On the facts and law thus analysed, the Court concluded that the lower court was right to grant a decree for possession to the respondent on his paying Rs. 400, which the Court characterised as the amount due to the defendants. The Court therefore dismissed the appellants' appeal with costs.
Holding and Implications
Appeal dismissed with costs.
Implications:
- The Court upheld the view that Ex. D.2, properly interpreted, created a mortgage with stipulations for phased delivery of possession as security, and did not amount to an absolute transfer extinguishing the right of redemption.
- The Court ruled that absence of registration of the deed did not automatically bar admission of its recitals for the limited purpose of explaining the nature of the defendant's possession; long possession founded on a limited interest confers limited rights only and does not necessarily result in absolute title under prescription.
- The direct effect for the parties is that the respondent is entitled to a decree for possession upon payment of Rs. 400 (the amount found due). The appeal by the defendants was dismissed and costs were awarded against them.
- The opinion does not purport to establish a novel or broad precedent beyond its application to the deed and facts before the Court; it applies existing principles about interpretation of mortgage instruments, the limited scope of adverse possession where the asserted right is restricted, and the treatment of redemption and possession suits.
Note: This summary is based exclusively on the text of the provided opinion and does not add information not contained therein.
K.L Bapna, J.:— This is a second appeal by the defendants in a suit for redemption.
2. The respondent, Ram Hans, sued the appellants Ram Chandra and Uda in the Court of Civil Judge, Hindaun, on the 28th of July, 1945, on the allegations that a Kham Bakhal containing 13 pators described in the plaint, situated at Hindaun, was mortgaged by Hardev, predecessor-in-title of respondent No. 1, and Patriya, respondent No. 2, with Ramhet as security for a loan of Rs. 200/- on Sawan Badi 14, Smt. 1989 (25th July, 1930), and a certain deed was executed, but it was not registered. The defendants were stated to be the legal representatives of Ramhet, and the plaintiff claimed.
(1) redemption of the said mortgage,
(2) possession of the property on payment of Rs. 200/- to the appellants, and
(3) costs of the suit.
3. The appellants contested the suit, denied the mortgage, and pleaded that the agreement was to hand over pators on nonpayment of loan of Rs. 200/-, and that Hardev delivered the pators to the defendants in pursuance of the contract. It was pleaded further that the loan carried interest at 18% per annum, and certain repairs were also done to the property so that the defendants' debt. now outstanding was Rs. 1476/13/-. The trial court held that it was a case of mortgage by conditional sale, but as the defendants had not taken any proceedings for foreclosure, the plaintiff was entitled to redeem the property, and that repairs had not been proved, but the defendants were entitled to interest at the stipulated rate subject to a maximum of Rs. 400/- according to the rule of damdupat. It accordingly passed a decree for redemption of the property subject to payment of Rs. 600/-, inclusive of the principal and interest on the loan secured by the mortgage.
4. On appeal the learned District Judge held that there was no proof of the mortgage and the document Ex. D. 2, which could make out a case of mortgage was unregistered and had not been admitted by the plaintiff and was, therefore, neither admissible nor could be taken to be a proof of the mortgage. He accordingly accepted the appeal and dismissed the suit.
5. On second appeal, learned counsel for the plaintiff admitted the genuineness of Ex. D. 2, and the High Court of the then Jaipur State remanded the case to the District Judge for a fresh decision of the case after taking into consideration the said document. The learned District Judge by his judgment, dated 31st of May, 1946, held that the decree of redemption had been rightly made by the Munsif, but the amount to be paid could not exceed Rs. 400/-, the Munsif having been held to have misunderstood the rule of damdupat. The defendants have come in appeal.
6. It was argued by learned counsel for the appellants that the two courts had considered the document Ex. 2 as a mortgage by conditional sale, and on that finding the suit should have been dismissed, for the right given to a mortgagor to redeem the property, unless extinguished by the act of the parties or decree of a court, granted by sec. 60 of the Transfer of Property Act did not exist before the enforcement of the Jaipur Transfer of Property Act, 1943, and the mortgagor by delivering the property made an absolute transfer in favour of the mortgagee, which was not invalid by any law in force at the time.
7. The aforesaid argument would make it necessary to consider whether a mortgagor could by the act of creating a mortgage give up his right of redemption on the happening of certain contingencies. It is, however, not necessary to do so, for the finding of the two courts as to the interpretation of the document Ex. 2 has not been correctly made. The relevant portion of the document, when translated into English, is as follows:—
“Mortgage excuted by Hardev in favour of Ramhet in lieu of Rs. 200/- borrowed wherefor 12 gah pators have been written (mortgaged). The agreement to pay money is of Sawan Sudi 14. If money is not paid on due date, possession will be given on 5 gah pators, and possession to be given on all patros in the bakhar after 12 months. If money not paid on the due date, it will carry interest at Rs. 1/8/- per mensem after 12 months. Dated Sawan Budi 14, Smt. 1987”.
8. Learned counsel for the appellants wants to read the document as if it contained a recital of a loan of Rs. 200/- carrying interest at Rs. 1/8/- per cent per mensem, payable in 12 months and in default of payment an agreement to hand over possession of the bakhar and making an absolute transfer in favour of Ramhet. This is also how the two courts seem to have understood the document, but the last condition that interest will accrue after 12 months makes it quite clear that no interest was payable for the amount for the first 12 months, and thereafter not only interest was to become due, but the possession was also to be handed over to the mortgagee obviously as a security for the additional burden of interest. The document purported to be a simple mortgage at the outset with stipulation for delivery of possession of a part of the property mortgaged after 15 days and for further delivery of possession of the entire property after 12 months from which date the loan was to carry interest, and thus the right of redemption could not have been lost by a delivery of possession even according to the terms of the mortgage.
