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AMICUS AI
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Judges
  • Abdur Rahim
Acts
  • Article 145 of the Limitation Act of 1871--article 144 of the Limitation Act of 1877
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Cited by
Citation Codes
Equivalent Citations
citation codes
Judges
  • Abdur Rahim
Acts
  • Article 145 of the Limitation Act of 1871--article 144 of the Limitation Act of 1877
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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This appeal was brought by the 12th defendant in a suit seeking a declaration that specific lands (marked Nos. 3 and 4) belonged to the plaintiffs and could not be sold in execution of a decree obtained by the 12th defendant against the 1st defendant in Original Suit No. 232 of 1898. The decree in question arose from a simple mortgage bond executed by the 1st defendant in favour of the 12th defendant in 1890.

At first instance the Munsif found that, as a result of a partition made about 24 years prior to the institution of the suit (and therefore long before the 1890 mortgage), the lands had fallen to the share of two brothers (Chinnathambi and Muthukannu). The District Judge, although his findings on the partition point were regarded as unsatisfactory by the appellate court, dismissed the 12th defendant's appeal against the Munsif's decree in favour of the plaintiffs. The District Judge's decision rested on the conclusion that the plaintiffs and their predecessors-in-title had been in uninterrupted adverse possession since about 1894 (a period exceeding 12 years before the 12th defendant attempted to sell the property in execution of his mortgage decree), thereby extinguishing any rights that the 1st and 13th defendants (the latter having joined in the mortgage) might have had; accordingly, the property could not be sold in execution of the mortgage decree.

Before the appellate court, counsel for the appellant (the 12th defendant) did not dispute the factual finding as to the duration and character of possession, and stated that he accepted the finding to mean that the plaintiffs and their predecessors intended to prescribe for an absolute title rather than a title subject to the mortgage.

Legal Issues Presented

  1. Whether the existence of a prior mortgage (and the mortgagee's right to enforce it) prevents a person in adverse possession for the statutory period (12 years) from acquiring an absolute title that extinguishes the mortgagor's rights and thereby prevents sale in execution of the mortgage decree against the mortgagor.
  2. Whether a mortgagee's remedy to sell the mortgaged property is preserved (not barred by limitation) when the mortgagor has kept the mortgagor's right alive by payment of interest or by acknowledgements, even though a stranger has been in adverse possession for more than 12 years.
  3. Whether a decree for sale obtained by a mortgagee in proceedings to enforce a mortgage can bind third parties who do not derive their title from the mortgagor and who were not parties to the suit, when those third parties claim a statutory title by adverse possession.

Arguments of the Parties

Appellant's Arguments

  • The appellant (12th defendant) accepted the District Judge's factual finding of adverse possession but contended that, as a matter of law, the mortgagee's remedy against the mortgaged property is not lost merely because a stranger has been in adverse possession for 12 years after the mortgage was executed, provided the mortgagee's right to enforce the mortgage against the mortgagor is not barred (for example, by payment of interest or by acknowledgment keeping the right alive).
  • The appellant relied on the decision in Aimadar Mandal v. Makhan Lal Dey (38 C. 1015 : 10 C.W.N. 904), and noted that that decision had been followed in Venkatachela Asari v. Subramania Chetty (8 Ind. Cas. 264 : 1 M.W.N. 633 : 8 M.L.T. 377), to argue that a mortgagee's remedy (especially where kept alive) survives adverse possession by a stranger.
  • In response to questioning, the appellant's counsel indicated he would accept the factual finding as showing an intention to prescribe for an absolute title, but maintained his legal contention that such prescription should not defeat the mortgagee's remedy unless the mortgagee's remedy itself was barred by limitation.

