Khemi And Others v. Bhagat Singh And Others S

HEMANT GUPTA, J. (Oral).

The plaintiffs are in second appeal aggrieved against the judgment and decree passed by the Courts below, whereby their suit for declaration that they have become owners of the suit property on account of failure of the defendants i.e, the mortgagors to redeem the usufructuary mortgage within the period of 30 years from the date of mortgage, was dismissed in appeal, inter-alia, on the ground that such suit is hit by resjudicata and barred by limitation from the date of decision of the previous suit.

Learned counsel for the respondents concedes that the finding of resjudicata as recorded by the learned first Appellate Court or the finding that the suit is barred by limitation from the date of judgment in the previous suit, is not maintainable, but it is argued that in case of usufructuary mortgage, there is no period of limitation and thus, the plaintiffs are not entitled to declaration that they have become owners of the suit property by efflux of time.

After hearing learned counsel for the parties, I am of the opinion that the findings recorded by the first Appellate Court in respect of resjudicata and that the suit is barred by limitation from the date of judgment in the previous suit, are not sustainable as conceded by the learned counsel for the respondents. But keeping in view the Full Bench judgment of this Court in Ram Kishan and others v. Sheo Ram and others, 2008(1)

PLR page 1, wherein it has been held that in case of usufructuary mortgage,

there is no period of limitation for redemption of mortgage and the principle

‘once mortgage always a mortgage’ is applicable, the plaintiff-appellants are not entitled to the declaration sought for. It was held by the Full Bench to the following effect:-

“32. The limitation of 30 years under Article 61(a) beings to run “when the right to redeem or the possession accrues” The right to redemption or recover possession accrues to the mortgagor on payment of sum secured in case of usufructuary mortgage, where rents and profits are to be set off against interest on the mortgage debt, on payment or tender to the mortgagee, the mortgage money or balance thereof or deposit in the court. The right to seek foreclosure is co-extensive with the right to seek redemption. Since right to seek redemption accrues only on payment of the mortgage money or the balance thereof after adjustment of rents and profits from the interest thereof, therefore, right of foreclosure will not accrue to the mortgagee till such time the mortgagee remains in possession of the mortgaged security and is appropriating usufruct of the mortgaged land towards the interest on the mortgaged debt. Thus, the period of redemption or possession would not start till such time usufruct of the land and the profits are being adjusted towards interest on the mortgage amount. In view of the said interpretation, the principle that once a mortgage, always a mortgage and, therefore always redeemable would be applicable.

33. The argument that after the expiry of period of limitation to sue for foreclosure, the mortgagees have a right to seek declaration in respect of their title over the suit property is not correct. From the aforesaid discussion, it is apparent that the mortgage cannot be extinguished by any unilateral act of the mortgagee. Since the mortgage cannot be unilaterally terminated, therefore, the declaration claimed is nothing but a suit for foreclosure. It is equally well settled that it is not title of the suit, which determines the nature of the suit. The nature of the suit is required to be determined by reading all the averments in the plaint. Such declaration cannot be claimed by an usufructuary mortgagee. Thus, we prefer to follow the dictum of law laid down by the larger Bench in Seth Ganga Dhar's case (supra) as well as judgments of Hon'ble Supreme Court in Jayasingh Dnyanu Mhoprekar's case (supra), Pomal Kanji Govindji's case (supra), Panchanan Sharma's case (supra) and Harbans's case (supra) in preference to the judgments relied upon by the mortgagees in Prabhakaran's case (supra) and Sampuran Singh's case (supra).

34. Therefore, we answer the questions framed to hold that in case of usufructuary mortgage, where no time limit is fixed to seek redemption, the right to seek redemption would not arise on the date of mortgage but will arise on the date when the mortgagor pays or tenders to the mortgagee or deposits in Court, the mortgage money or the balance thereof. Thus, it is held that once a mortgage always a mortgage and is always redeemable.”

In view of the Full Bench Judgment in Ram Kishan's case (supra), the present appeal is dismissed, though on a different ground than what weight with the learned first Appellate Court.

(HEMANT GUPTA)

JUDGE

05-09-2009 ds