9. Learned counsel next argued that the document creating the mortgage was, under the law in force in Jaipur State, compulsorily registrable, and, in the absence of registration, could not create a mortgage, and the suit for redemption must be dismissed. It was argued that the mortgage being an invalid Page: 192one, the possession of the mortgagee became adverse from the date of the transfer of possession, and the mortgagee became an absolute owner thereof after the expiry of 12 years. Reliance was placed on Sheikh Bhukhan Mian v. Srimati Radhika Kumari Debi(1), wherein Manhar Lall, J. obseived as follows:—
“In the result, the position comes to this that the plaintiff cannot prove the terms of the mortgage under which the defendant, according to the plaintiff, keeps, possession of these lands. The plaintiff, therefore, all the time was entitled to institute a suit for recovery of possession of his lands within 12 years of the date of the invalid mortgage, invalid in the sense that it could not be enforced owing to the absence of registration; the possession of the defendant became adverse to the plaintiff from the very date of the invalid mortgage.”
10. The reasoning adopted in this case does not seem to have taken into account the fundamental principle of adverse possession that the extent of adverseness of possession depends upon the extent of the claim of right under which possession is obtained and kept, and where such a claim is restricted to a limited interest in the property the possession is adverse to that extent alone. In Sontayana Gopala Dasu v. Iapatalupulu Rami (2), a person in possession of a property as usufructuary mortgagee under a void mortgage, for more than 12 years, was held to have acquired by prescription only the rights of a mortgagee. In Maha Mangal Rai v. Kishun Kandu(3), redemption was sought of a mortgage, which had been effected by an unregistered deed required to be registered, and executed 19 years before the institution of the suit. It was held that even though a mortgage not effected by a registered deed as required by sec. 59 of the Transfer of Property Act was invalid, the recitals in the unregistered mortgage-deed were admissible in evidence for the purpose of explaining the nature and character of the mortgagees over the mortgaged property. In that case the mortgage was of an occupancy holding, which was void in law, but it was held that by continuance of the defendants' possession for more than 12 years as usufructurary mortgagees, there came into existence a legally operative mortgage which the plaintiffs had to redeem as a condition precedent to a decree for possession of the holding. This was the view taken by the former High Court of Jaipur in Rurmal v. Surajmal(4), to which I happened to be a party, and in which the case law has been discussed.
11. It was next argued that the suit should have been for possession and not for redemption. Reliance was placed on Ma Kyi v. Mg. Thon(5), which was approved in Maung Daw Na v. Maung Wa Maung(6). There is, however, no difference between a suit for possession containing a prayer for allowing the defendant such sums of money as he may be entitled to under the previous transactions, and a suit for redemption on payment of the mortgage amount. In reality a suit for redemption is nothing more than a suit for possession with the additional prayer for letting the defendant have his money due to him before he can be dispossessed of the property. If the defendant had acquired a mortgagee's rights by prescription, he is entitled to contest a simple suit for possession, and the plaintiff would not be granted a decree for possession unless on condition that he pays to the defendant the money due on the transaction. By alleging in the plaint that the plaintiff was willing to pay the amount which he considers to be due to the defendant, he is only acting as an honest suitor. In Halka v. Nannhon(7), a contention was raised that the plaint was framed as if it were one in a suit for redemption, and inasmuchas the mortgage did not exist, no suit for redemption lay. It was observed that this was too technical an objection, and the substantive relief claimed in the suit was one for possession, and that if the plaintiff was entitled to that relief, even if the mortgage was invalid, there is no reason why he should be denied that relief. The decree granted in this case was for possession on payment of certain amount due to the defendant on the mortgage. In Annada Hait v. Khudiram Hait(8), it was held that a suit to redeem a usufructuary mortgage was substantially a suit for possession. This decision was cited with approval in N. Appamma v. S. Chinnaveadu(9). The Calcutta case was also relied on by Wort J. in Baijnath Prasad Singli v. Muneshwarsingh(10) where the plaintiff instituted a suit for redemption of a certain mortgage. The defence was that the mortgage being for a perid of more than five years was invalid under the Chhota Nagpur Tenancy Act, and there being no valid mortgage, the action for redemption must fail. It was observed:—
“It would be somewhat astounding to me if I had to come to the conclusion that the law of this country is such as to prevent a plaintiff, in the circumstances such as the present, from succeeding where in fact he has claimed possession subject to redemption, merely on the ground that it was in substance an action for redemption.”
12. Learned counsel for the appellants contended that the above cases had been decided prior to the decision of the Privy Council in Ariff v. Jadunath(11), and were no longer good law, for their Lordships of the Privy Council had clearly deprecated the application of the equitable doctrine of English Law relating to the right to sue upon a contract, to which the Transfer of Property Act applied, so as to create without any writing any interest which the statute says can be created by means of a registered instrument. That case is easily distinguishable, for it related to an oral lease sought to be enforced against the true owner. It was also not a case to which the doctrine of acquisition of limited interest by prescription could be applicable. In the present case, the unregistered deed could be admitted in evidence for the purpose of ascertaining the character of the possession of the defendant, as laid down Page: 193by their Lordships of the Privy Council in N. Varada Pillai v. Jeevarathnammal(12). The document in the present case was produced by the defendant himself. The lower Court was, therefore, quite right in granting a decree for possession to the respondent on his paying Rs. 400/-, which was the amount due to the defendant-applicants in this case. The appeal is accordingly dismissed with costs.
13. Learned counsel for the appellants wanted leave to appeal to a Division Bench. It is hereby granted.
Alert