The opinion does not set out a separate, detailed account of the plaintiffs' or respondents' oral arguments before the court beyond the factual position accepted by counsel and the District Judge's findings described above.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Aimadar Mandal v. Makhan Lal Dey (38 C. 1015 : 10 C.W.N. 904) Held (as relied on by appellant) that the mortgagee's remedy survives such that time runs against the mortgagee only in certain circumstances (position relied on to argue mortgagee not deprived of remedy by adverse possession of a stranger). The court rejected this proposition as an accurate statement of the law in the present context and found no authority supportive of the contrary proposition relied upon in that case; the Calcutta decision was distinguished and not followed for the facts of this case.
Venkatachela Asari v. Subramania Chetty (8 Ind. Cas. 264 : 1 M.W.N. 633 : 8 M.L.T. 377) Followed the Calcutta decision (Aimadar Mandal) without further discussion; invoked to support mortgagee's continuing remedy. The court noted this follow followed Aimadar Mandal but treated the earlier reasoning as not applicable to the present facts and did not accept it as controlling.
Heath v. Pugh (6 Q.B.D. 345 : 7 A.C. 235) Establishes that, in certain foreclosure contexts where the mortgagee obtained a decree, time runs from the decree because the decree gives the mortgagee a new right (case involved parties deriving title from mortgagor and was not an adverse possession case). The court distinguished Heath v. Pugh as not involving adverse possession by a stranger and therefore inapplicable to the present situation; the reasoning that time should run only from decree could not be extended to cases where a third party had been in adverse possession.
Prannath Roy Chowdhry v. Rookea Regum (7 M.I.A. 323 at p.355 : 4 W.R. 37) States that a mortgagee entitled to foreclose is not necessarily in a position to make good a title to possession against all occupants; foreclosure is a limit on redemption but does not guarantee success against all possessors. Used to support the proposition that a mortgagee who obtains a decree for sale or foreclosure will not be in a better position than a mortgagee foreclosing; supports court's view that decree cannot bind third-party adverse possessors.
Ammu v. Ramakrishna Sastari / Ammu v. Ramakrishna Sastri (2 M. 226; 7 M.I.A. 323 at p.355 : 4 W.R. 37) Sets out that whether a prescriptive title acquired by adverse possession is subject to a mortgage depends on the possessor's intention — whether the possessor intended to acquire an absolute title or only a title subject to the mortgage; also held in one context that a claim against a defendant in possession who did not claim under the mortgagee was barred under Article 145. The court relied on these authorities to show that where a possessor ousts a mortgagor or otherwise acquires possession adverse to the mortgagor, the possession may be adverse to both mortgagor and mortgagee, and limitation may bar the mortgagee's claim.
Ram Coomar Sein v. Prosunno Coomar Sein (1864 W.R. 375) Held that where the mortgagor is dispossessed and another obtains possession, the possession of the new holder becomes adverse to both mortgagor and mortgagee; the mortgagee's cause of action against the new holder arises from the date the new holder obtained adverse possession. The court cited this case to support the proposition that a mortgagee must vindicate rights within the statutory period against a third party who is in adverse possession and that the mortgagee's right to sell cannot bind such a third party if limitation has run.
Sheoumber Sahoo v. Bhadaneedeen Kulwar (2 N.W.P.H.C.R. 223) Held that a mortgagee is bound to come within 12 years to vindicate title to the land against a third party in adverse possession who does not claim under the mortgagor. Relied upon to reinforce that the mortgagee is not without remedy against a trespasser, but that limitation will bar the mortgagee's remedy against a third-party adverse possessor who is outside the statutory period.
Karan Singh v. Bakar Alikhan (5 A. 1 : 9 I.A. 99) Privy Council treated the suit by mortgage bond holders to recover sums and enforce payment by sale as one for possession or interest in immovable property and held the claim to sell would have been barred under Article 145 if a defendant had been in adverse possession for more than 12 years before the suit. The court regarded this decision as substantially on all fours with the present facts and treated it as decisive support for holding that the mortgagee's claim to sell is barred where a third-party adverse possessor has been in peaceable possession for the statutory period.

Court's Reasoning and Analysis

The court proceeded by carefully examining the legal effect of adverse possession on the rights of both mortgagor and mortgagee, and by distinguishing authorities relied upon by the appellant.

  1. Fact and preliminary concession: The appellant accepted the District Judge's factual finding that the plaintiffs and their predecessors had been in adverse possession since about 1894 for more than 12 years before the mortgagee's attempt to sell. The appellant also accepted that this possession was intended to prescribe for an absolute title.
  2. Appellant's legal contention: The appellant argued that even if the mortgagor's rights were extinguished by adverse possession, the mortgagee's remedy against the mortgaged property would not be lost as long as the mortgagee's right to enforce the mortgage against the mortgagor was not barred (for example, when kept alive by payment of interest or acknowledgement).
  3. Examination of precedent: The court analyzed the authorities invoked by the appellant (notably the Calcutta decision reported as Aimadar Mandal) and the supporting decision following it, and found them inapplicable to the present circumstances. In particular the court distinguished Heath v. Pugh, which was relied upon to support the Calcutta proposition, on the ground that Heath v. Pugh involved a foreclosure context and parties who derived title from the mortgagor (and thus was not a case of adverse possession by a stranger).
  4. Central legal principle: The court emphasised the orthodox proposition that a person in adverse possession for the statutory period acquires a title which extinguishes the rights of the original owner. Because a mortgage is merely a security for a debt and the equity of redemption remains an interest associated with the mortgagor, the court found it difficult to accept that the mere existence of a mortgage can prevent a person who has been in adverse possession for 12 years from acquiring ownership.
  5. Third-party limitation point: The court explained that a mortgage decree (for sale) cannot bind persons who do not derive their title from the mortgagor and who were not parties to the mortgage suit, when those persons claim a statutory title adversely to the mortgagor. In some circumstances the prescriptive title may be subject to the mortgage, but that is a function of whether the possessor intended to acquire only a title subject to the mortgage or an absolute title.
  6. Reliance on supporting authorities: The court cited a line of authorities (Ammu v. Ramakrishna Sastari / Sastri; Ram Coomar Sein; Sheoumber Sahoo) which support the view that where a stranger ousts the mortgagor or otherwise acquires adverse possession, the possession is adverse to both mortgagor and mortgagee and the mortgagee must vindicate rights within the statutory period or be barred. The Privy Council decision in Karan Singh v. Bakar Alikhan was regarded as substantially on all fours with the facts and as directly supporting the conclusion.
  7. Policy and consequence: The court noted a policy consideration that if the appellant's argument were accepted, persons in peaceable and unchanged possession asserting their own rights would not have security in their title even where the mortgagor had kept the mortgage alive by paying interest or acknowledging the debt. The court considered this an undesirable result.
  8. Conclusion of analysis: Having weighed the authorities and the legal principles, the court found the appellant's contention unsustainable and held that the plaintiffs' adverse possession (for more than the statutory period) barred the mortgagee's claim to sell the property in execution of the decree.

Holding and Implications

Holding: The appeal is dismissed. The court concluded that the mortgagee's claim to sell the lands in execution of the mortgage decree was barred by the plaintiffs' adverse possession of the property for more than the statutory period; accordingly, the property could not be sold in execution of the mortgage decree. The court ordered dismissal of the appeal with costs. (Ayling, J. concurred: "I agree.")

Implications:

  • Direct effect on the parties: The decision upholds the District Judge's conclusion that the plaintiffs (and their predecessors-in-title) having been in adverse possession for the statutory period acquired title that prevented the 12th defendant (mortgagee) from selling the lands in execution of his mortgage decree. The 12th defendant's appeal was therefore dismissed with costs.
  • Legal consequence addressed: The court held that where a third party has been in adverse possession of mortgaged land for more than the statutory period, the mortgagee's remedy to sell that land will be barred as against that third party (who does not derive title from the mortgagor), and a mortgage decree cannot bind such a third party who was not a party to the mortgage suit.
  • Broader implications / precedent-setting: The opinion rests on existing authorities (including a Privy Council decision) and policy considerations protecting peaceable possessors; the court treated earlier contrary authority as inapplicable rather than establishing a rule to be followed in the present factual context. The opinion primarily applies established limitation and adverse-possession principles to the facts at hand rather than announcing a novel legal doctrine beyond those principles.

This summary is confined to and derived solely from the contents of the provided opinion.

Show full summary ...

    Ramasawmi Chetti v. Ponna Padayachi And Ors.

    1. This appeal is by the 12th defendant in a suit, the object of which was to have it declared that certain lands (marked Nos. 3 and 4 on the plan) belong to the plaintiffs and were not liable to be sold in execution of a decree obtained by the 12th defendant against the 1st defendant in Original Suit No. 232 of 1898 on a simple mortgage bond executed by the latter in favour of the former in 1890. The Munsif found, on the question of the plaintiff's title, that the lands, which were originally the joint property of the 1st and 8th defendants and their two brothers, Chinnathambi and Muthukannu, fell to the share of the two latter at a partition effected between them about 24 years before the institution of the suit and long prior to the mortgage by the 1st defendant to the 12th defendant. The District Judge's finding on this point, such as it is, cannot be said to be satisfactory, but he has dismissed the appeal preferred by the 12th defendant against the decree of the Munsif, which was in favour of the plaintiffs, holding, in effect, that the 1st and 13th defendants (the 13th defendant had also joined in the execution of the mortgage) not having been in possession of the land as the evidence showed since 1894 for a period of more than 12 years before the attempt of the 12th defendant to bring the property to sale in execution of his mortgage decree and the plaintiffs' predecessors-in-title and the plaintiffs having been all this time in adverse possession of the property, the rights of the 1st defendant and 13th defendant in the property, if they had any, became extinguished, and the property could not, therefore, be sold in execution of the mortgage decree obtained against them by the 12th defendant. If this view of the learned Judge be correct, there would be no necessity to remit the case to him for a proper determination of the question relating to partition. Mr. T. Rangachariar, who appeared before us for the appellant (12th defendant), has not disputed the finding of the District Judge as to the duration and character of possession of the plaintiffs and their predecessors-in-title; and, in answer to a question which I put to him in the course of the argument, Mr. Rangachariar stated that he would accept the finding on the point to mean that the plaintiffs' predecessors-in-title and the plaintiffs intended to prescribe for an absolute title and not merely for a title subject to the rights of the 12th defendant as mortgagee. His contention is that, though the rights of the mortgagor in the mortgaged, property may be extinguished by adverse possession by a person for 12 years after the execution of the mortgage, yet, in no case, would the mortgagee's remedy against the mortgaged property be lost, if his right to enforce the mortgage against the mortgagor is not barred, for instance, when it has been kept alive by payment of interest or acknowledgment. He relies for authority on Aimadar Mandal v. Makhan Lal Dey 38 C. 1015 : 10 C.W.N.904, which has been followed by Munro and Krishnaswami Iyer, JJ., in Venkatachela Asari v. Subramania Chetty 8 Ind. Cas. 264 : 1 M.W.N. 633 : 8 M.L.T. 377 without, as far as it appears, any further discussion of the question; and, if these decisions are right, Mr. Rangachariar's contention must prevail. I am, however, unable to take the view of the law expressed in those cases. Maclean, C.J., who delivered the judgment of the Court in the Calcutta case, thinks that the proposition which he lays down namely, that it is only when a mortgagee buys the mortgaged property on its being sold under the decree that time begins to run against him--because, prior to that, he had no title to the property and the decree and sale gave him a new right, is supported by Heath v. Pugh 6 Q.B.D. 345 : 7 A.C. 235. But, with all respect to the learned Judge, I do not find anything in that case, either in the judgment of the Court of Appeal delivered by Lord Selborne, L.C., or in the judgment delivered in the House of Lords, from which such a proposition can be deduced as being applicable to a case in which the person sought to be ejected does, not hold the property under a title derived from the mortgagor. Heath v. Pugh 6 Q.B.D. 345 : 7 A.C. 235 was not a case of adverse possession at all; there the mortgagee, who had the legal estate in the mortgaged property vested in him, brought a suit for foreclosure impleading in that suit the defendant who had purchased the equity of redemption from the mortgagors (who held the property in trust), or from one of them, subsequent to the mortgage and obtained a decree within the time allowed by the statute but when he instituted a suit to recover possession, 12 years had elapsed from the date of the mortgage and he was met by the plea that the suit was barred under 3 and 4 William IV Cap. 27. The Court of Appeal held that the decree for foreclosure gave the mortgagee a new right against the defendant, who, it is to be observed, was a party to the suit for foreclosure and that time would count only from the date of the decree. The defendant in that case derived his title from the mortgagor who was in possession and not by adverse possession and the decision preceded on the reasoning that until foreclosure the mortgage was merely a security for the debt, that although the legal estate had been conveyed to the mortgagee (which, it may be: noted, is not the case here), the interest in the land itself remained in the mortgagor, the equity of redemption being an estate in the land, that the order of foreclosure vested the ownership for the first time in the mortgagee as if by a new purchase and that, though the mortgagee might have claimed possession by virtue of the legal estate conveyed to him under the mortgage, yet 'there can be no two things more distinct or opposite than possession as mortgagee and possession as owner of the estate'. The entire argument treats the position of the defendant as in no way distinct from that of the mortgagor and it could not be contended in that case that it would be otherwise. In Prannath Roy Chowdhry v. Rookea Regum 7 M.I.A. 323 at p. 355 : 4 W.R. 37, it is laid down: Where a mortgage is subject by law to be foreclosed the title to foreclose, is in the nature of a limit to the title to redeem. It by no means follows, as a consequence, that the mortgagee-foreclosing will be able in a suit for possession to make good against all occupants a title to possession". It is clear that a mortgagee who has obtained a decree for sale will not be in a better position than a mortgagee foreclosing.

    2. Now, if we were to apply the arguments of Lord Selborne in Heath v. Pugh 6 Q.B.D. 345 : 7 A.C. 235 to a case like this and the one reported Aimadar Mandal v. Makhan Lal Dey 38 C. 1015 : 10 C.W.N.904 it seems to me that the conclusion in a case where the mortgaged property has been in peaceable possession of a stranger for more than the statutory period must be the opposite of that reached in Heath v. Pugh 6 Q.B.D. 345 : 7 A.C. 235. Aperson, who is in adverse possession of land for 12 years, acquires a title to the land, the rights of the owner of the land being extinguished, and, since a mortgage is merely a security for the debt and the interest in the land remained in the mortgagor, it is difficult to see how the existence of the mortgage at the time adverse possession commenced can prevent the person in such possession acquiring the ownership of the land. It is conceded that the interest of the mortgagor in the land would be extinguished but it is contended that the title by prescription must be subject to the liability of the land being sold for payment of the anterior mortgage debt. The mortgagee's right is to sell the interest of the mortgagor in the land and the mortgage decree, under which the land is attempted to be sold, cannot bind persons who do not derive their title from the mortgagor, and were not parties to the suit in which the mortgage decree was passed but claim a statutory title adversely to the mortgagor. There may be cases in which a person, claiming to have acquired a title by prescription, would acquire it, subject to the existing mortgage but that would depend upon whether the person in possession intended to acquire an absolute title or only a title subject to the rights of the mortgagee. This is laid down in clear language by Turner, C.J., and Muthusami Iyer, J., in Ammu v. Ramakrishna Sastari 2 M. 226 where they observe at page 229:

    3. But there are other cases in which the rights and interests of the mortgagor and: mortgagee are equally invaded, e.g., when under a sale for arrears of Revenue, a purchaser acquires possession and thenceforward, holds adversely both to the mortgagor-and mortgagee or when the mortgagor has remained in possession and a stranger ousts him from the lands". The latter portion of the passage applies to the present case. In the case of Ammu v. Ramakrishna Sastri 7 M.I.A. 323 at p. 355 : 4 W.R. 37 the suit was brought for redemption and it was held that the claim against the defendant who was in possession but did not claim tinder the mortgagee was barred under Article 145 and Article 148 had no application to the case. The decision reported in Ram Coomar Sein v. Prosunno Coomar Sein (1864) W.R. 375 went even further, so far as the position of a person who has dispossessed the mortgagor is concerned. There it was held, relying on Prannath Roy Chowdhry v. Rooked Begum 7 M.I.A. 323 at p. 355 : 4 W.R. 37 that, though there may be cases in which the possession of a person who does not derive his title from the mortgagor may be adverse to the mortgagor but still not adverse to the mortgagee, yet where the mortgagor is dispossessed, and his title disputed and another person obtains possession of the estate, the possession of the new holder becomes adverse to both the mortgagor and the mortgagee, and the mortgagee's cause of action arises against the new holder on the date on which the latter obtained such adverse possession of the mortgaged estate. To the same effect was the law laid down in Sheoumber Sahoo v. Bhadaneedeen Kulwar 2 N.W.P.H.C.R. 223 namely, that a mortgagee is bound to come in within 12 years to vindicate his title to the land against a third party in adverse possession who does not claim under the mortgagor. Here I would observe that these two cases make it clear that the mortgagee is not without remedy against a trespasser taking possession of the mortgaged land, although it may be that he is not entitled to possession under his mortgage, and I myself do not see any valid reason why the mortgagee should not be able under such circumstances to protect his interests by proper proceedings. On the other hand, no authority has been cited to us in support of the proposition to the contrary on which is based one of the grounds for the decision in Aimadar Mandal v. Makhan Lal Dey 38 C. 1015 : 10 C.W.N.904.

    4. I am further of opinion although the learned Judges who decided the Calcutta case thought otherwise, that the point is really covered by what is laid down by the Privy Council in Karan Singh v. Bakar Alikhan 5 A. 1 : 9 I.A. 99. The facts of the Privy Council case are substantially the same so far as they affect the question now raised, as those of the present case. There the suit was instituted by the holders of certain mortgage bonds to recover the sum due and the plaintiff further claimed to enforce payment of the sum due under the bonds by sale of the mortgaged property. Their Lordships were of opinion that the claim to sell the property would have been barred under Article 145 of the Limitation Act of 1871--article 144 of the Limitation Act of 1877 by which the case is governed is to the same effect--if it were proved that the defendant who set up a title distinct from that of the mortgagors had been in adverse possession for more than 12 years before the institution of the suit. Their Lordships treated the suit as one for possession of immovable property or an interest in immovable property. I may also observe that, if the argument of appellant were to prevail, the result would be that when a property is under mortgage and the mortgagor or his successor-in-interest goes on paying interest on the debt or otherwise acknowledges his liability, parsons in peaceable and unchanged possession and enjoyment of such property in assertion of their own rights, whatever the length of the time during which their possession and enjoyment might have lasted, would not be secured in their title. I am of opinion that the weight of authority as well as reason is against the contention of the appellant and the appeal must be dismissed with costs.

    Ayling, J.

    5. I agree.

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    Ramasawmi Chetti v. Ponna Padayachi And Ors.
    (Nov 22, 1910)